Bitcoin drops to $86K before rebounding as macro risk intensifies
Bitcoin slips behind other risk assets as gold breaks $5K, silver tops $100, and markets brace for the Fed, tech earnings, and shutdown risk.
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Bitcoin is starting the year on the back foot. As global markets react to renewed US-Canada trade tensions, a strengthening yen as the carry trade unwinds, and rising US government shutdown risk, crypto continues to lag other risk assets. While Bitcoin briefly dipped to $86K over the weekend before rebounding, it remains unable to reclaim momentum as capital rotates elsewhere.
That rotation is clear across markets. Gold has surged past $5,000, silver has broken above $100, and defensive positioning is spreading into currencies and rates. With a packed week ahead that includes a Federal Reserve decision, major tech earnings, and rising shutdown risk in Washington, Bitcoin enters another macro heavy test.
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Bitcoin underperforms as metals surge and macro risk builds
Bitcoin fell to around $86,000 on Sunday before recovering toward $90K, continuing a pattern of sharp downside reactions followed by muted rebounds. The move came as geopolitical tensions intensified, including renewed trade threats involving the US and Canada after Prime Minister Mark Carney said Ottawa has no intention of pursuing a free trade deal with China. President Donald Trump has threatened punitive tariffs on Canadian exports if such a deal were to materialize.
Currency markets added to the pressure. The Japanese yen strengthened more than 1.4% against the dollar after Prime Minister Sanae Takaichi said Japan would act against speculative currency moves. Traders also pointed to a recent rate check by the Federal Reserve Bank of New York as a possible signal of coordination with Japan, fueling an unwind of the yen carry trade and pushing investors away from risk assets like crypto.
Gold breaks $5K, silver tops $100 as markets brace for Fed and earnings
Safe haven demand continues to favor precious metals. Gold surged past $5,000 per ounce for the first time, reaching near $5,100, while silver pushed above $100 and is now trading around $112. The rally underscores growing concern around global growth and trade stability as investors seek traditional hedges.
The week ahead is crowded with catalysts. The Federal Reserve is expected to hold rates steady, with markets pricing a roughly 97% probability of no change and expectations for only two cuts this year. Traders will watch Chair Jerome Powell closely for comments on political pressure and leadership transition rumors. Major earnings from Microsoft, Meta, Tesla, and Apple are also due, while prediction markets now place the odds of a partial US government shutdown above 80% as lawmakers clash over Department of Homeland Security funding.
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