Why Are Gold and Bitcoin Seeing Massive Losses Right Now?

Gold and Bitcoin are both experiencing significant declines, reflecting shifts in investor sentiment. Gold prices fell by more than 7% on Friday and reached a level of less than 5,000 per ounce. Bitcoin price had fallen to under $82,000

These losses are made at a time when the U.S. Federal Reserve leadership is uncertain, world politics are tense, and the market conditions are unpredictable. The two assets, which can be termed safe-haven investments, are failing, showing investor panic.

Why Gold and Bitcoin Are Crashing Today

Several factors are contributing to the decline in both Gold and Bitcoin prices. The reinforced U.S. dollar is among the key motivating factors. There are also concerns raised because of speculation on the selection of a new Federal Reserve Chair.

The fact that President Trump potentially nominated Kevin Warsh as the next Fed chair has led to uncertainty. The direction that the Fed will take in future is unfamiliar to investors, especially on interest rates and liquidity.

This has created a risk-off mood that is pushing investors out of riskier assets such as Bitcoin and gold.

In addition, increasing geopolitical tensions, especially between the U.S and Iran, have heightened concerns. Market volatility has been increased by these global uncertainties. Investors are growing more reserved, and they are opting to sell their holdings in both Bitcoin and precious metals.

The relationship between gold and Bitcoin has become clear, as both commodities have suffered massive losses.

The crypto outflow has seen a strong outflow recently, with spot Bitcoin ETFs amounting to over 978 million. This is a week following outflows in these funds. On Thursday, the outflow was an all-time high of 817.87 million, the highest amount of daily withdrawal since November 21.

This trend aligns with a more general risk-off disposition in the market, with more than 2 billion liquidated in the crypto space. The movement shows the increase in the caution of investors.

Gold Price Struggles Amid Profit-Taking

Gold prices saw a significant drop after reaching record highs earlier this week. The price of gold had shot to well over 5600 per ounce, with a year-to-date rise of 20%. At these high prices, however, investors started to lock in returns.

This take of profits led to a sharp fall of about half a thousand dollars an ounce. The plummeting decline is an indication of changing market trends and sentiment by investors.

Gold was taken by several investors as an instrument to hedge the financial uncertainty. But now, its price is fluctuating drastically due to market volatility. Shareholders are still waiting to get a better indication on the monetary policy of the U.S before they can make their next move.

Why Cathie Wood Believes Gold Price Could Decline Soon

Cathie Wood predicts the decline of gold prices. She mentioned that the amount of capitalization on the gold market as a percentage of the money supply in the US (M2) is at an all-time high.

The present levels are higher than those of 1980 that was characterized by the peaked inflation and interest rates in the mid-teens. The increase is alarming because it has led to apprehension regarding the possibility of changes in the market.

Bitcoin Price Outlook: Could BTC Drop to $75K?

Bitcoin price has experienced a sharp correction, trading below the $82,000 mark. After a brief recovery, Bitcoin struggled to break the $90,000 level. It failed to maintain momentum and saw continued losses throughout the week. 

Bitcoin reported a close of 5% weekly downside as of Friday. The wider cryptocurrency market has suffered declines, with altcoins such as Ethereum, XRP, and Solana experiencing big drops.

If the long-term BTC projection maintains its support at $80,000, it may recover to $85,000-$87,000. But once this level is broken, the price of Bitcoin may plummet to a new low of around $75,000. Bitcoin will be crucial in the next few days because it is confronting a volatile market.