Bitcoin Hovers Near $89K as Gold Hits Record High in Broad Risk-On Rally

Gold surged past $4,380 to an all-time high on Fed rate cut hopes, lifting global markets. Bitcoin steadied near $88,800, but analysts warn thin liquidity could cap gains.

Bitcoin held steady near $88,800 on Monday as gold surged to a new all-time high, fueling a broader risk-on rally that lifted Asian equities and signaled growing investor confidence.

The move in digital assets followed a turbulent period that saw more than $576 million in leveraged crypto positions liquidated. Ether, the second-largest cryptocurrency, reclaimed the $3,000 level, while other major tokens like XRP, Solana, and Dogecoin also edged higher.

This renewed appetite for risk assets appears driven by macroeconomic shifts. Gold prices pushed past $4,380 an ounce to a record, propelled by rising expectations of Federal Reserve rate cuts in 2026 and persistent geopolitical tensions. The precious metal is on track for its best year since 1979, supported by heavy central-bank buying.

In equities, the MSCI Asia Pacific Index climbed more than 1%, led by technology shares, as a rebound in U.S. markets last week helped calm global sentiment.

While crypto is drafting off this positive macro backdrop, its internal dynamics present a mixed picture. According to K33 Research, there's a structural shift underway. The data shows long-term bitcoin holders are nearing the end of an extended selling phase, while institutional buyers like ETFs are now absorbing bitcoin faster than miners can produce it.

Market HeadwindsDespite the bullish long-term signals, traders remain cautious. Analysts warn that thin year-end liquidity and lingering high leverage could cap any significant rally, making the market susceptible to sharp reversals.

Crypto markets are currently caught between two powerful forces: the tailwind from expected Fed easing and safe-haven demand, and the headwind from a fragile market structure still recovering from a deep fourth-quarter drawdown.

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