Investor Sentiment Shift Affects Gold and Bitcoin
Gold seems to be losing its appeal with investors, as it reached a significant milestone of $5,500 per ounce on Wednesday for the first time. Meanwhile, Bitcoin dipped below $85,000, marking a notable decline since November.
Lacey Chan, a research analyst at Biget Wallet, pointed out that gold’s recent rise is indicative of a noticeable shift toward traditional safe-haven assets. This move appears to be a response to uncertainties surrounding U.S. policies, geopolitical tensions, and general fiscal instability.
This change in sentiment is evident in JM Bullion’s Gold Fear and Greed Index, which currently sits at 99, indicating “extreme greed.” In contrast, the Cryptocurrency Fear and Greed Index reflects a sense of “fear,” suggesting a stark difference in how investors view these markets.
Experts note that Bitcoin hasn’t been benefiting from the weaker dollar, which is surprising since it typically should. Instead, many investors seem more worried about significant global issues, like Japan’s escalating debt crisis and rising government bond yields. These factors suggest a waning confidence in the stability of government finances worldwide.
Additionally, Bitcoin ETFs are facing challenges, experiencing outflows of $160.1 million just this week. CryptoQuant’s head of research, Julian Moreno, mentioned that since peaking at $72.6 billion on October 10, 2025, Bitcoin ETFs have seen a net outflow of $6.1 billion, reducing their holdings by 8.4% to $66.5 billion. This situation serves as a crucial stress test for these funds.
Moreno shared that if Bitcoin’s price exceeds the ETF’s realized price, it provides a reason to continue investing. However, if it fails to meet this threshold, liquidity risks could shift from passive consolidation to active distribution. Currently, Bitcoin is trading at a pivotal line that’s testing investor confidence in the ETFs.
There are more troubling signs, as reported by CoinDesk, indicating that 63% of Bitcoin investors are currently “underwater,” especially since Bitcoin dropped below the $88,000 level. A further decline below $85,000 could push many investors to sell in order to limit their losses.
On another note, Glassnode reported that long-term holders have seen a reduction in supply by about 144,000 BTC over the last month, marking the fastest sales since August.
Nick Pucklin, co-founder of Coin Bureau, commented on the situation, suggesting that while this downturn doesn’t necessarily signal the end of the bull market, it does indicate the cycle is shifting. He warned that volatility might increase and sustainability could decrease. However, he also noted the changing dynamics in Bitcoin investments as institutional investors begin to embrace it as a legitimate asset. This transition may lead to a gradual shift in ownership from early holders to institutional players.
