A major market liquidation on January 29th saw billions wiped from asset classes, including gold and cryptocurrencies. Bitcoin fell to around $81,000, while gold lost nearly $1.6 trillion in value. Analysts suggest this sell-off may trigger a capital rotation from gold into Bitcoin and other risk assets, setting the stage for a potential market shift.
Market tension escalated following a large-scale liquidation event that wiped billions from asset classes on January 29th. The sell-off hit both gold and cryptocurrencies, triggering capital movement into Bitcoin and other risk markets.
Bitcoin fell to around $81,000, a level last seen in April 2025. This dragged its market capitalization down to roughly $1.64 trillion.
Gold suffered a more severe blow, losing nearly $1.6 trillion in market value. This loss approaches the size of Bitcoin’s entire market capitalization.
Analysts argue the broader setup may ultimately favor Bitcoin. Growing expectations suggest capital rotation could define the market’s next phase.
Market analyst João Pedro had flagged the possibility of a rotation weeks earlier. He noted gold was approaching a ‘Buy Climax,’ a phase often followed by liquidation and temporary Bitcoin weakness.
According to João, gold’s recent surge reflected an influx of late buyers, which drove momentum higher. He stated, “As liquidity gradually exits gold, the probability increases that capital rotates into risk assets.”
For many investors, major cryptocurrencies remain the primary risk assets of choice. Bitcoin sits firmly at the center of liquidity and market attention.
This view is echoed by Henrik Zeberg of Swissblock, who believes the BTC-gold ratio may be forming a long-term bottom. While there is no definitive timeline, the implication points toward renewed capital inflows into Bitcoin.
Bull-market sentiment is gradually building, according to André Dragosch of Bitwise. He believes ongoing strength in precious metals could ultimately support a renewed Bitcoin rally.
Dragosch links this outlook to reflation, a phase marked by policies aimed at stimulating economic activity. He argues the absence of such macro tailwinds has delayed, but not eliminated, Bitcoin’s long-term appeal.
Several catalysts could drive the next leg higher for Bitcoin. These include trends in the ISM Manufacturing Index and increased capital deployment by major U.S. wirehouses into Bitcoin ETFs.
Commenting on relative valuation, Dragosch noted, “BTC-Gold is heavily under-priced and over-sold any way you look at it.” He added that this relative performance tends to move with global risk appetite.
Bitcoin has slipped below its two-year simple moving average, a critical historical support zone. Holding below this threshold could expose the asset to further downside pressure.
However, history suggests this phase has often laid the foundation for major rallies. In previous cycles, dips below this level coincided with prolonged accumulation by long-term investors.
This aligns with the narrative of a gradual capital rotation from gold into Bitcoin. It could see institutions quietly build positions before a renewed rally emerges.
