Bitcoin's Extended Bear Market Against Gold: Historical Patterns Suggest Weakness May Persist

Bitcoin is experiencing a pronounced bear market against gold, with recent market movements challenging the “digital gold” narrative that has long captured investor imagination. As of late January 2026, the relationship between these two assets has shifted dramatically, signaling potential headwinds for cryptocurrencies in the coming months.

Technical Breakdown: BTC to Gold Ratio Signals Prolonged Decline

The technical picture reveals a stark deterioration in Bitcoin’s competitive positioning. The BTC to gold ratio currently stands at 18.46, significantly below its 200-week moving average of 21.90—representing a 17% gap from the long-term trend. This breakdown commenced in November 2025, marking the beginning of what could be an extended period of underperformance.

From its December 2024 peak near 40.9, Bitcoin has surrendered approximately 55% of its value relative to gold. Meanwhile, Bitcoin currently trades around $88.25K, down 12.95% year-to-date, while gold continues its bullish trajectory, reaching fresh record highs near $4,900 per ounce and posting roughly 12% gains for the year. This divergence reflects a fundamental shift in investor preferences toward traditional safe-haven assets over cryptocurrencies.

Historical Bear Market Cycles: Comparing 2018, 2022, and Current Drawdowns

Past bear markets provide sobering context for the current environment. During the 2022 bear market, the BTC to gold ratio plummeted more than 30% below its 200-week moving average and remained depressed for over a year. The 2017-2018 cycle witnessed an even more severe 84% decline in Bitcoin’s value against gold, with 2022 registering a 77% drawdown.

The current 55% decline, while significant, remains less severe than these historical precedents. If patterns repeat, the bear market could persist well below the 200-week moving average until late 2026, suggesting investors face an extended period of relative weakness in Bitcoin versus traditional assets.

Longer-Term Performance: Gold Outpacing Bitcoin

Examining broader time horizons reinforces this shift. Over the past five years, gold has delivered approximately 160% returns, slightly outpacing Bitcoin’s 150% gain. On one-year and five-year views alike, the precious metal has provided superior returns, undermining Bitcoin’s appeal as an alternative store of value during this cycle.

Market Implications and the Rate Cut Connection

External factors compound Bitcoin’s challenges. Rising oil prices—with WTI and Brent crude surging 12% this month—threaten to accelerate inflation, potentially delaying the Federal Reserve’s interest rate reduction timeline. Bitcoin bulls have been banking on imminent rate cuts to lift markets, making inflationary pressures particularly problematic for crypto sentiment.

The bear market environment thus reflects a convergence of factors: technical weakness relative to gold, historical precedent suggesting prolonged underperformance, and macroeconomic headwinds limiting near-term catalysts for recovery. Whether Bitcoin can reverse this bear market trend depends on whether macroeconomic conditions shift and whether traditional investors regain confidence in digital assets versus established safe havens like gold.