Bitcoin and other major digital assets surged significantly this week, defying a sharp downturn in traditional safe-haven precious metals, as global markets reacted to renewed U.S.-China trade optimism.
Bitcoin’s price eclipsed $113,000 on Tuesday, reaching a local high of $113,800, a notable recovery after trading below $105,000 just days earlier. Ethereum, the second-largest cryptocurrency, also showed strength, moving above $4,080 to reach $4,090.
Other cryptocurrencies like Solana and Bitcoin Cash recorded gains between 4% and 6.6%, contributing to an overall rise. The total cryptocurrency market capitalization increased by 2.6%, nearing $3.93 trillion.
This cryptocurrency rally contrasted sharply with the performance of precious metals. Gold suffered a 5% decline to $4,130, its most significant daily drop in years, while silver prices fell by almost 8%.
The shift in market sentiment followed comments from former U.S. President Donald Trump, who on Monday expressed optimism for a trade agreement with China by the end of the month. “I think we are going to end up having a fantastic trade deal with China,” he told reporters at the White House.
This statement, easing earlier pressures from ongoing tariff threats, is believed to have injected relief into financial markets. It contributed to Bitcoin’s rally and a broader re-evaluation of risk assets.
The unexpected price surge on Tuesday severely impacted bearish positions in the crypto derivatives market. Short liquidations reached $280 million within 24 hours.
In total, $536.02 million in both short and long positions were liquidated, affecting 137,383 traders, according to data from Coinglass.
Precious metals had previously gained ground in recent months, boosted by signals of potential monetary easing from the U.S. Federal Reserve, U.S.-China trade tensions, and signs of credit stress. Gold is now down almost 6% from its last historic high.
Analysts suggest gold may be forming a “double top” bearish pattern, with Forex.com’s James Stanley warning of a risk for gold to fall below $4,000. Such a scenario could further benefit riskier assets like Bitcoin.
Quinn Thomson of Lekker Capital noted that Bitcoin is poised to replicate gold’s previous rally. Charlie Morris of ByteTree argued that Bitcoin’s moment often arrives when gold consolidates.
Despite the recent gains, spot Bitcoin exchange-traded funds (ETFs) showed a reduced appetite for risk last week. They recorded their largest historical weekly outflow, totaling $1.23 billion.
This trend of capital outflow continued on Monday, with another $40.47 million withdrawn, according to data compiled by SoSoValue.
On the technical front, analyst Rekt Capital stated on X that Bitcoin faces resistance at its 21-week Exponential Moving Average. It needs to maintain historical demand areas as support to establish a higher low.