Bitcoin Nears Yearly Low Amid Rising Interest in Precious Metals
Bitcoin Nears Yearly Low as Precious Metals Surge
Bitcoin (BTC) hovered around $88,000 on Monday, reflecting a stabilization near its yearly low. In contrast, gold and silver extended their impressive gains, albeit with some subsequent corrections.
BTC saw a slight rebound from the recent pattern of weekend sell-offs, declining from around $90,000 late Friday. Concerns over a potential government shutdown on Jan. 31, which could affect liquidity, were among the reasons for Sunday's sell-off.
Precious metals, however, remained unaffected by these developments. Gold surged past $5,000, hitting $5,100 for the first time, while silver reached $118. Despite some pullback, with gold at $5,043 and silver at $108, they remain strong performers.
Crypto analyst Will Clemente noted the mood among Bitcoin investors, highlighting the rapid gains in precious metals.
The U.S. dollar index (DXY) weakened to its lowest since September following reported interventions by the U.S. Federal Reserve and the Bank of Japan to support the yen against the dollar. The dollar dropped over 1%, trading at 154.07 yen on Monday.
Bitcoin Likely to Stay Range-Bound
Swissblock analysts cautioned about the lack of bullish momentum in Bitcoin despite a weaker dollar, maintaining a bearish outlook. A breakdown below $84,500 could trigger a deeper correction toward $74,000, though holding this support could present an opportunity for bulls.
Bitfinex analysts shared this cautious sentiment, predicting BTC will stay between $85,000 and $94,500. They noted shifts in the options market, with traders focusing on short-term risks rather than long-term volatility.
Spot Bitcoin ETFs experienced cumulative outflows exceeding $1.3 billion last week, indicating reduced risk appetite among investors.
Potential Government Shutdown Poses Risk to Crypto Legislation
Jim Ferraioli, Schwab's director of crypto research, believes significant movement in Bitcoin prices is unlikely without increased on-chain activity, ETF flows, or changes in derivatives and miner participation. He views the Clarity Act's passage as a major catalyst, but its potential delay due to a government shutdown could keep BTC trading narrowly between the low $80,000s and mid-$90,000s, with institutional investors remaining cautious.