Gold Hits Record Highs, Bitcoin Stagnates: Why Experts Warn Against Reallocation

Gold Reaches New Highs

The performance gap between Bitcoin and gold continues to widen: While the gold price marks new all-time highs at $4,490 and sets its sights on the $4,500 mark ^[1][2], Bitcoin stagnates at $87,800 with a meager gain of just 1.5 percent since the beginning of the year ^[2].

"Gold has reached new all-time highs, while BTC has stubbornly remained in a range heading into Christmas week," summarized trading platform QCP Capital on the current market situation ^[1]. Silver also recorded new highs ^[1].

Bitcoin Struggles with Technical Resistance

After rejection at $90,000 the previous day, momentum for Bitcoin appears weak ^[1]. "BTC continues to be rejected by its 4-hour 200-MA/EMA trend," analyzed trader Daan Crypto Trades ^[1]. The analyst was referring to the 200-period cloud of simple and exponential moving averages on the four-hour chart.

Crypto analyst Ted Pillows confirmed the difficult technical situation: "Every move toward $90,000 encounters strong selling pressure. Until Bitcoin reclaims this zone, the sideways movement will continue" ^[1]. Pillows also pointed out that a whale investor had opened short positions on Bitcoin, Ether, and Solana worth nearly $250 million ^[1].

QCP Capital also attributed the subdued development to seasonal factors: "Liquidity is declining significantly as traders close their positions ahead of the holidays" ^[1].

Expert Warns Against Reallocation to Gold

Despite the current underperformance, analyst Matthew Kratter, who has been sharing Bitcoin content on his YouTube channel for years, warns against hasty portfolio decisions ^[2]. His central thesis: the fundamental properties favor Bitcoin in the long term.

"Gold reserves have increased annually by 1 to 2 percent for decades, if not centuries. That may not seem like much, but it inevitably leads to gold reserves doubling every 47 years," argued Kratter ^[2].

Bitcoin, on the other hand, is absolutely scarce and permanently limited to 21 million coins, of which 19.96 million are already in circulation ^[2]. Based on this characteristic, as well as better transferability, verifiability, and divisibility, digital gold is superior to its physical predecessor ^[2].

Kratter also referred to historical risks with gold: In the 16th century, massive gold inflows from America triggered a wave of inflation in Europe and consequently contributed to the decline of the Spanish and Portuguese empires ^[2].

Bullish Signals in the Medium Term

Despite the current weakness, some analysts identified positive technical signals. A bullish divergence formed on the three-day chart: Bitcoin's Relative Strength Index (RSI) formed higher lows while the price made lower lows ^[1].

"Pretty sure the bottom is in - and BTC will push back into six-figure territory soon enough," commented trader Jelle ^[1]. Pillows noted that the two previous three-day bullish divergences had led to a bottom formation in BTC/USD ^[1].

The daily BTC/XAU chart also showed a bullish divergence at important support ^[1].