TL;DR
- The Bitcoin/Gold ratio fell below its Power Law curve and the 200-2W EMA in 2026, breaking historical cycle-bottom levels.
- BTC reached its most undervalued stage while gold surpassed $5,000 per ounce.
- Gold yield projections and U.S. macro policies could influence the index.
The Bitcoin/Gold ratio (BTC/XAU) showed unusual behavior in 2026 by breaking levels that historically indicated BTC cycle lows in dollar terms. This week, BTC dropped below its long-term trend curve, known as the Power Law, for the first time in history, marking its most extreme undervaluation stage.
The Power Law is used as a reference to identify potential overvaluations and undervaluations of Bitcoin relative to its historical trajectory. In January, BTC/XAU reached its lowest level while gold prices exceeded $5,000 per ounce. The ratio’s decline coincided with yen interventions and fears of a partial U.S. government shutdown.
BTC/XAU is now below the 200-2W EMA, a level that previously aligned with past BTC/USD cycle lows. This breakdown follows a history of recovery, such as in 2022 when BTC/XAU temporarily fell below the EMA and then reclaimed it as support. In 2026, the ratio has already dropped below that line, suggesting historical lows may not automatically hold.
Bitcoin Could Fall Below $50,000
BTC’s peak price reached $126,200 in October 2025. Some analyses indicate it could drop below $50,000 in the coming months, following the four-year cycle theory.
Gold’s performance also affects the BTC/XAU relationship. Bank of America projects gold could exceed $6,000 by year-end. Citi warns the rally could stall or reverse if U.S. real yields rise, the dollar stabilizes, and risk appetite returns. A gold pullback could relieve pressure on BTC/XAU and restore the potential for Bitcoin to reach above $140,000, according to estimates from Standard Chartered and other institutions.
BTC/XAU continues a downward trend in 2026 against gold appreciation. The ratio has broken historical low patterns, opening a period in which the Bitcoin-to-gold relationship does not reflect previous cycle levels
