Why Bitcoin Price Struggles Below $90K While Global Markets Hit New Records

The contrast is stark: as gold surged 60% through 2025, silver soared 211%, and the Russell 2000 climbed 45%, Bitcoin finds itself in a precarious position at $89.38K, down 12.42% over the past year. This divergence has spawned a new investment mantra among traders: “Anything But Crypto” (ABC). Yet beneath the surface of Bitcoin’s price stagnation lies a more complex story—one that reveals fundamental shifts in global market structure rather than simple underperformance.

Throughout January 2026, the pattern intensified. While gold and silver struck new highs on January 20th and the Russell 2000 extended its outperformance streak to eleven consecutive days, Bitcoin experienced its sixth consecutive decline, sliding from near $98K to below $90K. For many cryptocurrency investors accustomed to Bitcoin price movements leading broader market trends, this inversion raises uncomfortable questions about what comes next.

Bitcoin Price Action: A Leading Indicator Flashing Red

Bitcoin’s current weakness carries implications far beyond cryptocurrency markets. Raoul Pal, founder of Real Vision, has extensively documented how Bitcoin functions as a leading indicator for global risk assets like the S&P 500. Unlike traditional assets tethered to specific economic reports or interest rates, Bitcoin price performance is driven purely by global dollar liquidity—making it an early warning system for broader market turns.

Historical analysis reveals this pattern consistently. Data from MacroMicro shows Bitcoin price turning points repeatedly preceded those of the S&P 500 over recent years. More troublingly, Bitcoin’s failure to break above $100K despite repeated attempts—itself a stunning reversal from the optimism of late 2025—suggests that the broader risk asset rally may be approaching exhaustion. For investors tracking Bitcoin price history, this stagnation stands in marked contrast to periods of momentum that preceded major rallies across multiple asset classes.

The Liquidity Crisis Constraining Bitcoin Price Gains

While Federal Reserve rate cuts in 2024 and 2025 provided temporary relief, quantitative tightening (QT) initiated in 2022 continues draining liquidity from global markets. Though Bitcoin price rallies were fueled by significant new capital from spot ETFs—BlackRock and other major institutions allocating meaningfully to crypto—this inflow merely masked an underlying liquidity shortage.

The supply-demand equation is deteriorating further from the yen side. The Bank of Japan’s plans to raise its policy rate to 0.75% by December 2025 mark the highest level in nearly 30 years. This tightening directly undermines yen carry trades, historically a crucial funding source for global risk assets. Historical data demonstrates the correlation vividly: each of the Bank of Japan’s three interest rate hikes since 2024 coincided with Bitcoin price declines exceeding 20%.

This synchronized tightening by both the Federal Reserve and Bank of Japan has created an inhospitable environment. Bitcoin price momentum simply cannot build in an environment where global macro liquidity is systematically constrained. The sideways consolidation below $90K reflects this reality: without new fuel, Bitcoin price stagnation may persist.

Geopolitical Uncertainty: The Hidden Weight on Bitcoin Price

Beyond macroeconomics lies a factor often overlooked in Bitcoin price analysis: geopolitical risk. Trump administration actions in early 2026 have introduced unprecedented uncertainty. Internationally, the administration deployed military forces in Venezuela, arrested its president, and brought Iran to the brink of conflict—all while threatening forcible purchases of Greenland and new tariffs against the EU.

Domestically, concerns have escalated regarding potential constitutional crises. Proposals to rename the Defense Department to the “War Department” combined with orders for active duty troop readiness have sparked speculation about whether defeat in midterm elections might be contested militarily. The normalization of this conflict—protests expanding across cities, the Insurrection Act invoked for Minnesota deployments, Pentagon orders positioning 1,500 soldiers in Alaska on standby—creates what strategists term “gray zone” conflict.

For capital markets, traditional hot wars offer relative clarity: paths are established, expectations formed, and monetary easing historically follows to “rescue” assets. Gray zone conflicts offer no such clarity. When capital cannot predict fundamental trajectories, the rational response is to hoard cash and avoid high-volatility assets like Bitcoin. Bitcoin price performance naturally suffers when uncertainty overwhelms conviction, pushing risk-averse capital to the sidelines.

Why Gold and Stocks Defy Fundamentals: The Policy-Driven Rally

The irony of 2025-2026 market dynamics is that rallies in precious metals, U.S. equities, and Chinese stocks have nothing to do with improving macroeconomic fundamentals. Instead, they reflect structural shifts driven by sovereign will and industrial policy competition.

Gold’s surge reflects central banks’ collective response to existential dollar questions. The 2008 financial crisis and Russia’s 2022 frozen reserves destroyed the “risk-free” myth surrounding the dollar and U.S. Treasuries. Global central banks have become “price-insensitive buyers,” accumulating gold not for speculation but as an ultimate store of value independent of any single sovereign. The World Gold Council documents this reality: global central banks’ net gold purchases exceeded 1,000 tons in both 2022 and 2023, setting records. By 2025, total gold reserves surpassed dollar-denominated Treasury holdings among central bank reserves.

Equity rallies similarly reflect strategic policy direction rather than broad-based liquidity. The U.S. “AI nationalization” strategy has elevated artificial intelligence to national security status. Capital visibly flows from large-cap tech toward smaller, growth-oriented stocks aligned with policy—exemplified by Russell 2000’s dramatic outperformance. China’s A-share market shows identical dynamics: the STAR Market 50 rose over 15% in January alone, driven by concentration in “information technology innovation” and “defense and military industry”—sectors aligned with state industrial upgrading.

This policy-driven pricing logic operates on fundamentally different mechanics than Bitcoin price dynamics, which rely purely on market-based liquidity allocation.

Historical Precedent: Bitcoin Price Rebounds Follow Extreme Oversold Conditions

Bitcoin price history offers perspective on current weakness. Four times have Bitcoin’s RSI (Relative Strength Index) relative to gold fallen below 30, indicating extreme oversold conditions: 2015, 2018, 2022, and now 2025. Each instance preceded significant Bitcoin price appreciation.

In 2015, Bitcoin price RSI relative to gold fell below 30 at bear market’s end, triggering the 2016-2017 super bull market. In 2018, Bitcoin fell over 40% while gold rose nearly 6%; after RSI dropped below 30, Bitcoin price rebounded over 770% from 2020 lows. In 2022, Bitcoin fell nearly 60%; after the RSI signal, Bitcoin price recovered and again outperformed gold.

The pattern is now repeating for the fourth time. Gold surged 64% in 2025 while Bitcoin price RSI relative to gold has plummeted into oversold territory. Historical precedent suggests this divergence contains the seeds of its own resolution.

The Risks of “ABC” Strategy: Why Chasing Hot Markets Is Dangerous

The temptation to abandon crypto in favor of Russell 2000 small-caps or AI equities must be resisted. Historically, when small-cap stocks initiate a rally, it often marks the final euphoric stage before liquidity evaporates at bull market’s end. Russell 2000 stocks possess poor profitability fundamentals and extreme sensitivity to interest rates—if Federal Reserve policy disappoints, vulnerabilities expose immediately.

The AI sector’s dynamics are more concerning. Both Deutsche Bank research and Bridgewater’s Ray Dalio flag AI as 2026’s biggest market risk. Valuations for companies like Nvidia and Palantir have reached historical extremes, with skepticism mounting about whether profit growth can justify current multiples. Compounding this risk: AI’s energy consumption could trigger new inflationary pressures, forcing central bank tightening and bursting multiple bubbles simultaneously.

A Bank of America fund manager survey from January reveals the full extent of complacency: global investor optimism sits at its highest since July 2021, growth expectations surge, and cash holdings have collapsed to just 3.2%—the lowest since January 2018. Cash buffers against corrections sit at minimal levels. This backdrop—soaring sovereign assets paired with escalating geopolitical conflict and near-record investor optimism—suggests that Bitcoin price stagnation may represent wisdom rather than weakness.

Bitcoin Price as Strategic Signal: Building Conviction Through Uncertainty

Bitcoin price weakness in early 2026 is not merely underperformance. It represents an early warning signal, a sobering moment when markets price in genuine uncertainty while noise reverberates. For true long-term investors, this is precisely when conviction matters most.

The fourth historic oversold signal in Bitcoin price relative to gold, combined with geopolitical uncertainty constraining risk appetite and policy-driven rallies dominating alternatives, suggests that Bitcoin’s current winter contains seeds of springtime transformation. The question is not whether Bitcoin price will recover—history overwhelmingly suggests it will—but whether investors possess the conviction to hold through the uncomfortable consolidation phase that precedes it.

This is the moment to resist temptation, ignore the “ABC” crowd’s siren song, and recognize that Bitcoin price stagnation may ultimately prove far wiser than the speculative excess flourishing elsewhere in markets.