Swissblock: Widening Gold-Bitcoin price gap is a bullish signal

The growing divergence between gold, which is setting new price highs, and Bitcoin, which is trading sideways, could signal an impending explosive rally for the cryptocurrency, according to an analysis by data firm Swissblock. The firm explained that the gap between the two assets has historically been a meaningful leading indicator. A bullish divergence occurs when gold rises while Bitcoin stagnates, a pattern often followed by a sharp BTC surge. Conversely, a bearish divergence, which can signal a sharp drop or the end of a cycle, happens when Bitcoin continues to rally as gold begins to decline. Swissblock noted that the current market is exhibiting a bullish divergence. However, the firm cautioned that if gold undergoes a strong correction and Bitcoin's rally concludes, the pattern could flip to a bearish divergence, signaling the end of the cycle. This dynamic was also observed during the 2020-2021 bull market, Swissblock added.