The Battle for Monetary Supremacy: Why Gold Is Winning While Bitcoin Struggles

A profound shift is occurring in global financial markets, and most investors aren’t paying close enough attention. For decades, the world operated under a specific monetary structure where economic growth, debt expansion, and money creation moved in lockstep. Capital flowed predominantly through the U.S. dollar and into financial assets like stocks, which is precisely why equities outperformed nearly every other investment class for generations. Bitcoin was born into this expansionary environment of endless money printing, and many believed it would become the digital equivalent of gold, a neutral, finite asset outside any government’s control.

But something unexpected is happening. Gold is breaking out to new highs. Central banks are accumulating physical gold at the fastest pace in decades. Meanwhile, Bitcoin has actually lost value relative to gold. If we’re truly entering a new multipolar world order, if confidence in U.S. Treasuries and the dollar is genuinely eroding, why is the ancient monetary metal leading while the asset that was supposed to represent the future is getting left behind?

Understanding the Two Forces at Play

To make sense of what’s happening to gold and Bitcoin, it helps to think through two distinct forces, what we might call the macro force and the technical force. Think of it like physics, where general relativity explains the movement of large objects like planets and galaxies over long timeframes, while quantum mechanics explains the chaotic, seemingly random movements of tiny particles in the short term.

The macro force represents the big-picture fundamentals: monetary policy, sovereign debt levels, geopolitical realignments, and the structural changes that economists like Ray Dalio discuss when analyzing long-term economic cycles. The technical force, on the other hand, represents the price action, moving averages, support levels, and market ratios that technical analysts study to understand shorter-term movements.

Gold can be explained primarily through the macro lens. Government debt relative to GDP now stands higher than almost any point in U.S. history outside of World War II. Global sovereign debt has exploded faster than economic growth itself. Central banks worldwide have been buying physical gold at unprecedented rates, with gold now comprising a larger share of official reserves than it has in years. Nuclear-armed nations are choosing gold over other reserve assets like U.S. Treasuries. There’s genuine structural gravity pulling capital toward this neutral hard asset that exists outside any single government or currency system. Based on these macro fundamentals, gold should be strong, and it is.

Bitcoin, according to the same macro logic, should also be strengthening. But it isn’t. This is where the technical force becomes more useful for understanding Bitcoin’s current position.

The Capital Rotation Evidence

One particularly revealing analytical framework comes from Northstar Charts, which measures something called Capital Rotation Evidence (CRE). This concept tracks when money systematically moves from one asset class into another based on comparing economic metrics against the price of gold.

When you examine the current CRE chart for gold, virtually every major financial metric is in a bear market relative to gold. The S&P 500 versus gold? Gold is winning. The NASDAQ versus gold? Gold is winning. The dollar, M2 money supply, consumer price index, Russell 2000, Wilshire 5000; Across the board, gold is appreciating faster than these indices. Any single metric moving into the red against gold wouldn’t mean much. But when all of these coincide simultaneously, it suggests we’re likely in the middle of a major capital rotation event!

History provides instructive precedents. During the early 1930s, when the stock market collapsed and the dollar became unstable, the U.S. went through a gold revaluation following FDR’s confiscation policies. Gold repriced higher and outperformed virtually everything for five to seven years. The stock market didn’t recover to its 1929 all-time high until 1954. That’s a capital rotation event.

It happened again in the 1970s, the most famous example. During that decade of high inflation, the stock market remained essentially flat in real terms (adjusted for inflation), while gold surged over 2,000 percent from 1971 to 1980. Gold dominated for approximately nine years. That was a capital rotation event.

It occurred once more starting in 2002 following the dot-com bust. Gold climbed from the mid-$200s in 2001 to over $1,900 by 2011, more than a decade of outperformance. Commodities entered what became known as a super cycle. That was a capital rotation event.

These rotations typically last between five and ten years. During these periods, stock markets can either collapse or move sideways in real terms, while hard assets deliver the genuine returns. What makes the current moment significant is that just about every major financial metric is declining relative to gold simultaneously, suggesting a potentially major change in investor confidence. When investors prefer neutrality over productive financial assets like stocks, it usually means the system is absorbing stress elsewhere, through debt accumulation, inflation, currency debasement, or geopolitical fragmentation.

Bitcoin’s Technical Picture: The Pattern Repeats

If the macro force suggests Bitcoin should be rising alongside gold, why isn’t it? The technical patterns provide insight.

Historically, Bitcoin has reached its peak sometime in the fourth quarter of the year following each halving event, which occurs every four years. The 2013 cycle peaked in November. The 2017 cycle peaked in December. The 2021 cycle peaked in November. This Q4 timing has been remarkably consistent, and these peaks have historically coincided with U.S. midterm election cycles, marking the beginning of bear markets.

The cyclical pattern appears almost algorithmic. In the last two complete cycles, Bitcoin took roughly 1,150 to 1,160 days to move from major cycle lows to the next high. From the 2015 low to the 2017 high: approximately 1,150 days. From the 2018 low to the 2021 high: approximately 1,160 days. On the downside, bear markets have historically lasted about one year. From the 2017 high to the 2018 low: exactly 364 days. From the 2021 high to the 2022 low: about 371 days. Bitcoin has tended to spend roughly three years ascending and one year descending.

Technical analysts focus on two key indicators: the 50-week moving average and the 200-week moving average, which represent rolling average prices over those respective timeframes. Historically, Bitcoin remains in a bull market when price holds above the 50-week moving average. Once it closes below that level for several consecutive weeks, it marks the end of the bull market and the beginning of the bear market.

For the current cycle, Bitcoin peaked around $126,000. The critical support level was the 50-week moving average, sitting at approximately $102,000 to $103,000. Once Bitcoin dropped below that level and stayed there for several weeks, the bear market technically began. What happens next, according to historical patterns, is what technical analyst Benjamin Cowan calls “a date with destiny”, Bitcoin inevitably moves toward the 200-week moving average, which represents roughly four years of price history and has consistently served as Bitcoin’s long-term baseline.

Historically, once Bitcoin loses the 50-week moving average, price compresses toward the 200-week moving average. For the current cycle, that would mean approximately $58,000, though it could potentially reach the $40,000s or even high $30,000s depending on how events unfold. If we apply the historical pattern of roughly one year from peak to bottom, that would place the bottom around October 2025, though it could occur as early as May.

Looking at historical drawdowns provides another perspective. Each cycle, Bitcoin’s peak-to-trough decline has been progressively smaller. If this cycle follows the pattern with a decline approximately 7 percent less severe than the previous cycle, that would suggest a 70 percent drop from the all-time high of $126,000, placing the bottom around $37,800, which aligns remarkably well with the 200-week moving average projection.

The Financialization Factor

One critical difference between today’s Bitcoin and previous cycles is the degree of financialization. Bitcoin in 2025 is vastly more securitized than it was in 2015 or 2018. It now exists inside ETFs, serves as collateral for loans, operates within complex derivatives markets, supports products built on top of those ETFs, backs corporate borrowing, and finances mining operations. This means Bitcoin doesn’t necessarily trade purely on scarcity anymore. Price discovery increasingly happens through these paper products, which means short-term price can be suppressed despite strong long-term fundamentals.

Gold experienced similar dynamics after ETFs were introduced in 2004, enabling paper gold trading that initially suppressed prices. However, in the long term, price suppression through derivatives can only last so long before the underlying asset breaks out. For gold, the macro drivers, geopolitical uncertainty, central bank accumulation, technical breakouts, have aligned to potentially signal gold’s turn to dominate markets. The same will likely happen to Bitcoin eventually, but the timeline remains uncertain.

Investment Strategy in Uncertain Times

The natural question becomes: if gold is breaking out and Bitcoin is likely headed lower during a potential capital rotation, why not simply sell everything and buy gold? It’s a fair question, but there’s an important distinction between recognizing a rotation is probably occurring and trying to time it perfectly.

Capital rotations don’t move in straight lines. Even during the 1970s and early 2000s, there were violent counter-rallies, false breakdowns, and massive whipsaws. If Bitcoin remains in its long-term adoption phase, with ETFs expanding, sovereign interest growing, and bank custody increasing, selling everything into technical weakness could prove to be the same mistake investors made in previous cycles.

The better question isn’t “should I sell everything?” but rather “how do I position my portfolio to survive regardless of outcome?” A diversified approach makes sense: maintaining Bitcoin exposure while acknowledging gold’s structural strength, holding dividend-paying stocks that could perform well in sideways markets, keeping some cash available for opportunistic deployment, and dollar-cost averaging into assets that appear undervalued while reinvesting dividends.

The Bigger Picture

The global monetary system that dominated for decades, where debt expansion drove GDP growth, and most capital flowed through the dollar into U.S. financial assets, is reaching a breaking point. Debt hasn’t just grown; it has exploded and now outpaces the economies meant to support it. The rules-based international order is fracturing. In these transitions, capital seeks neutral assets with finite supply, historically gravitating toward gold.

Whether we’re witnessing the early stages of a multi-year capital rotation similar to the 1970s or early 2000s remains to be seen. What’s clear is that gold is responding to powerful macro forces, while Bitcoin appears caught in a technical correction pattern that has played out consistently across previous cycles. Both perspectives can be simultaneously true: the long-term thesis for hard assets strengthening while Bitcoin works through its cyclical bear market phase.

The key is recognizing these dynamics without assuming perfect foresight. Bull markets make everyone feel like a genius. Bear markets make fools of both bulls and bears through unpredictable volatility. The wisest approach may be maintaining exposure to multiple scenarios while staying informed about why each asset is moving as it does, positioning for opportunity rather than trying to predict every twist in what promises to be a volatile transition period in global financial markets.