Why Bitcoin is down while gold rallies on a weaker dollar

Gold and other traditional safe-haven assets are surging amid a softening US dollar, yet Bitcoin continues to falter.

This week, gold pushed past the $5,000 mark, setting fresh all-time highs and building on its strong momentum. Silver also joined the rally, climbing above $120 per ounce.

However, and in stark contrast, Bitcoin continued to struggle.

A fleeting recovery attempt to above $90,000 on Wednesday quickly faded into renewed downside pressure that currently sees BTC poised below $88,000.

Why Bitcoin is struggling despite dollar weakness

According to an analysis from J.P. Morgan Private Bank, current dollar weakness hasn’t ignited Bitcoin’s typical upward response due to one key factor: investor outlook.

In a note to CoinDesk, the analysts said markets appear to currently view Bitcoin more as a high-risk asset tied to liquidity conditions, rather than a reliable hedge against currency weakness.

Notably, gold has exploded as the Dollar Index (DXY), which tracks the greenback against major global currencies, has fallen.

But Bitcoin, often seen as a beneficiary of such weakness in historical dollar patterns, has underperformed.

The benchmark digital asset is well off its all-time high reached in October 2025.

Strategists at the bank attribute this divergence to the nature of the dollar’s slide.

Unlike past episodes driven by fundamental changes in economic growth or central bank policies, the recent drop stems largely from short-term investor flows and shifting market sentiment.

While gold and similar commodities have capitalized on the dollar’s dip as classic hedges, Bitcoin has stayed confined to a tight trading range.

Per the researchers, this behavior signals that cryptocurrency traders aren’t interpreting the dollar’s softness as a lasting macroeconomic pivot.

Instead, Bitcoin remains anchored as a liquidity-dependent risk asset.

This, and the prevailing macroeconomic environment, continue to hinder fresh inflows.

Bitcoin price forecast

The price of Bitcoin has fluctuated below $90,000 after a brief uptick earlier this month. While the sharp contrast to gold’s gains has helped pull capital away, analysts are largely bullish.

André Dragosch, Bitwise European Head of Research, recently noted that BTC’s drop to a multi-year low, with the Bitcoin-to-gold ratio of 18.5 oz/BTC, is a “very rare” contrarian buy signal.

He suggested capital rotation from gold to BTC could accelerate in the next few months.

GugaOnChain, a CryptoQuant contributor, shared in a Jan 26 post that dollar weakness only boosts BTC in risk-on environments like high inflation or loose liquidity.

The contrary is likely in a risk-off environment punctuated by extreme fear.

In this case, investors flock to gold for capital preservation. BTC will thrive as risk appetite shifts.

The coin traded around $87,800 at the time of writing on Thursday, Jan.29.

In the short term, Bitcoin bulls want to see a decisive push above $100,000. Movement in this area will signal renewed strength.

On the downside, key support levels cluster around $85,000, with $80,000 a major accumulation zone if bears strengthen.

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