While Bitcoin attempts to keep its head above $88,000, the anticipated decline has temporarily halted. The enthusiasm exhibited by cryptocurrency enthusiasts during the 2021 bull market is now paralleled by those investing in commodities. Although Bitcoin’s climb was expected due to limited supply, liquidity is swaying towards metals rather than digital currencies.
What’s Fueling the Commodities Boom?
Gold is on the verge of securing its largest monthly increase since 1999. Silver and palladium are achieving new milestones, with it being palladium’s biggest gain since 2008. Tin has risen significantly by 33% this month alone. Other commodities like natural gas have attained their highest points in three years, and metals such as copper and aluminium are also touching significant highs.
How is Bitcoin Reacting?
Gold’s ascent, nearly 18% in a month, doubles the value increase Bitcoin achieved in just 26 days of 2026. This contrasts starkly with the S&P 500’s relatively flat performance over the last three months, and Bitcoin’s stagnation within a narrow range over two months.
Quietly, Bitcoin’s leverage ratios are on the decline. Following the introduction of ETFs, the change in open futures positions over 60 days is making lower peaks, showing a waning speculative frenzy. It’s uncertain if this indicates further downturns, but a reversal might end this period of inactivity if spot prices rise.
Swissblock’s insights on the Bitcoin risk index propose alternative paths for investors.
“Recent price shifts have intensified the downward movement. As Bitcoin loses its pivotal support at $89,200, the risk index climbs, broadening the bearish outlook. Nevertheless, key defenses are being maintained by bulls around the $84,500 mark, serving as the nearest pullback target.”
Bull Scenario: If the $84,500 support endures and the Risk Index stabilizes, it could offer a valuable entry point for long positions.
Bear Scenario: Dropping and holding below $84,500 could lead to sharper corrections, aiming for new lows beneath those seen in November, with $74,000 as a primary target.”
While commodities experience historic gains, Bitcoin remains locked in a struggle to defend its value, facing pressure from both speculative and market forces. Its path forward remains precariously balanced between bearish and bullish scenarios. The coming months could potentially define its trajectory amid the volatile landscape.
