#Gate广场创作者新春激励 Cryptocurrency Continues to Decline: Why Is "Digital Gold" Struggling to Reach New Highs?

Since the beginning of 2026, the overall crypto market has shown a restorative upward trend, with Bitcoin approaching $98,000 last week. However, this week’s rebound in crypto assets has been halted and reversed, and Bitcoin, known as "Digital Gold," has not continued to rise like precious metals such as gold and silver. On the morning of January 21, Bitcoin was at $88,300, down 4.66% in 24 hours. Ethereum plunged 7.98%. As of 10:50 PM on January 21, Bitcoin was at $88,900, down 1.18% in 24 hours; Ethereum was at $2,979.77, down 2.23% in 24 hours.

Industry experts believe that although Bitcoin is called "Digital Gold," it remains a high-beta risk asset rather than a pure safe-haven tool. Currently, cryptocurrencies led by Bitcoin are in a dollar liquidity-driven cycle and cannot stand alone.

The core factor behind this decline remains external macroeconomic shocks. After a series of declines in crypto assets last week, the overall cryptocurrency market experienced a comprehensive rally, with a total market cap exceeding $3.2 trillion. Bitcoin broke through $97,000, briefly touching the key resistance zone of the daily MA100 and EMA120. This was the first time since November 2025 that Bitcoin returned to this important daily moving average zone. However, this restorative rally did not last, and crypto assets declined again this week.

On the morning of January 21, Bitcoin was at $88,300, down 4.66% in 24 hours. Ethereum fell 7.98%, BNB dropped 6.65%, Solana declined 5.80%, and XRP and ADA also fell more than 4%. As of 10:50 PM on January 21, Bitcoin was at $88,900, down 1.18% in 24 hours; Ethereum was at $2,979.77, down 2.23%.

Ding Yuan, director of Xinhuo Research Institute, told reporters that the escalation of the US-EU tariff war triggered by Greenland's sovereignty issue caused the US to suffer a "triple kill" of stocks, bonds, and currencies on January 20, with the Dow Jones down 1.76%, the S&P 500 down 2.06%, and the Nasdaq down 2.39%. European stock markets also opened lower across the board. Meanwhile, the US 10-year Treasury yield rose 1.61%, and the US dollar index fell below 99. Given that cryptocurrencies led by Bitcoin are currently in a dollar liquidity-driven cycle, they are difficult to be independent.

Senior researcher Zhao Wei of OK Research Institute told reporters that the rebound in crypto assets this week was hindered and reversed mainly due to a phase adjustment. After a previous round of policy and institutional positive signals, the crypto market entered a relatively stable digestion phase. Market reactions to short-term positive news have become more rational, and when new narratives and variables emerge, prices tend to reflect digestion and consolidation of previous gains. Bitcoin has experienced significant gains over the past year and has been trading in a high range for a long time, so some short-term and trend-following funds are temporarily on the sidelines, leading to a phase convergence of market liquidity. In this context, price sensitivity to capital changes increases, and pullbacks and oscillations are normal at this stage. From a longer-term perspective, this low-volatility consolidation after a sharp rise actually helps facilitate turnover and solidify the chip structure, laying a foundation for future trends.

"In fact, Bitcoin's rise since the beginning of the year has mainly benefited from the improvement of the overall macro environment in the US, including a more dovish Federal Reserve Chair and the Fed's RMP plan (a reserve management plan purchasing $40 billion of short-term Treasury bonds monthly), which further eased the liquidity tensions that were very tight at the end of last year. The macro expectations' early move triggered this rebound," said senior researcher Sun Wei. He pointed out that the core factor behind this decline remains external macro shocks. Another potential negative sentiment on the emotional level is the US CLARITY Act (the '2025 Digital Asset Market Clarity Act'), which faces internal disagreements and slow progress, making it difficult to form clear policy expectations in the short term, further suppressing market risk appetite.

"Digital Gold" Under Pressure
Since 2025, gold and silver have performed strongly, marking a typical "precious metals boom year." In contrast, Bitcoin, known as "Digital Gold," has experienced a significant rise earlier and is now mostly in a phase of market digestion and re-pricing. Meanwhile, as ETFs, custody, and compliance systems are gradually improved, Bitcoin is being more deeply integrated into the traditional financial system, and its valuation logic is gradually aligning with standardized financial assets. Zhao Wei said that in the absence of new mainstream narratives and demand in the crypto industry, Bitcoin's short-term volatility mainly reflects institutional funds adjusting positions based on risk assessments rather than emotional safe-haven or chasing rallies. Under the current risk appetite that has not fully recovered, its price tends to operate in a stable manner.

Overall, this post-rally consolidation more reflects the current crypto market's focus on stock-to-stock capital game and a relatively restrained rhythm. Although Bitcoin is called "Digital Gold," it also exhibits high volatility similar to Nasdaq growth stocks because the main buying interest at this stage still comes from institutional funds, which include a large amount of leveraged basis and arbitrage strategies," Sun Wei pointed out. Under this structure, Bitcoin's pricing is inevitably constrained by the cost of dollar financing and global liquidity conditions. When long-term interest rates rise, dollar financing costs increase, and bond market volatility intensifies, gold can continue to passively absorb funds as a safe-haven asset, while Bitcoin is more susceptible to de-leveraging and rising capital costs.

Ding Yuan believes that although Bitcoin has the "Digital Gold" narrative, it is still regarded as a high-beta risk asset rather than a pure safe-haven tool. Currently, it relies more on institutional capital inflows (ETF net inflows), liquidity expansion (Fed rate cut expectations), and crypto-specific narratives (regulatory clarity, strategic reserves). The current US Federal Reserve maintaining the benchmark rate, the Bank of Japan's tightening policies, the US government shutdown negotiations, and the delay of the CLARITY Act are all suppressing liquidity, making it difficult for Bitcoin to reach new highs.