A significant $1.8 billion wave of liquidations is affecting Bitcoin traders, while gold hovers near record highs.
Summary
- Gold reaches new heights as Bitcoin experiences $1.8 billion in liquidations.
- Shawn Young, Chief Analyst at MEXC Research, highlights that the recent selloff underscores the inherent fragility of the crypto market.
- In a statement to crypto.news, Young reported that 407,000 traders underwent liquidations as Bitcoin (BTC) dropped below $112,000.
Gold and Bitcoin are displaying contrasting trends once again. While gold achieved a new all-time high of approximately $3,790 per ounce on Sept. 23, Bitcoin has trended downward in the last week.
The situation was exacerbated by a substantial $1.8 billion liquidation wave impacting Bitcoin traders, with $1.65 billion concentrated in long positions. This divergence raises questions regarding Bitcoin’s role as a hedge against macroeconomic risk.
Shawn Young, Chief Analyst at MEXC Research, remarked that the recent selloff is a classic illustration of the structural fragility of crypto markets when leverage accumulates. He noted that 407,000 traders faced liquidations as Bitcoin (BTC) dipped below $112,000.
“The U.S. dollar regained strength after the Fed’s rate cut, catching markets off guard. That stronger dollar, coupled with elevated Treasury yields and impending inflation data, has kept crypto markets on the defensive,” Shawn Young, MEXC Research.
Bitcoin declines, gold flourishes amid macro uncertainty
Nonetheless, gold and Bitcoin diverged in their reactions to the dollar’s strength. Farzam Ehsani, CEO and co-founder of VALR, shared with crypto.news that this is likely due to gold’s more established position as a hedge against geopolitical risks.
When the dollar is strong, Bitcoin often struggles to meet its ‘digital gold’ narrative, Ehsani pointed out. “The stark divergence between gold and Bitcoin reflects changing priorities. Gold has surged due to central bank buying and its established reputation as a geopolitical hedge, while Bitcoin remains in the early phase of institutional adoption.”
Geopolitical tensions have favored gold more in 2025, with the asset rising 42.7% this year, according to StatMuse. In contrast, Bitcoin recorded a return of just 20.7% during the same timeframe, despite significant support from regulatory advancements and institutional uptake.
