Bitcoin’s recent price decline reflects short-term market positioning and liquidity stress rather than a structural failure of its store-of-value thesis, according to analysts. While the cryptocurrency has dropped 13.6% over the last month, it held relatively steady compared to a sharp reversal in gold and silver. Market observers note that capital recently flowed into metals instead of crypto, but this could revert. The market has cleared significant leverage, though subdued ETF flows and limited whale accumulation suggest a lack of immediate catalysts for a major rally.
Analysts say Bitcoin’s drawdown reflects positioning and liquidity stress, though views diverge on whether demand will return. The debate centers on whether the move signals a deeper erosion of Bitcoin’s store-of-value narrative.
Bitcoin found a temporary footing, trading near $78,800 after a period of decline. This followed a sharp reversal in metals markets, with silver posting one of its steepest single-day drops in decades.
Martin Gaspar, a senior crypto market strategist at FalconX, noted capital that may have flowed to crypto instead funneled to silver recently. “This could revert as silver cools off,” Gaspar warned in an investor note.
He pointed to upcoming policy developments and industry flow catalysts as key factors. These include progress on a U.S. crypto market structure bill and Binance‘s plan to convert about $1 billion into Bitcoin.
Zerocap stated it holds a constructive long-term view, arguing Bitcoin retains store-of-value advantages over gold. The firm claimed current price action is driven more by liquidity and risk management than structural stress.
Galaxy Digital head of research Alex Thorn offered a more cautious read. He noted “little evidence of significant accumulation from whales or long-term holders” amid the slide.
Analysts in conversation largely agree the sell-off reflects short-term positioning. Vincent Liu of Kronos Research said a rotation into metals indicates macro allocation shifts rather than capitulation.
Siwon Huh, a researcher at Four Pillars, noted the spillover from a massive metals sell-off spread to the highly leveraged crypto market. He observed that gold has improved its liquidity through tokenization and connection to DeFi.
On-chain data shows over 22% of Bitcoin’s circulating supply sits at a loss, which could amplify downside pressure. Spot ETF flows are near zero, while options markets are pricing more downside protection.
The market has cleared leverage-driven sellers without panic, leaving price dependent on new demand or policy support. For now, the rotation from metals back into crypto appears too weak to reverse the current pattern.
