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A historic liquidation event witnessed the gold and silver markets in the last 48 hours, wiping out about $7 trillion in the value of the precious metals. Meanwhile, Bitcoin fell 7% but was surprisingly resilient amid the broader selloff.
Bitcoin analyst Joe Consorti noted that the decrease in the market capitalization of the precious metal was about four times that of the total capitalization of Bitcoin.
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Bitcoin avoids the liquidation chain that crushed gold and silver prices
Data from blockchain analytics company Santiment highlighted the rarity of the event. The company indicated that Bitcoin prices and altcoins It remained flat, while gold fell by more than 8% and silver by more than 25%.
It should be noted that Price of gold It collapsed from a high of $5,600 an ounce to around $4,700, while the price of silver fell from $121 to $77.
Market watchers have pegged the sale of precious metals President Donald Trump’s nomination of Kevin Warsh To replace Jerome Powell as chairman of the Federal Reserve.
It is considered It is widely seen as an inflation hawk Committed to defending the US dollar. This situation upends the consumption narrative that has driven the recent rise in metal prices.
It should be noted that traders entered into leveraged bets, assuming that the administration will try to cut interest rates sharply.
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However, Warsh’s appointment signaled a shift towards tighter monetary policy, which led to a violent collapse in trade.
“The violent movement in the metals is a symptom of a lot of hot money chasing prices that have recently been stopped, with leverage withdrawn, and profits being made among many players.”
At the same time, some market experts said that… The gold market was about to correct, too It has become hot amid growing public interest in precious metals.
“While parabolic movements often raise asset prices more than most investors think, advanced manifestations usually occur at the end of the cycle. In our opinion, the bubble today is not in AI, but in gold. A rising dollar could break that bubble, as happened between 1980 and 2000 when the price of gold fell more than 60%”, said the founder Cathi Invest.
What’s next for Bitcoin?
The question facing Bitcoin investors now is whether the stability of the largest cryptocurrency near $82,000 indicates a decoupling from traditional products or a delayed response.
Unlike metals, Bitcoin did not participate in the euphoric final phase of the “deal”. This can leave you with less speculative foam and more room to jump.
Some analysts argue that when liquidity flows out of crowded metals trading, Capital can be converted into digital assets. These observers see the scarcity of Bitcoin as different from the industrial dynamics that currently weigh on gold and silver.
However, if Warsh’s appointment leads to a continued tightening of liquidity around the world, risk assets, including cryptocurrencies, could face renewed pressure in the coming weeks.
