Gold at Record High, Crypto Down $150B – What’s Going On?

The crypto market shed $150 billion in capitalization as Bitcoin plunged below $88,000 amid a brutal leverage unwind, while gold surged past $4,800 per ounce for the first time in history.

The sharp divergence came as President Donald Trump’s escalating tariff threats against European allies over Greenland triggered a broad flight from US risk assets, with geopolitical tensions reaching their highest point since the Liberation Day tariff announcements of April 2025.

Bitcoin tumbled 9% in 48 hours to $87,000, wiping out $360 million in leveraged long positions in a single hour late Monday.

The selloff intensified pressure on an already fragile market structure, with short-term holders (those who purchased Bitcoin within the past 155 days) now underwater for eight consecutive weeks, requiring a recovery above $98,000 to return to profitability, according to Glassnode data.

Market Sentiment Hits Multi-Year Lows

CoinGlass liquidation data revealed 181,570 traders were wiped out over 24 hours, with $998.33 million in long positions liquidated versus just $71.39 million in shorts.

Bitcoin accounted for $440.19 million in forced selling, while Ethereum accounted for $392.38 million in liquidations, as the cascade accelerated during thin Asian trading hours.

Rex from R89Capital captured the despair gripping crypto natives, stating, “sentiment has bottomed out for sure. No one gives a single fuck about crypto. Die hard crypto natives who’ve shown up daily for years are trading stock shitters and commodities.”

He added that “it literally can’t get any worse for sentiment than right now,” noting that even during the COVID crash bottom, people still believed in the industry.

Sentiment has bottomed out for sure. No one gives a single fuck about crypto. Die hard crypto natives who've shown up daily for years are trading stock shitters and commodities. No one wants to make angel investments in this space, no one believes any of the bullshit narratives..…

— Rex (@R89Capital) January 20, 2026

Another analyst, TheGreekGod11, echoed this frustration, observing that the industry executed “an excellent job at making crypto look like absolute dogshit” by voting in the first pro-crypto president, only to crash the market.

Mike Novogratz also warned that “the gold price is telling us we are losing reserve currency status at an accelerating rate,” adding that “$BTC is disappointing as it is still being met with selling.”

He reiterated that Bitcoin “has to take out 100-103k to regain its upward trend,” though he believes it will happen in time.

Joe Consorti offered a contrarian take, stating, “Bitcoin plummeting on geopolitical escalation, rather than ripping with gold and silver, tells you how early we are. The largest informational asymmetry in markets is still alive and well.“

Bitcoin plummeting on geopolitical escalation, rather than ripping with gold and silver, tells you how early we are.

The largest informational asymmetry in markets is still alive and well.

Mispricing like this is where generational wealth is acquired. pic.twitter.com/KCOSYM9pDD

— Joe Consorti (@JoeConsorti) January 20, 2026

Gold Rally Signals Deeper Structural Shifts

Gold extended its historic rally to $4,874.21, marking a 2.3% gain and continuing a three-session surge that has now pushed the precious metal within reach of $4,900.

According to Economies, Tony Sycamore, market analyst at IG in Sydney, stated that investors’ shedding of dollar-denominated assets reflects “a loss of confidence in the US administration and rising strains in international alliances following Trump’s latest threats.“

Daniel Ghali, senior commodity strategist at TD Securities, also told Bloomberg that the surge is spurring “fear of market-led debasement in the rest of the world,” adding that “gold’s rally is about trust. For now, trust has bent, but hasn’t broken. If it breaks, momentum will persist for longer.”

Goldman Sachs co-head of commodities research Daan Struyven also declared, “Gold remains our highest conviction,” reiterating the bank’s base case scenario of gold rising to $4,900 per ounce, with risks to the upside.

In fact, Benjamin Cowen stated bluntly that “metals outperformed crypto in 2025 and will likely do so again in 2026,” warning that when metals eventually correct, “crypto will likely drop more.“

Metals outperformed crypto in 2025 and will likely do so again in 2026.

Metals will likely have a big correction later this year, but when they do, crypto will likely drop more.

Trade the market you have, not the market you want.

— Benjamin Cowen (@intocryptoverse) January 20, 2026

Institutional Positions Show Mounting Stress

Traditional equity markets suffered parallel damage, with the S&P 500 falling 2.06% and the Nasdaq Composite dropping 2.4% on Tuesday after markets reopened following Monday’s holiday.

Strategy’s Bitcoin holdings came under scrutiny, with analyst Maartunn noting that “40% of Strategy’s Bitcoin supply is currently sitting at a loss,” adding that “pressure’s building.”

40% of Strategy’s Bitcoin supply is currently sitting at a loss 🔻

Pressure’s building. pic.twitter.com/zcSZloNNhr

— Maartunn (@JA_Maartun) January 21, 2026

Analyst CrediBULL Crypto offered cautious optimism, pointing out that “for the first time in 7 months, LTH (long term holders) have shifted from being net sellers to net buyers,” suggesting the reversal may be just around the corner.

However, analyst Ted Pillows warned that “$BTC must hold above the $89,000 level. Losing this zone will end the short-term uptrend.“

$BTC must hold above the $89,000 level.

Losing this zone will end the short-term uptrend. pic.twitter.com/YySxBuqO0K

— Ted (@TedPillows) January 20, 2026

Geopolitical Tensions Drive Safe Haven Rotation

Trump reiterated Tuesday there would be “no retreat” from his goal of controlling Greenland, threatening 10% tariffs on eight European nations beginning February unless they withdraw objections to US annexation.

French President Emmanuel Macron directly rebuked Trump’s tactics at Davos, while the EU prepared emergency countermeasures, including retaliatory tariffs worth €93 billion on US imports.

For now, no known agreement has been reached, as fear remains heightened in the market.

Bitcoin’s collapse alongside traditional risk assets, rather than rallying with gold, exposed the asset’s continued treatment as a speculative asset rather than a proven safe haven during geopolitical crises.