Bitcoin traded around $88,000 on Monday, recovering slightly from weekend lows but remaining close to its yearly bottom amid broader market uncertainties. Meanwhile, gold and silver pushed to record highs before pulling back, highlighting exhaustion in their surges. Analysts point to risks like a potential U.S. government shutdown as weighing on cryptocurrency sentiment.
Bitcoin's price stabilized near $88,000 on Monday, up marginally from a recent low of $87,700 but down from $90,000 late Friday. The cryptocurrency faced pressure from weekend selling driven by rising odds of a U.S. government shutdown on January 31, which could tighten liquidity and delay key legislation like the Clarity Act.
In contrast, precious metals showed resilience to the same news. Gold climbed above $5,000 and $5,100 for the first time ever on Sunday and Monday, before retreating to $5,043, still up 1.3% for the day. Silver reached $118 before easing to $108, a 7% daily gain. Crypto analyst Will Clemente captured the frustration among bitcoin holders, writing, "Gold and silver casually adding an entire bitcoin market cap in a single day."
The U.S. dollar index fell to its weakest level since September, down over 1% to 154.07 per yen, as the Federal Reserve and Bank of Japan intervened to support the yen. Despite this dollar weakness, bitcoin lacked bullish momentum, leaving traders cautious.
Swissblock analysts noted a bearish outlook, warning that a drop below $84,500 support could lead to a correction toward $74,000, though holding that level might attract buyers if risk cools. Bitfinex echoed this, predicting bitcoin will stay range-bound between $85,000 and $94,500, with options markets reflecting short-term risks rather than long-term volatility.
Persistent outflows from spot bitcoin exchange-traded funds, totaling over $1.3 billion in the past week, underscored waning investor risk appetite. Schwab's Jim Ferraioli highlighted the need for improved on-chain activity, ETF flows, and miner participation for any sustained rally, expecting trading to remain narrow between the low $80,000s and mid-$90,000s until the Clarity Act advances.
