Bitcoin falls to $86,000 as gold hits new record high above $5,000
Gold prices reached a historic high of $5,080 per ounce on Monday, marking a 17 percent increase in January 2026 alone. Meanwhile, Bitcoin temporarily dropped to around $86,000, marking a five-week low – BTC has since climbed slightly back above $87,000.
The digital leading currency now sits 30 percent below its October peak of $126,000 and has surrendered all gains for the year. Silver is also benefiting from the flight to precious metals, breaking through $107 per ounce for the first time, representing a 48 percent gain in 2026. The narrative that Bitcoin is digital gold has been (once again) debunked.
Traders are fleeing into precious metals amid escalating trade tensions and geopolitical uncertainty. The Trump administration has intensified tariff threats, with the US president threatening Canada with 100 percent tariffs over a trade agreement with China. Additionally, the prospect of a potential government shutdown at month’s end is adding pressure to markets. Analysts at BTSE exchange attribute the divergent performance to the likelihood of a budget freeze and expectations that the Federal Reserve will hold interest rates steady given robust growth and employment figures.
Investors prefer gold over US Treasury bonds
In uncertain times, capital typically flows into safe havens like US Treasury bonds and gold, yet the current situation shows a clear preference for the precious metal. Global investors are less inclined to invest in government bonds due to the looming government shutdown and Trump’s recent tariff threats regarding Greenland. Sustained demand from central banks and a weaker US dollar reinforce gold’s role as lasting protection against global risks. Since the prior year, gold has gained 83 percent, while Bitcoin has lost 17 percent over the same period.
On-chain data from CryptoQuant shows that Bitcoin holders are selling at a loss for the first time since October 2023. Older buyers are exiting positions while newer holders are stepping in — a pattern typically indicative of a consolidation phase. Glassnode analysts report significant supply overhang above the $100,000 mark, with rallies repeatedly hitting sellers near the prices at which recent buyers originally entered. Market structure suggests sufficient sellers exist at higher levels to cap price rallies.
Futures markets and derivatives signal continued consolidation
Market mechanics are reinforcing cautious sentiment in crypto. Futures volumes remain compressed, leverage is dampened, and recent price moves have occurred on thin liquidity rather than expanding participation. Bitcoin’s price is stagnating below key cost-basis levels for short-term holders near $98,000. On prediction markets, traders are increasingly betting that gold will remain above $5,500 through mid-year, while they expect further consolidation for Bitcoin before a renewed uptrend can take hold.
Ethereum is showing even greater weakness than Bitcoin, trading below $2,800, representing a decline of more than 40 percent from its all-time high of $4,946. Weak demand for higher-volatility crypto assets and dampened participation in derivatives markets underscore the cautious market sentiment. While gold absorbs macroeconomic stress and fulfills its safe-haven function, Bitcoin continues to grapple with internal supply dynamics rather than responding to external catalysts. Market observers expect the divergence between the two assets to persist for now.
