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There has been a lot of chatter from crypto enthusiasts and promoters on social media these days about a great rotation out of precious metals and into crypto that will commence at any moment, and their charts and talking points have been dubious at best. This week, we will look at both the Bitcoin/Gold and Silver/Bitcoin ratios to see if we can get a clear-eyed view on where things are headed.
 

The first chart is Bitcoin/Gold, which I have defined as a nearly five-year ascending triangle. Those who follow my work have heard me say before that both ascending and descending triangle patterns are not inherently bullish or bearish; that is, they can represent either a continuation pattern or a reversal. Therefore, you must look for additional confirming information and watch closely to see how they break. In this case, the ascending triangle has already broken down, backtested and fallen away. In doing so, it also has created a compelling head & shoulders pattern that is now breaking down. This is certainly not a bullish picture for Bitcoin.
 

If we zoom out to capture Bitcoin's entire trading history on a weekly line chart, we can see how the breakdown fits into the larger picture, which is a breakdown and backtest of its historic bull channel. This chart paints a picture of Bitcoin's impending collapse against Gold, with an impulsive leg down from here.
 

The last chart is Silver/Bitcoin, which I have defined as an historic bear channel. Within that channel, we can see a pretty clearly defined 8-year descending triangle. Price now finds itself at the upper rail of each structure. There is likely to be some resistance here, but the breakout on the Stochastic indicator is an optimistic sign that Silver can eventually breakout. If and when it does, we would likely see an impulsive rise higher in Silver relative to Bitcoin.

From my point of view, there is indeed a great rotation set to take place. Unfortunately for Bitcoin investors, it is likely to be the complete opposite of what they hope and expect.

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