Bitcoin Stabilizes at $66,000 as Analysts Eye “Undervalued” Signal Relative to Gold
Bitcoin has partially recovered from its initial decline below $64,000. With gold now considered "overextended" by some analysts, there is a
Quick overview
- Bitcoin is currently holding support above $66,000 after a tumultuous weekend marked by US-Israeli airstrikes against Iran.
- Despite an initial drop to $63,176, Bitcoin rebounded to around $68,000, indicating a potential for further gains.
- Analysts suggest Bitcoin may be undervalued compared to gold, with a Z-score indicating a possible significant price increase if it falls below -2.
- The upcoming market open on Monday will be crucial for Bitcoin's trajectory, with scenarios ranging from bullish gains to bearish declines.
After one of the most tumultuous weekends in geopolitical history, when coordinated US-Israeli airstrikes against Iran sent shockwaves through international markets, Bitcoin BTC/USD is holding onto support over $66,000. Bitcoin has partially recovered from its initial decline below $64,000. With gold now considered “overextended” by some analysts, there is a growing group that thinks Bitcoin may be preparing for its next significant surge.
The Weekend Shock: BTC Drops to $63,176, Then Bounces to $68,000
Bitcoin reacted more quickly than any other asset class after news broke late Saturday that US and Israeli forces were carrying out military operations inside Iran, including the purported killing of Supreme Leader Ali Khamenei. According to data from The Kobeissi Letter, over $100 million in leveraged long positions were liquidated in just 15 minutes, causing Bitcoin to drop from roughly $65,572 to a low of $63,176 in just an hour. In that one hour, the whole cryptocurrency market lost an estimated $128 billion.
But Bitcoin’s decline was short-lived. Bitcoin surged back above $67,000 as early Asian trading sessions started to process the news. It then hit an intraday high of $68,043 – a gain of almost 2% from the price before to the strike. As of this writing, Bitcoin has leveled down around $66,546, indicating cautious consolidation before the regular market opens on Monday.
Bitcoin Undervalued Relative to Gold: The Bull Case for a Major Reversal
A counterargument has surfaced amid the geopolitical sound. While gold has become “overextended” after rising past $5,247 per ounce (with tokenized gold PAX Gold trading at $5,404 at the time of writing), Bitcoin is currently trading 24%–66% below its historical trend, according to Samson Mow, CEO of Bitcoin technology company Jan3.
According to Mow, the most important indicator to keep an eye on is Bitcoin’s Z-score in relation to gold. This metric monitors the deviation of the Bitcoin-to-gold ratio from its historical average. Bitcoin has traditionally seen significant price increases when the Z-score falls below -2:
- November 2022 (FTX collapse): Z-score dropped below -3 → Over the next 12 months, Bitcoin surged over 150%.
- The COVID-19 pandemic in March 2020 caused the Z-score to drop below -2. After a 12-month spike of over 300%, Bitcoin reached approximately $69,00 by November 2021.
Although it is not yet at the crucial -2 threshold, the BTC-to-gold Z-score is currently going in that direction at about -1.24. This indicator may break through the critical threshold, which has traditionally been a prelude to Bitcoin’s meteoric rise, if geopolitical unrest and gold’s superior performance continue.
BTC/USD Technical Picture: $74,000 Bull Target vs. $50,000 Bear Scenario
The short-term technical picture is starkly split between two groups, despite the positive fundamental argument.
The Bull Case: $73,000–$74,000
Bitcoin has “deviated below the support zone” on the three-day chart, and it has now “flipped resistance into support” — a classic setup for a continued rally, according to trader BitBull. The price range that BitBull is targeting is $73,000–74,000. In the meanwhile, trader Michaël van de Poppe says a relief rally, which he believes might occur in March or April, needs to be confirmed by a sustained break above Bitcoin’s 21-day simple moving average at $67,627.
The CME Bitcoin futures gap at $65,880, which frequently serves as a gravitational attraction and could need to be “filled” before a prolonged upward advance can take place, is a noteworthy short-term variable.
The Bear Case: $50,000 and the 2022 Parallel
More suffering lies ahead, according to several observers. Bitcoin has failed to follow the rise of gold, silver, and other safe-haven assets, and is currently about 50% below its peak of $126,000, which was reached in October 2024. Price movement may rise toward $50,000 if stocks fall off substantially on Monday and institutional Bitcoin ETF outflows resume, according to some analysts who see price activity correlating with the 2022 bear market.
The Macro Wild Card: Strait of Hormuz and the Threat of 5% US Inflation
In addition to the current military crisis, Iran’s claim to be closing the Strait of Hormuz, a vital route for international oil shipments, is causing markets to worry about a secondary effect. Resource trading Citing data from JPMorgan, the Kobeissi Letter predicted that the Consumer Price Index (CPI) may rise to 5%, a level not seen since March 2023, when the Federal Reserve was sharply raising interest rates.
For Bitcoin, this inflation risk presents a conundrum. On the one hand, tangible assets like Bitcoin have historically been more appealing as a store of value in a context of increased inflation. However, strong expectations for a Fed rate hike brought on by a shock to the oil price could discourage risk-on assets. As of right now, Bitcoin is still trading more like a risk asset than a safe haven.
Bitcoin Price Prediction: Monday’s Market Open Is the Decisive Moment
The traditional market open will be the first true stress test for Bitcoin’s weekend recovery, since US equity futures are already down 0.65% going into Monday. There are multiple situations at play:
- Bullish scenario: Bitcoin breaks above $67,627 (21-day MA), the conflict is contained, and stocks settle, paving the way for $73,000–74,000 in the upcoming weeks.
- Base case: As markets await geopolitical clarity, there will likely be a sideways consolidation between $64,000 and $68,000. The CME gap at $65,880 will probably be revisited.
- Bearish scenario: Monday’s equity sell-off leads to leveraged liquidations and ETF withdrawals, which could push Bitcoin toward $60,000 and even $50,000 if macrodeterioration picks up speed.
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