Investors are showing a pronounced preference for precious metals, as evidenced by gold reaching a historic high of over $5,500 per ounce for the first time this week. In stark contrast, bitcoin has seen a decline, slipping below $85,000, marking its lowest point since November of last year.
Lacie Zhang, a research analyst at Bitget Wallet, attributed the surge in gold prices to a notable shift towards traditional safe haven assets. This trend is largely driven by investor concerns around US policy uncertainty, geopolitical tensions, and fiscal instability. Reflecting this change in sentiment, JM Bullion’s gold Fear and Greed Index has surged to 99, indicating an atmosphere of “extreme greed” among gold investors. Conversely, the crypto Fear and Greed Index from CoinMarketCap sits at a mere 38, indicating a state of “fear” dominating the cryptocurrency market.
Experts suggest that the downturn in bitcoin’s prices is not solely a reflection of the dollar’s weakening—a dynamic that would typically favor cryptocurrencies. According to Greg Magadini, director of derivatives at Amberdata, the crypto market’s challenges stem from a host of global risks, including Japan’s significant debt crisis and increasing bond yields. These factors have contributed to a broader apprehension regarding government finances on a worldwide scale.
As if that weren’t enough, bitcoin ETFs are also facing difficulties, with reported outflows of $160.1 million in the current week alone, as per data from SoSoValue. Julian Moreno, head of research at CryptoQuant, highlighted that bitcoin ETFs experienced a staggering $6.1 billion in net outflows since their peak at $72.6 billion in cumulative flows on October 10, 2025, bringing total holdings down to $66.5 billion—an 8.4% setback that signifies a crucial stress test for the sector. Moreno noted that the future of investments in bitcoin ETFs hinges on whether prices maintain levels above the ETF realized price; a failure to do so could lead to active selling rather than passive consolidation.
In a concerning development, CoinDesk reported that since bitcoin dipped below $88,000, 63% of investors are now “underwater.” A further drop below the $85,000 threshold could exacerbate selling pressure as investors scramble to mitigate losses.
For long-term holders, data from Glassnode revealed a net decline of approximately 144,000 BTC in long-term holder supply over the past month, marking the fastest sell-off since August. Nic Puckrin, cofounder of Coin Bureau, conveyed to Sherwood News that while this sell-off doesn’t necessarily signal the end of the bull market, it does signify a later stage in the cycle. He cautioned that price movements might become more volatile and potentially less sustainable going forward. Puckrin further noted that as institutional investors increasingly view bitcoin as a legitimate asset class, there could be a gradual shift in ownership from early adopters to these institutional buyers.
