On Friday, Bitcoin sank to its deepest undervaluation versus Gold using the BTC–XAU Z-score, a metric that tracks deviation from the long-term ratio. The Z-score fell below −2 standard deviations, an unusually rare reading that signals extreme discounting versus gold.
The indicator is built on the BTC–XAU Power-Law bands, which model how the ratio moves around its historical norm. The model shows prior dips to the low band often preceded extended periods where Bitcoin outperformed gold.
A November 2022 undervaluation signal preceded roughly a 150% Bitcoin rally the following year, and a March 2020 signal preceded about a 1,170% one-year gain. These historical instances underpin the view that deep BTC discounts versus gold may mark major market bottoms.
Julius, the analyst who devised the bands, discussed the signal on social media and wrote about past cycle behavior; “Everything points to Bitcoin massively outperforming Gold over the coming months,” as he stated in a recent post here and reflected on earlier cycles here. Additional analysis shows Bitcoin’s parabolic phases often begin after gold moves decisively above its trend, according to another post sharing related data.
Several analysts now forecast that Bitcoin could reach $200,000–$300,000 by the end of 2026 if historical patterns repeat.
