Historical past says this ends one in every of two methods – and one is ugly.
Bitcoin is approaching its 50-week transferring common… a return of the bull, or a brand new crypto winter?… silver exploded as we predicted – however is gold your higher horse as we speak?… what historic knowledge says about buying and selling gold proper now
Bitcoin is on the cusp of reaching a important technical stage – and what occurs there might reignite the bull market…or set off the subsequent painful leg decrease in a crypto winter.
Our crypto knowledgeable, Luke Lango, put this pivot level on our radar final fall.
As Bitcoin was crashing, Luke famous that his largest concern was the lack of its 50-week transferring common (MA).
From Luke:
In previous cycles, this stage has typically marked the tip of the occasion.
Excluding the COVID anomaly, each significant break-and-close under the 50-week MA with the slope rolling over has marked the tip of a increase cycle.
In early November, Bitcoin fell under this important line within the sand. However fairly than proceed to fall, it started churning sideways. And since Christmas week, it’s been climbing – up about 10% since then.
Whereas we’re inspired, the actual take a look at – the 50-week MA – is quickly approaching, which you’ll be able to see under in Bitcoin’s two-year chart.
Supply: StockCharts
Bitcoin’s value historical past presents clues about how this may play out.
Bearish: In early 2022, Bitcoin misplaced its 50-week MA, rallied onerous to briefly contact it, solely to instantly collapse – shedding greater than 60% into early 2023.
Bullish: In early 2023, Bitcoin rallied to check its 50-week MA, acquired rejected, however strengthened and shortly pushed via. It then soared about 200% into spring 2024.
Beneath you possibly can see these two paths.
One factor ought to instantly bounce out to you…
The bearish end result happened on the heels of a crypto bull market, whereas the bullish end result occurred following a bear market.
We’re coming off a bull, which suggests a better chance of the result crypto buyers don’t need.
Might this time be completely different?
Positive – as we’ve identified within the Digest, Bitcoin is maturing from a moonshot “full danger” hypothesis to a closely invested a part of the mainstream monetary infrastructure, supported by institutional {dollars}.
Whereas that doubtlessly limits the huge upside that Bitcoin buyers loved previously, it might additionally cap the stomach-churning collapses.
Nonetheless, warning is our default place as we speak.
As we eye the 50-week MA at roughly $101,500, we recall Luke’s evaluation from December:
If we get rejected on the 50-week – like we did in July 2018 and March 2022 – that’ll be a really bearish sign for Bitcoin.
These have been bear-market rejections. Laborious stops. Pivot factors that preceded large downturns.
But when we bounce above the 50-week and sail increased – like we did in Might 2020 – that’ll be a really bullish sign for Bitcoin.
That second kicked off probably the most explosive bull market since 2017.
As I write on Thursday, Bitcoin has about 5% left to climb earlier than we hit this important stage.
We’ll maintain you up to date.
Checking in on “analog” Bitcoin (gold) and its silver sister
Over the previous yr, we’ve persistently urged Digest readers to personal each gold and silver. However as relative worth has shifted, we’ve additionally been clear about which steel ought to lead at completely different factors within the cycle.
Final yr, when the gold-to-silver ratio stretched to excessive ranges, we argued that silver was the higher horse for outperformance.
However as we speak, that ratio has collapsed. Is the management baton about to go again to gold?
To unpack this, let’s revisit the gold-to-silver ratio – a long-standing measure of relative worth between the 2 metals to see what it’s telling us now.
Merely put, this ratio tells us what number of ounces of silver equal the worth of 1 ounce of gold.
Traditionally, this ratio has been mean-reverting.
- Within the twentieth century, it averaged roughly 47:1
- From 2000 via 2020, it averaged nearer to 60:1
Within the first half of 2025, nevertheless, concern and a desire for gold despatched the ratio above 105 – simply shy of its COVID-panic peak. At that time, silver was deeply undervalued relative to gold.
However because the ratio started to roll over, we flagged silver’s uneven upside. In our July 25 Digest, we wrote:
We don’t anticipate a significant decline in gold’s value past regular profit-taking and wholesome “two steps ahead, one step again” market motion.
Due to this fact, if the gold/silver ratio is to proceed normalizing to the newer common of round 60, it’ll be as much as silver to do the heavy lifting – that means silver’s value positive factors should outpace these of gold.
That’s precisely what we anticipate.
Positive sufficient, since that Digest, whereas gold has climbed 37%, silver has exploded 136%.
However after this blistering rally, is it time to wager on gold for outperformance?
Silver’s explosive transfer has dramatically reset the gold-to-silver ratio. As I write Thursday, it sits at about 51 – its lowest stage since 2012. This is under the fashionable historic norm and even beneath the 2000–2020 common.
Virtually talking, it means silver has gone from undervalued to comparatively costly versus gold in a really brief interval.
Now, this doesn’t imply silver should crash. Nevertheless it does counsel the straightforward relative positive factors are behind us.
From right here, historical past argues that gold is extra prone to outperform silver because the ratio works its manner again towards equilibrium, which we’d peg within the mid-to-upper 50s, with 58 to 60 as an inexpensive medium-term goal.
Backside line: Silver did precisely what we anticipated when the ratio was excessive. Now that the pendulum has swung the opposite manner, the smarter relative wager is shifting again towards gold – even when each metals proceed rising in absolute phrases.
What does historic knowledge say a few gold commerce proper now?
It backs us up. Briefly, it says that now is an effective time to financial institution on increased gold costs.
A minimum of that’s the takeaway from TradeSmith’s Seasonality Device.
For newer Digest readers, TradeSmith is our company affiliate and one of many preeminent quant outlets within the funding business. They help greater than 130,000 buyers worldwide, monitoring roughly $29 billion in belongings via its analytics and portfolio instruments.
Their Seasonality Device is an instance of these instruments: it scans 1000’s of securities to uncover traditionally dependable calendar-based patterns that may assist buyers higher time entries and exits, even in risky or sideways markets.
For instance utilizing gold, let’s flip to the SPDR Gold Shares ETF (GLD).
As you possibly can see under, GLD is in the midst of a extremely constant seasonal power interval operating between January 8 and January 30.
This is a tightly outlined window that has repeated throughout market cycles, inflation regimes, and geopolitical backdrops.
Right here’s how GLD has behaved traditionally throughout this January window:
- 93.33% accuracy fee
- +2.22% common return
- +1.40% median return
- +36.83% annualized return
In different phrases, almost yearly over the examined interval, gold has moved increased throughout this stretch – no matter whether or not the inventory market was rising, falling, or chopping sideways.
This is an instance of why figuring out seasonal tendencies for your portfolio holdings issues
Gold doesn’t simply reply to inflation fears or Fed hypothesis in actual time.
It typically strikes forward of these narratives, following recurring behavioral and liquidity-driven patterns that solely present up if you analyze the info throughout many years.
Equally, 1000’s of shares comply with their very own patterns – particular home windows of time throughout which historical past suggests they’re prone to outperform.
This is the kind of perception the TradeSmith Seasonality Device is designed to supply buyers – not simply for gold, however for greater than 5,000 shares, ETFs, commodities, and currencies.
Subsequent Tuesday, January 20 at 10 a.m. Eastern, TradeSmith CEO Keith Kaplan will stroll via how this technique works on the Prediction 2026 occasion – together with how these seasonal home windows are recognized, examined, and utilized in real-world buying and selling.
Once you register to attend, you’ll get rapid entry to the Seasonality Device.
Right here’s Keith:
You should use the device to discover the outcomes of our highly effective analysis for the shares you personal or are considering of shopping for. It’s out there on-line till Monday, January 19.
Then at our Prediction 2026 webinar, I’ll present you the way our Seasonality device may also help you discover one of the best time to purchase and promote a inventory – all the way down to the day.
You can sign up for the event right here.
Whether or not you employ the Seasonality Device or not, simply acknowledge that in a high-valuation market like we now have as we speak, when you act can matter simply as a lot as what you personal.
Coming full circle…
With Bitcoin at a technical inflection level and relative worth shifting throughout the dear metals advanced, timing is changing into as vital as conviction.
We’ll proceed to watch these developments – and spotlight the place historic knowledge presents an edge – proper right here within the Digest.
Have a superb night,
Jeff Remsburg
Disclaimer: I personal GLD.
