Gold crashes 5%! Dead cat bounce or buy-the-dip opportunity?Gold spot in USDTHINKMARKETS:XAUUSDThinkMarketsGold has taken a brutal hit, plunging over 5% from the $4,550 highs down to $4,300 as profit-taking slams the market in thin holiday trade. We are now seeing a bounce toward $4,400, but the big question is: is this just a dead cat bounce before a drop to $4,150? In this video, we analyse the sharp reversal driven by year-end profit-taking and thin liquidity after an extraordinary ~70% rally in 2025. We then map out the critical Fibonacci retracement zones that will determine whether we see a V-shaped recovery or another leg lower. Key drivers Profit-taking & thin liquidity: The 5% drop was fuelled by a lack of buyers to absorb heavy selling in a thin, pre-New Year market. This is classic risk-off behaviour after an extended run. Dead-cat-bounce risk: Bounces to the 38.2% ($4,400) or 50% ($4,430) Fibonacci levels are typical after violent drops. If price rejects here, the technical structure favours another leg down. Downside targets: A measured move extension from a rejection at $4,400 points to a target around $4,150, which aligns with the 100% Fibonacci extension and previous support zones. RSI reset: The 4-hour RSI has swung from overbought to oversold in one go. A bounce to the 50-60 level on the RSI would likely reset momentum for the next wave of selling. Trade planBearish continuation: Sell the rally into $4,400–$4,430, targeting $4,170–$4,180 with a stop above $4,500. Bullish reversal: Watch for hidden bullish divergence on the RSI or a break above the 61.8% retracement ($4,460) to invalidate the immediate bearish bias. Are you selling this bounce or waiting for the bottom? Share your plan in the comments, and happy New Year to all traders! See you in 2026. This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.