Gold’s 11% Correction Sparks “Rotation to Bitcoin” Narrative But Data Tells a Different Story

After a historic rally that drove gold above $4,300 per ounce, the precious metal has now entered its first major correction in over two years, breaking a 750-day streak without a drawdown greater than 10%. The drop, now at 11%, has reignited debate across financial circles about whether capital is rotating out of gold and into Bitcoin.

Analysis of Gold and Bitcoin Correlation

Analyst Darkfost challenged the viral narrative with a custom-built correlation model comparing gold and Bitcoin over time using their respective 180-day moving averages. The chart generates two key signals:

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  A positive signal when Bitcoin trades above its 180-day MA while gold falls below its own.
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  A negative signal when both assets trade below their 180-day MAs.

According to Darkfost, the data paints a far more nuanced picture. While the “gold-to-Bitcoin rotation” thesis has appeared at certain points, such as in 2012, late 2016, and 2020, it fails to hold consistently across market cycles. In contrast, periods like 2014–2015, late 2018, and 2022 showed no such structural relationship.

Independent Performance of Gold and Bitcoin

The findings suggest that gold and Bitcoin may diverge in shorter timeframes but remain largely independent macro hedges driven by separate investor bases. While speculative capital might shift between the two during volatility spikes, Darkfost argues that the notion of large-scale portfolio rotation from gold into Bitcoin remains unsubstantiated.

Ultimately, the analysis underscores a broader trend: Bitcoin’s strength need not depend on gold’s weakness. As traditional and digital assets evolve in parallel, the correlation between the two appears to be cyclical, not causal, a reminder that narratives often outpace data in today’s fast-moving markets.