Why Bitcoin’s price pattern and macro fundamentals signal a major bull run this year
Introduction
Bitcoin is on the cusp of a major breakout, and this time there’s a powerful clue from gold — the world’s oldest store of value. Over the past few years, Bitcoin’s price action has mirrored gold’s ascent before its explosive rally. Both assets share a common driver: currency debasement caused by mounting U.S. debt. In this article, we’ll break down the technical setup behind Bitcoin’s potential surge, explain why currency erosion fuels digital and physical gold alike, and what this means for crypto investors in the months ahead.
The Bitcoin-Gold Price Pattern: Unlocking the Setup
What is an Ascending Wedge?
An ascending wedge is a chart pattern where the price moves within two converging upward trend lines, creating a tightening range. This "compression" hints at a big price move once it breaks out.
- Gold’s case: Before its 100% rally in about 18 months, gold consolidated in an ascending wedge.
- Bitcoin’s case: Bitcoin’s recent price action shows a nearly identical structure — trading between rising support and resistance lines that are drawing closer over time.
Investor takeaway: If Bitcoin follows gold’s blueprint, a sharp breakout could be imminent, with the biggest phase of this bull market kicking off within 90 days.
Answer Box: What is an ascending wedge and why does it matter for Bitcoin?
An ascending wedge is a chart pattern showing price squeezed between two upward-sloping lines moving closer together. It signals that the current trend is losing momentum and often precedes a big price move once the price breaks out. Bitcoin currently trades in this pattern, suggesting a strong potential for a decisive rally or pullback soon.
Why Gold and Bitcoin Go Hand in Hand
Bitcoin is often called “digital gold,” and for good reason:
- Scarcity: Gold’s supply grows about 1.5%–2% yearly, Bitcoin’s capped at 21 million coins with supply growth halving roughly every 4 years.
- Durability and trust: Gold has centuries of credibility; Bitcoin offers decentralized, government-independent scarcity.
- No counterparty risk: Neither depends on a company or government to hold value.
When Larry Fink, CEO of BlackRock — the world's largest asset manager — called Bitcoin “digital gold,” it marked institutional validation of this analogy.
The Real Driver Behind Gold & Bitcoin: Currency Debasement
The U.S. dollar has lost roughly 97% of its purchasing power over the last century, and 20% just in the past five years.
- Example: A $100 purchase in 2020 now only buys about $80 worth of goods.
- U.S. debt grew from $70 million in the 1790s to $37+ trillion today, with the last $2 trillion added in just one year.
More debt dilutes every dollar’s buying power, a process known as currency debasement. Investors look to scarce assets like gold and Bitcoin as hedges against this erosion.
Data Callout: U.S. Dollar Purchasing Power Loss (Last 5 Years)
| Year | Purchasing Power Index (2020=100) | % Decline from 2020 |
|---|---|---|
| 2020 | 100 | 0% |
| 2021 | 95 | 5% |
| 2022 | 87 | 13% |
| 2023 | 82 | 18% |
| 2024 | 80 | 20% |
Source: U.S. Bureau of Labor Statistics CPI data.
Correlation and Divergence: How Gold and Bitcoin Move Together
- Short-term: Bitcoin and gold’s price movements fluctuate between strong positive correlation (+0.75) and strong inverse correlation (–0.75).
- Long-term: Over 5 years, the correlation tends to stay positive—both assets generally rise and fall in sync amid macro trends.
Bitcoin’s price has lagged gold’s recent surge (55% gain in gold vs. sideways Bitcoin in 2025), but this lag is expected as gold moves first due to steady central bank buying and its established status.
What Could Go Wrong? Risks to Watch
- Technical breakdown: If Bitcoin breaks down below the ascending wedge instead of up, it could signal a major correction instead of a rally.
- Macro shifts: Any U.S. policymaker actions that stabilize or boost the dollar could reduce gold and Bitcoin’s appeal as hedges.
- Market volatility: Cryptos remain volatile and susceptible to regulatory changes or large sell-offs.
- Correlation breakdown: Prolonged divergence between gold and Bitcoin may reduce the effectiveness of the debasement trade thesis.
Summary: Key Takeaways for Investors
- Bitcoin’s price compressing inside an ascending wedge hints at a major breakout soon.
- Gold’s identical past price structure helps time and contextualize Bitcoin’s move.
- Both benefit from the longer-term trend of currency debasement caused by soaring U.S. debt.
- Bitcoin’s “digital gold” narrative gained credibility with institutional adoption.
- Watch how Bitcoin’s price responds in the next 90 days—it could mark the start of a powerful bull phase.
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FAQ
Q1: What makes Bitcoin similar to gold?
Bitcoin shares key traits with gold: scarcity, durability, lack of counterparty risk, and independence from government control. Both are seen as hedges against currency debasement.
Q2: How does currency debasement affect Bitcoin?
As fiat money loses purchasing power due to rising debt and inflation, scarce assets like Bitcoin tend to attract investment as value stores.
Q3: Why is the ascending wedge pattern important?
It signals increasing price compression, often followed by a sharp breakout or breakdown, indicating potential for a major price movement.
Q4: Can Bitcoin and gold move in opposite directions?
Yes, in the short term they can diverge due to factors like market sentiment, but over the long term they tend to move together influenced by macro trends.
Q5: How soon can Bitcoin’s breakout happen?
Chart patterns and gold’s historical precedent suggest a decisive move could occur within the next 90 days.
Disclaimer
This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are highly volatile and involve risk. Always conduct your own research and consult a financial advisor before making investment decisions.
By Wolfy Wealth - Empowering crypto investors since 2016
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Disclosure: Authors may be crypto investors mentioned in this newsletter. Wolfy Wealth Crypto newsletter, does not represent an offer to trade securities or other financial instruments. Our analyses, information and investment strategies are for informational purposes only, in order to spread knowledge about the crypto market. Any investments in variable income may cause partial or total loss of the capital used. Therefore, the recipient of this newsletter should always develop their own analyses and investment strategies. In addition, any investment decisions should be based on the investor's risk profile
