A growing gap between crypto markets and gold is flashing a warning sign that’s hard to ignore. As gold trades near $5,000 an ounce, the performance of altcoins against the precious metal has sunk to its weakest level ever, according to analyst Michaël van de Poppe. The signal, based on the relative strength index (RSI) of altcoins versus gold, is now sitting near 25 on the weekly chart — a level typically linked with extreme market stress.
Van de Poppe says this kind of reading has only been seen once before, during the COVID-19 market crash. Back then, everything from stocks to crypto took a hit in a sudden “black swan” event. Today’s situation isn’t driven by a single shock, but the outcome looks similar: altcoins have been left in the dust while gold continues to shine.
Gold’s Surge Highlights Crypto’s Struggles
Gold’s steady climb toward the $5,000 mark has turned it into a tough benchmark for risk assets. Compared to the metal, many non-major cryptocurrencies now look historically cheap. The Bitcoin-gold ratio has also been under pressure, adding to concerns that digital assets are losing ground to traditional safe havens as investors seek stability.
Interestingly, the stress is showing up even as tokenized versions of gold gain traction on-chain. PAX Gold (PAXG), which represents ownership of physical gold bars stored in London vaults, is trading around $5,035, with daily volumes above $400 million. Tether Gold (XAUT) sits near $5,013 and has posted solid gains over the past week and month. Both tokens closely track the price of bullion, offering crypto-native exposure to gold without leaving the blockchain.
Despite rising adoption, these gold-backed tokens remain a tiny slice of the overall gold market. Even combined, the value of tokenized commodities — mostly gold and silver — is estimated to be in the $0.8 billion to $1 billion range. That’s barely noticeable next to gold’s multi-trillion-dollar global market.
RWA Tokens Grow, but Volatility Remains
The broader real-world asset (RWA) sector is expanding, helped by improving regulations and growing interest from institutions experimenting with on-chain funds and vault-linked products. Recent reports show tokenized gold and silver hitting new highs as more capital flows into blockchain-based representations of hard assets.
At the same time, trading activity remains volatile. Derivatives linked to RWA tokens have seen massive spikes in volume, with one recent week topping $15.5 billion as sharp drops in gold and silver futures triggered liquidations across leveraged positions. This highlights how quickly sentiment can flip in this still-niche market.
Oversold or Value Trap?
The extreme gap between altcoins and gold has sparked debate. Some traders see the low RSI reading as a rare opportunity, pointing out that such oversold conditions don’t happen often. Others warn that structural issues — like ongoing token unlocks and tighter liquidity — could keep altcoins under pressure for longer.
Whether this moment turns into a long-term buying opportunity or another painful chapter for altcoin investors may depend less on crypto narratives and more on broader macro trends. For now, the message from the Bitcoin-gold ratio is clear: gold is winning the safety trade, and the rest of the crypto market is paying the price.
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