TrumpMarketsBitcoin
|5 min ReadBitcoin Bleeds as Trump Chaos Fuels
Jax Morales
Senior Analyst
Published
Jan 21, 2026
The 2026 trading year has birthed a brutal new strategy: ABC (Anything But Crypto). While Gold (+60% YoY) and Silver (+210%) shatter records, and the Russell 2000 outperforms the S&P 500 for 11 straight days, Bitcoin has erased gains, sliding under $90,000 with six consecutive daily red candles as of Jan 21.
Despite institutional adoption—ETFs, BlackRock, and sovereign reserve talks—liquidity has vanished. The market has shifted from "Mass Adoption" to Wall Street "Assetization," yet price action remains decoupled from the broader risk-on rally.
The Macro Drain: Fed & BoJ
Bitcoin is the canary in the coal mine. Real Vision's Raoul Pal notes BTC serves as the purest liquidity gauge. Its current weakness signals that global net liquidity is tighter than stock markets admit.
QT Continues: The Fed is still pulling liquidity.
The Yen Shock: The Bank of Japan hiked rates to 0.75% (a 30-year high) in Dec 2025. This crushes the carry trade. History shows every BoJ hike in 2024 triggered a 20%+ BTC correction.
The Trump Factor: "Unknown Unknowns"
Why isn't capital flowing into crypto despite the inflation hedge narrative? Geopolitical panic. The Trump administration's erratic 2026 start has pushed uncertainty to maximum levels:
Foreign Policy: Military intervention in Venezuela (arresting the President) and renewed tensions with Iran and the EU.
Domestic Crisis: Proposals to rename the Dept of Defense to the "Department of War" and deploying 1,500 active-duty troops to Alaska/Minnesota for potential domestic unrest.
Investors hate uncertainty. The "Trump Risk" has forced capital into "Sovereign Safety" (Gold) or "State-Sponsored Tech" (AI/Defense stocks), leaving purely free-market assets like Bitcoin in the cold.
The Sovereign Bid vs. The Market Bid
The rally in other assets is manufactured by policy, not organic demand:
Gold: Central Banks bought >1,000 tons/year to de-dollarize.
Equities: Driven by US "AI Nationalization" and China's "Industrial Autonomy."
Bitcoin lacks a state sponsor. It is the only asset pricing in the real liquidity conditions without a government safety net.
The RSI Bottom Signal
Contrarians, take note: The BTC/Gold RSI has collapsed below 30. This extreme oversold signal has only flashed three times before:
2015: Pre-bull run.
2018: The bottom before a 770% rally.
2022: The cycle low.
The ratio suggests Gold is overcrowded and Bitcoin is mathematically mispriced relative to hard assets.
The Liquidity Trap
Chasing the ABC trade now is dangerous. Bank of America surveys show global cash levels at 3.2%, the lowest since 2018. The crowd is fully allocated. Meanwhile, Nvidia and Palantir valuations are stretched, with Bridgewater's Dalio warning of an AI bubble burst in 2026.
Bitcoin’s stagnation is a feature, not a bug—it is front-running the liquidity crisis that the stock market hasn't priced in yet.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.