Gold price experiencedits most severe single-day collapse in over five years this week, plunging morethan 5% from record highs and dragging Bitcoin (BTC) lower in a synchronizedselloff that erased billions in market capitalization. Theprecious metal fell from Monday's all-time peak of $4,381 per ounce to anintraday low of $4,082, marking the steepest decline since August 2020’s 5.7%crash. Bitcoin simultaneously dropped over 2%, falling from $110,000levels to test critical support at $108,000 as the correlation betweendigital and physical safe-haven assets reached 0.85.Why Gold Price Is Crashing?The goldcrash followed an unsustainable rally that sawprices surge 60% throughout 2025 and 25% in just the previous twomonths, creating what analysts described as "stratosphere" conditionsripe for correction. StandardChartered analyst Suki Cooper characterized the movement as a "technicalcorrection" after record-breaking precious metals inflows totaling$34.2 billion over ten weeks pushed the market into severely overboughtterritory. Bart Melek, global head of commodity strategy at TD Securities,confirmed dealers were "realizing gains after a strongrally" that proved unsustainable long-term.Profit-takingaccelerated asthe US dollar index strengthened 0.4%, making gold more expensive forinternational buyers and reducing its appeal against competing assets. Thetiming coincided with renewed optimism over US-China trade negotiations, withPresident Trump expressing confidence about reaching a deal with ChinesePresident Xi Jinping at their scheduled meeting. This easing of geopoliticaltensions diminished safe-haven demand that had propelled gold to consecutiverecord highs.Physicaldemand also weakened following the conclusion of the Diwali festival in India,the world's second-largest gold consumer, removing a significant source ofbuying pressure. Silver crashed even harder at 8.7% in itsworst single-day drop since February 2021, while platinum fell 5-7%,confirming the broad-based precious metals correction.Why Bitcoin Price Is GoingDown Today?Bitcoin'sdecline mirrored gold's weakness as the strengthening correlationbetween the two assets, currently at 0.85, near the all-time high of 0.9reached in April 2024, caused synchronized selling pressure. The cryptocurrencyended Tuesday's session at $108,342, dropping over 2% and retesting localsupport around the $108,000 level that coincides with late August lows andmarks the lower boundary of the months-long consolidation range.From mytechnical analysis of Bitcoin's chart, the price attempted to strengthenon Monday before ultimately pulling back sharply in direct reaction togold's crash. Bitcoin tested the critical support zone around $108,000,which aligns with late August lows and represents the lower boundary of theconsolidation drawn since mid-October. Importantly,the 200-day exponential moving average continues to provide support,meaning we remain technically in a bull trend. However, a breakdown belowthis range would open the door to further declines and a test of the$100,000 level, a major psychological support zone.Paul Howardfrom Wincent noted that "many analysts follow technical trendsincluding M2 money supply, gold, stock2flow models plus other metrics asways to predict Bitcoin's next move. Arguably many now indicate a bigupswing and with so many leveraged longs and shorts liquidated, and a positiveglobal macro environment may see Bitcoin as a gold laggard". Thecomment highlights how Bitcoin's underperformance relative to gold'searlier rally may reverse following the liquidation cleanup.Please also check my previous articles including Bitcoin and gold price predictions:Key Market Indicators forGold and BitcoinGold-Bitcoin CorrelationDrives Synchronized SelloffTheincreasingly tight correlation between gold and Bitcoin, rising fromnegative 0.8 in October 2021 to current levels of 0.85, explains whyboth assets experienced simultaneous pressure. MostafaAl-Mashita, Co-founder & Director of Sales and Trading at SecureDigital Markets, provided exclusive analysis: "Gold's loss of neutralityand Bitcoin's rise as a borderless asset mark a fundamental shift inglobal value dynamics. The recent gold sell-off, though expected after anextended rally, underscores how traditional havens are becoming toolsof policy rather than stores of neutrality".Hecontinued: "Nations like China, India, and Turkey are stockpiling goldto reduce reliance on the US dollar, turning it into a geopoliticalinstrument tied to state agendas. Bitcoin, though increasingly adopted byinstitutions and states, remains structurally decentralized and resistant tocontrol. It signals economic independence while functioning as both avolatile trading vehicle and a modern store of value. This isn't simplygold versus Bitcoin; it's a broader reallocation of trust, withgovernments asserting sovereignty through gold and individuals and institutionsseeking autonomy through Bitcoin".Initiallyon Tuesday, Bitcoin actually surged as gold crashed, briefly jumping above$113,000 as traders rotated capital from precious metals into crypto. AnalystAsh Crypto declared "the rotation from gold to Bitcoin has begun,"while Swissblock research pointed to similar patterns in April when goldfell 5% over three days before Bitcoin rallied from its macro bottom.However, this rotation proved short-lived as broader risk-off sentimenteventually pulled Bitcoin lower.Gold Technical Analysisand Price OutlookAfterreaching new all-time highs in the daily chart, gold stalled at resistancearound $4,350 per ounce, which after several sessions ofaccumulation triggered dynamic depreciation on Monday with a dropexceeding 5% to $4,124 per ounce. According to my technical analysis, tuesdaybrought continued declines of 1.5% and a test of the psychological $4,000level. At the time of writing, the metal was changing hands at $4,062, bouncingslightly from local support defined by the all-time highs from October8-9.Gold hassignificantly more room for correction, and I would not rule out a descenttoward $3,400, the 200-day exponential moving average, before astronger rebound materializes. The $2.1 trillion in marketcapitalization erased on Tuesday alone, equivalent to 55% of the entirecryptocurrency market's value according to trader Peter Brandt, demonstratesthe magnitude of this correction.Critical Support andResistance LevelsGold Technical Levels:Immediate resistance: $4,200-$4,235 marking previous consolidation highsCurrent price: $4,062 with slight bounce from October 8-9 ATH supportPsychological support: $4,000 round number testing investor confidenceKey support zone: $4,035 representing near-term floorBearish invalidation: $3,965 breakdown would confirm deeper correctionMajor correction target: $3,400 aligning with 200-day EMABitcoin Technical Levels:Consolidation resistance: $110,000-$113,000 upper boundary tested MondayCurrent price: $108,342 retesting critical support zoneKey support: $108,000 coinciding with late August lows and consolidation floorBull trend support: 200-day EMA maintaining bullish structurePsychological level: $100,000 major support if current range breaksHistorical CrashComparison: Bitcoin, Gold and SilverBitcoin and Gold PriceAnalysis, Frequently Asked QuestionsWhy did gold crash 5%on October 21, 2025?Goldcrashed 5-6% due to profit-taking after a 60% rally in 2025, combined witha stronger US dollar, easing US-China trade tensions, andtechnical correction from overbought conditions following $34.2 billion inprecious metals inflows over ten weeks.When was the last timegold fell this much in one day?The lasttime gold experienced a comparable or larger single-day decline was August 2020,when it dropped 5.7% during the Cyprus banking crisis and Federal Reservetapering concerns.Why is Bitcoinfalling with gold?Bitcoinfell alongside gold because the correlation between the two assets reached0.85, near the all-time high of 0.9, causing synchronized sellingpressure as investors treated both as linked safe-haven assets.Is the gold rallyover?Analysts viewthis as a technical correction rather than the end of the bull market,with gold potentially correcting toward $3,400 (the 200-day EMA) beforeresuming its uptrend, though the rally's pace needed to slow from unsustainablelevels.Why Bitcoin is crashing?Bitcoinremains in a technical bull trend as long as the 200-day EMAholds as support around $108,000, though a breakdown below this levelwould open the path to testing $100,000 psychological support beforea potential recovery.What caused silver todrop 8.7%?Silvercrashed 8.7% in its worst day since February 2021 due to the samefactors affecting gold—profit-taking, dollar strength, and easinggeopolitical tensions—amplified by silver's higher volatility and smallermarket size.This article was written by Damian Chmiel at www.financemagnates.com.