The post Liquidity Rotation Explains Bitcoin’s Pause as Gold and Silver Surge appeared on BitcoinEthereumNews.com.

TLDR: Capital typically flows into gold and silver first during early liquidity expansion phases Bitcoin consolidation often follows major liquidation events and leverage resets Historical cycles show Bitcoin rallies after metals pause and risk appetite improves Structural changes and policy support may amplify Bitcoin’s delayed market response Why Bitcoin lags while metals explode frames the current divergence between digital assets and precious metals as a function of liquidity sequencing.  Bitcoin trades about 30% below its peak, while gold and silver approach record levels. Market participants are assessing whether this reflects weakness or timing.  Historical cycles suggest capital rarely moves uniformly across asset classes. Instead, liquidity often settles into defensive instruments before rotating toward higher-volatility markets, shaping the present market structure. Precious Metals Absorb Liquidity Before Risk Assets Early-stage liquidity expansions often favor assets with long-standing monetary credibility. Gold and silver typically attract capital seeking protection against macro uncertainty. This behavior was visible after the March 2020 market shock. Bull Theory recently referenced that period, noting that aggressive Federal Reserve actions restored confidence.  Precious metals responded rapidly, while Bitcoin remained range-bound. The delay reflected capital prioritization rather than diminished interest in digital assets. WHY IS BITCOIN DOWN -30% FROM ITS PEAK WHILE GOLD AND SILVER ARE GOING PARABOLIC? Because Gold and Silver tops first, then Bitcoin starts its rally. Here is what happened last time After the March 2020 crash, the Fed injected massive liquidity into the system. The first… pic.twitter.com/3Wvhd5lz3V — Bull Theory (@BullTheoryio) December 29, 2025 Investors initially favored lower-volatility hedges. As metals advanced, risk appetite gradually rebuilt.  This progression allowed capital to reposition later into assets offering asymmetric upside, following stabilization across broader markets. Bitcoin Stabilization After Systemic Deleveraging Post-liquidation environments tend to suppress speculative momentum. Bull Theory highlighted a major liquidation event on October 10, drawing parallels…

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Filed under: News - @ December 29, 2025 9:24 am