Key Notes
- Bitcoin is being compared to gold as both assets recorded massive declines.
- US-based crypto ETFs registered over a billion dollars in cumulative outflows.
- Cryptocurrency liquidations surpassed $1.7 billion amid a market-wide selloff.
Investors are comparing Bitcoin
BTC
$82 131
24h volatility:
6.5%
Market cap:
$1.64 T
Vol. 24h:
$90.41 B
and gold as macro and geopolitical tensions impact both assets, triggering significant liquidations.
Gold recorded an all-time high of $5,608 per ounce on Jan. 29, according to Trading Economics data.
However, the asset, with a market cap of just over $36 trillion, fell by 4.7% over the past day to $5,180.
Macro Pressures Weigh on Bitcoin and Gold
Bitcoin has been on a downward spiral since the US Fed’s interest rate decision, which remained unchanged on Jan. 28.
The leading cryptocurrency fell 6.25% in 24 hours and is trading at $82,600 at the time of writing.
Since the Fed signaled no urgency for cutting the interest rates, risk assets like cryptocurrencies tend to lose appeal when investors can earn safe returns elsewhere. In this case, cash, bonds, and money-market funds become more attractive.
Negative sentiment over US tariffs on the EU also adds to the pressure
In addition to the macro pressure from the US, the geopolitical tensions between the US and Iran have also been acting as a major catalyst for selling risk assets.
Investors are now drawing comparisons between Bitcoin and gold.
According to the Santiment analysis, investors are unsure whether Bitcoin should be seen as digital gold, a long-term store of value, or simply a risky investment.
These discussions look at how Bitcoin behaves in the market, how it moves with or against gold, and whether its main use is everyday payments or holding it over time.
Crypto Market Sees $1.7B Liquidated as 275K Traders Affected
The macro pressure brought the crypto market significantly down again. The global crypto market capitalization decreased by 5.9% to $2.8 trillion in 24 hours, with a $220 billion selloff.
On Jan. 29, Bitcoin alone lost $85 billion of its value in just four hours. The market sentiment fell back into the fear zone, CMC data shows.
With the latest decline, total crypto liquidations rose 385% to $1.71 billion in just 24 hours, including $1.59 billion in long positions and $117 million in shorts, according to Coinglass data.
Data shows that just over 275,300 traders have been affected by the latest liquidations, with the largest wiped out position valued at $80.5 million in the BTC/USDT pair on the HTX crypto exchange.
When long liquidations dominate the market, the investor sentiment turns to fear, uncertainty and doubt, triggering further selloffs.
US-based spot BTC exchange-traded funds also recorded a net outflow of $817.9 million, according to SoSoValue data.
Spot Ethereum ETFs registered a $155.6 million selloff, and investment products connected to XRP
XRP
$1.74
24h volatility:
7.2%
Market cap:
$105.81 B
Vol. 24h:
$5.22 B
saw a $92.9 million outflow.
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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Wahid has been analyzing and reporting on the latest trends in the decentralized ecosystem since 2019. He has over 4,000 articles to his name and his work has been featured on some of the leading outlets including Yahoo Finance, Investing.com, Cointelegraph, and Benzinga. Other than reporting, Wahid likes to connect the dots between DeFi and macro on his newsletter, On-chain Monk.
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Source: https://www.coinspeaker.com/crypto-selloff-explained-bitcoin-vs-gold-and-275k-traders-affected/
