Gold has broken through the $5,000 per ounce barrier, reaching a record high of $5,080, while Bitcoin struggles to gain momentum, trading sideways near $87,000. This widening divergence highlights a significant split in market behavior, with gold absorbing macro stress and Bitcoin digesting internal supply dynamics.
According to analysis from CryptoQuant, Bitcoin holders have begun selling at a loss for the first time since October 2023. This pattern, where older buyers exit and newer holders step in, typically signals a market moving into consolidation rather than acceleration. Glassnode reinforces this view, noting that rallies are repeatedly capped by supply from sellers near recent buyers' cost bases, particularly below $98,000 and with a dense supply overhang above $100,000.
Market mechanics show thin participation, with compressed futures volumes and subdued leverage deployment. Price movements are occurring in thin liquidity rather than alongside expanding market participation. On prediction markets like Polymarket, traders are assigning higher odds to gold holding above $5,500 through mid-year, while betting that Bitcoin will see further consolidation before any renewed upside.
The gold rally is attributed to rising geopolitical flashpoints, sustained central bank buying, a weaker U.S. dollar, and specific fears of a potential U.S. government shutdown and escalated tariff threats from the Trump administration. Gold has gained 83% since the same time last year, while Bitcoin has declined 17% and is now 30% below its October peak of $126,000.
Jeff Mei, COO of the BTSE exchange, notes that in these uncertain times, capital is moving towards safe-haven assets. However, due to the potential government shutdown and recent tariff threats, global investors are showing less inclination towards U.S. Treasuries and more towards gold. Meanwhile, Ethereum is underperforming Bitcoin, with weak demand and muted derivatives participation, and has fallen more than 40% from its August all-time high.
