Easing trade tensions between the U.S. and China are fostering a broader risk-on sentiment that could pressure gold while favoring riskier assets like bitcoin (BTC).
Over the past two weeks, BTC has outperformed gold (XAU) by a wide margin—and that trend may soon accelerate.
A key driver behind this outlook is the bullish breakout in the bitcoin-to-gold ratio, which tracks the value of BTC relative to gold in U.S. dollars. This breakout aligns with softening rhetoric between Washington and Beijing.
The ratio recently emerged from an inverse head-and-shoulders formation—a classic technical pattern often signaling a shift from bearish to bullish momentum. This particular setup featured a central trough flanked by two smaller dips, with a trendline connecting their intermediate highs. The breakout above this line indicates growing strength in bitcoin relative to gold.
Technical analysis suggests the ratio, currently at 32.00, could climb to at least 35.00. That projection is based on adding the depth of the pattern’s lowest trough to the breakout level—a common technique for estimating price targets in chart analysis.
Historically, BTC has tended to play catch-up with major gold rallies, and recent market action reflects that pattern. After peaking above $3,500 on April 22, gold has declined more than 8% to $3,211, according to TradingView data. Over the same period, BTC has surged nearly 19%, reaching $104,000.
The prospect of improved trade relations is adding fuel to the momentum. On Monday, the U.S. and China announced a mutual agreement to reduce tariffs. In a joint statement released in Geneva, China committed to lowering tariffs on U.S. goods from 125% to 10% for 90 days, while the U.S. proposed a cut on Chinese imports from 145% to 30%.
“The tariff reduction could see a broader return to risk-on positioning, with crypto and equities both likely to benefit from renewed investor confidence and global capital flows,” said Mena Theodorou, co-founder of crypto exchange Coinstash, in an email to CoinDesk.
“The rally comes as the macro backdrop takes a positive turn: in a landmark move, the U.S. has struck trade deals with both China and the UK, while Putin and Zelensky are set to meet on Thursday to discuss a potential ceasefire. These developments have lifted risk sentiment globally, crypto included,” she added.
With geopolitical winds shifting and technicals aligning, Bitcoin appears poised to extend its dominance over gold in the near term.
