Market tensions intensified on January 29, following a large-scale selloff that wiped out billions of dollars across all asset classes. The sell-off hit both gold and cryptocurrencies, triggering a visible movement of capital into Bitcoin and other risky markets.
Bitcoin (BTC), the world’s largest cryptocurrency by market value, fell to around $81,000, a level last seen in April 2025, bringing its market capitalization down to around $1.64 trillion.
Gold, however, suffered a more severe blow. Nearly $1.6 trillion was wiped from its market value over the same period, a loss approaching the size of Bitcoin’s entire market capitalization.
Still, analysts say the broader pattern could ultimately favor Bitcoin, with expectations growing that capital turnover could define the next phase of the market.
First signals indicate a rotation from gold towards Bitcoin
João Pedro, market analyst and founder of Alphractal, had raised the possibility of a rotation a few weeks earlier.
In a previous article, he noted that gold was approaching a “buying high point,” a phase often followed by a liquidation event and temporary Bitcoin weakness. Since then, this sequence has played out almost exactly as planned.
According to João, gold’s recent rise reflects an influx of late buyers, which has helped fuel the momentum. Historically, this phase tends to revive “optimism and complacency” before moving into sideways price action, territory that gold may now enter.
“As liquidity gradually disappears from gold, the likelihood increases that capital will turn into risky assets.”
For many investors, major cryptocurrencies remain the primary risk assets of choice, with Bitcoin firmly at the center of liquidity and market attention.
Source: TradingView
João’s view is echoed by Henrik Zeberg, chief macroeconomist at Swissblock, who believes that the BTC-gold ratio could form a floor in the long term.
“Great bottom for the BTC-GOLD ratio in my opinion. Let the rotation begin.”
While there is no definitive timetable for how long this transition will last, the broader implications point to new capital inflows into Bitcoin.
João reinforced this perspective by stating:
“Historically, this phase takes place over several months and appears closely aligned with the historical fractal that Bitcoin has followed through cycles – the window where large institutional capital aggressively reallocates back into Bitcoin.”
Bullish conditions begin to align for Bitcoin
Bull market sentiment is gradually building, according to André Dragosch, European head of research at Bitwise, who believes continued strength in precious metals could ultimately support a new Bitcoin rally.
Dragosch links this outlook to reflation, a phase marked by policies aimed at boosting economic activity. He argues that the absence of such favorable macroeconomic factors has stunted risk appetite, but has not eliminated Bitcoin’s long-term appeal.
Despite the challenging macroeconomic backdrop, he highlights that Bitcoin exchange-traded products (ETPs) and corporate treasury holdings have increased their exposure by approximately 4.2 times, underscoring growing institutional conviction.
Source: Bitwise
He adds that several catalysts could drive the next leg higher, including trends in the ISM manufacturing index, the appointment of a new Federal Reserve chairman, increased capital deployment by major U.S. cable companies into Bitcoin ETFs, and more companies adopting Bitcoin treasury strategies.
Commenting on the relative valuation, Dragosch noted:
“BTC-Gold is severely undervalued and oversold from all angles,” adding that “this relative performance between BTC/Gold tends to move with global risk appetite.”
He pointed out that Bitcoin historically performed better in risk-off environments and struggled when investors retreated to defensive positioning.
Dragosch also pointed out a recurring market pattern: Gold typically moves first, outpacing Bitcoin by four to seven months, after which Bitcoin tends to outperform on a percentage basis.
Near-term weaknesses test key technical levels
Bitcoin has fallen below its two-year simple moving average (SMA), a level that previously served as a critical support zone.
Staying below this threshold could expose the asset to further downward pressure if bearish momentum persists.
However, history suggests that this phase often laid the foundations for major rebounds. In previous cycles, declines below the two-year moving average have coincided with prolonged accumulation by long-term investors in anticipation of broader bull markets.
Source: Alphractal
This fits the dominant narrative of a gradual capital rotation from gold to Bitcoin, which could see large institutions and their clients quietly building positions before a new rally emerges, again without a clear timetable.
Final Thoughts
- Bitcoin will benefit if capital continues to shift away from gold and toward risk assets, although there is still no clear timetable for when this shift might accelerate significantly.
- A combination of economic relief and a more risk-friendly environment could ultimately provide the catalyst needed for a sustained uptrend.
