"History repeats itself" Why is Bitcoin now facing its greatest opportunity?

The cryptocurrency market and the rest of the world’s markets are showing contrasting situations like ice and fire. There are even jokes among investors that “if you don’t invest in Crypto, everything else makes money.” However, recalling the market’s fundamental rule that history repeats itself, this divergence may just be a temporary illusion.

Throughout 2025, gold rose over 60%, and silver surged 210.9%. The US stock Russell 2000 index increased by 12.8%. Meanwhile, Bitcoin recorded a temporary new high but closed the year with a bearish candle on the chart. In just one month at the beginning of 2026, this divergence has deepened further.

The Paradox of “Anything But Crypto” - Deciphering Asset Divergence in 2025

On January 20, gold and silver consecutively hit new highs, and the Russell 2000 outperformed the S&P 500 for 11 days in a row. The China A-shares STAR 50 index rose over 15% in a single month. In contrast, Bitcoin plummeted from $98,000 with six consecutive down days on January 21. Currently, BTC is down to $87,930 (as of January 26, 2026), a 1.23% decrease in 24 hours.

Funds seem to have completely severed ties with the cryptocurrency market since October 11 of last year. BTC has been sideways below $100,000 for over three months, entering a period of “the lowest volatility in history.” Disappointment has spread among crypto investors, and those who profited in other markets by distancing themselves from Crypto share the “secret” — “Anything But Crypto.” In other words, as long as you don’t invest in Crypto, everything else makes money.

The “Mass Adoption” that everyone expected in the previous cycle seems to have arrived. However, it was not the widespread adoption of decentralized applications that everyone desired, but rather a thorough “assetization” led by Wall Street. In this cycle, the established US forces and Wall Street are accepting Crypto to an unprecedented degree. The SEC has approved spot ETFs, BlackRock and JP Morgan are allocating assets to Ethereum, the US is including Bitcoin in its strategic reserves, and multiple state pension funds are investing in Bitcoin. Yet, the price performance remains disappointing.

Why BTC Continues to Be Sold - The Triple Burden of Liquidity, Leading Indicators, and Geopolitics

Bitcoin as a Failing Leading Indicator

Bitcoin is the “leading indicator” of global risk assets. As repeatedly pointed out by Real Vision founder Raul Pal, Bitcoin’s price is driven purely by global liquidity and is not directly affected by specific countries’ earnings reports or interest rates. Therefore, its fluctuations tend to precede mainstream risk assets like the Nasdaq index.

According to MacroMicro data, Bitcoin’s turning points over the past few years have led the S&P 500 several times. However, the momentum of Bitcoin’s rise, which should serve as a leading indicator, is now stagnating and unable to reach new highs. This is a strong warning signal, suggesting that the upward momentum of other assets may also be nearing exhaustion.

Rapid Contraction of Global Liquidity

Bitcoin’s price correlates highly with the world’s net dollar liquidity. Although the Fed cut rates in 2024 and 2025, the quantitative tightening (QT) that began in 2022 continues to drain liquidity from the market.

The reason Bitcoin hit new highs in 2025 was mainly due to new capital inflows from ETF approvals, but this did not change the macro structural liquidity crunch. Bitcoin’s sideways movement is a direct response to this macro reality. In an environment of capital scarcity, it is difficult to trigger a super cycle.

Additionally, Japan’s tightening of the yen, the world’s second-largest liquidity provider, has begun. The Bank of Japan raised short-term policy rates to 0.75% in December 2025, the highest in about 30 years. This directly impacts the yen carry trade, a major source of global risk asset funding over the past decades.

Historical data shows that since 2024, each of the three rate hikes by the Bank of Japan has been accompanied by Bitcoin falling more than 20%. Simultaneous tightening by the Fed and BOJ worsens the global liquidity environment.

Geopolitical Uncertainty Paralyzes Capital

Finally, potential “black swan” geopolitical events continue to keep markets tense. Actions early in Trump’s administration pushed this uncertainty to new heights. Internationally, conflicts are on the brink—military intervention in Venezuela, potential war with Iran, Greenland acquisitions, and new tariffs threats against the EU—all these radical unilateral actions intensify contradictions among major powers.

Within the US, military preparations are underway, including proposals to rename the Department of Defense as the “Department of War.” Such localized conflicts carry extreme uncertainty and are filled with “unknown unknowns.”

For risk capital markets that rely heavily on stable predictability, this uncertainty is fatal. When large capital cannot determine future directions, the most rational choice is to increase cash holdings, exit the market, and wait-and-see, rather than allocate funds to high-risk, high-volatility assets.

Why Gold and Stocks Continue to Rise - Sovereign Asset Strategies

Contrasting with the quieting of the crypto market, since 2025, markets such as precious metals, US stocks, and China A-shares have risen one after another. However, these gains are not due to overall macro or liquidity fundamentals improving but are driven by structural markets influenced by the will and industrial policies of sovereign states amid geopolitical maneuvering.

Gold’s rise reflects the response of sovereign states to the current international order. Its roots lie in cracks in the dollar system’s credibility. The 2008 global financial crisis and Russia’s 2022 foreign reserve freezes shattered the myth of the dollar and US Treasuries as “risk-free” ultimate reserves. Against this backdrop, central banks worldwide have become “price-insensitive buyers.”

According to the World Gold Council, in 2022 and 2023, global central banks’ net gold purchases exceeded 1,000 tons for two consecutive years, setting a record. The main driver of this gold rally is official power, not market-driven speculative forces.

The rise in stock markets is a manifestation of national industrial policies. Whether it’s the US “AI national strategy” or China’s “industrial autonomy,” both involve deep government intervention and leadership in capital flows. For example, in the US, the “CHIPS and Science Act” has elevated the AI industry to a strategic level of national security.

In China’s A-share market, funds are highly concentrated in sectors closely related to national security and industrial upgrading, such as “Xinxin (Information Technology Innovation Industry)” and “Defense and Military.” The price formation logic of such government-led markets is fundamentally different from Bitcoin, which relies solely on market-driven liquidity.

Does History Really Repeat? - The RSI Indicator’s Fourth Signal

Historically, Bitcoin’s divergence from other assets is not unique. Each time, this divergence has ended with a strong rebound in Bitcoin.

The extreme oversold condition indicated by the RSI (Relative Strength Index) of Bitcoin versus gold falling below 30 has occurred four times: in 2015, 2018, 2022, and from late 2025 to now. The market’s law that “history repeats itself” is functioning here as well.

In 2015, at the end of a bear market, immediately after Bitcoin vs gold RSI dipped below 30, the super cycle of 2016-2017 began. In 2018, during a bear market, Bitcoin fell over 40%, while gold rose about 6%. After RSI dropped below 30, Bitcoin rebounded over 770% from its 2020 lows.

In 2022, during a bear market, Bitcoin declined about 60%. After RSI dipped below 30, Bitcoin rebounded and again outperformed gold.

Now, from late 2025 to the present, we are witnessing the fourth occurrence of this historic oversold signal. Gold skyrocketed 64% in 2025, while BTC price fell 5.14% over seven days. The Bitcoin-to-gold RSI has fallen back into the oversold zone. If history repeats, a reversal is likely imminent.

Towards the Next Bull Market - Why You Should Not “Chase Other Assets” Now

Amid the chaos of “ABC,” impulsively selling crypto assets and chasing other markets that seem to be doing better could be a dangerous decision.

Historically, small-cap US stocks tend to lead the late-stage liquidity crunch of a bull market. The Russell 2000 has already risen over 45% from its 2025 lows, but many of its constituent companies have relatively low earnings power and are highly sensitive to interest rate changes. If the Fed’s monetary policy disappoints, these vulnerabilities will quickly surface.

Next, the frenzy around AI shows typical bubble characteristics. Whether it’s Deutsche Bank’s research or Ray Dalio’s warning from Bridgewater Associates, both cite the AI bubble as the biggest risk in the 2026 market. Valuations of star companies like NVIDIA and Palantir are at historic highs, raising doubts about whether their profit growth can sustain such valuations.

A January survey by Bank of America fund managers shows that investor optimism is at its highest since July 2021. Cash holdings are at a record low of 3.2%, and hedges against market correction are at their lowest since January 2018.

On one side, there is frenzied growth of sovereign assets and optimistic investor sentiment. On the other, escalating geopolitical conflicts. In this macro context, Bitcoin’s “stagnation” is not just “underperforming the market average.” It is more like an early warning signal of larger future risks, and a moment of gathering strength for a grand narrative shift.

History repeats itself. Panicking and chasing other assets now means ignoring patterns and losing sight of the market’s fundamental cycles. For true long-term believers, this “winter” of Bitcoin is ultimately a countdown to the “spring.”