Gold Hits Historic $5,000 Milestone as Bitcoin Sinks Below $90,000: When Will the "Risk-Off" Tide Turn?

TradingKey - Gold and silver prices hit new record highs while Bitcoin continues to weaken; can the Fed's interest rate decision this Wednesday reverse the situation?

On Monday (January 26), precious metal prices continued to surge to record highs, with spot gold (XAUUSD) prices breaking through the $5,000 mark, and spot silver prices (XAGUSD) surpassing the $100 level. Year-to-date, gold has surged over 17%, and silver has risen more than 50%.

Spot Gold Price Chart, Source: TradingView.

In contrast, the cryptocurrency market fell nearly 1% again today, with total market capitalization briefly dropping below $3 trillion, a new low for the past month. This morning, Bitcoin (BTC) prices dropped to near $85,000; the current price is $87,793, almost wiping out its year-to-date gains.

Bitcoin Price Chart, Source: TradingView.

A week later, a deep correction in the crypto market has once again dealt a heavy blow to bulls. In the past 24 hours, nearly 200,000 users were liquidated for a total of $670 million, with long positions accounting for $600 million, or nearly 90%. Last Monday (January 19), 240,000 people were liquidated in the crypto market for $800 million. Crypto Market Liquidation Data, Source: CoinGlass.

Currently, precious metals and cryptocurrencies are two diametrically opposed markets. Precious metals, especially gold and silver, continue to hit record highs, attracting large inflows of hot money, while the crypto market's sluggishness has led to persistent capital flight, with approximately $1.2 trillion lost from its $4.28 trillion peak.

Even more remarkably, bullish sentiment for gold remains high. Among them, Bank of America (BAC) believes gold prices could reach $6,000 by the spring of 2026, while Goldman Sachs (GS) has raised its year-end 2026 target for gold to $5,400.

By comparison, bullish sentiment for Bitcoin has plummeted recently, with the sentiment index at 29, remaining in a state of fear. In fact, based on the four-year cycle, a bear market is imminent. Market concerns continue to rise, and without significant bullish catalysts to alleviate investor worries, confidence is severely lacking.

This Wednesday (January 28), the Federal Reserve will hold its first interest rate meeting of 2026. The market widely expects rates to remain unchanged, making it difficult for the crypto market to attract capital back; the next meeting is on March 18, which is when the market might finally gain favor with capital, a key factor in whether the crypto bull market can continue.