Crypto vs Other Assets: Reclassification of Market Sentiment 2026

The start of 2026 brings a clear market divide. “You can make money in everything but crypto” — this statement has recently spread through the investment community and reflects a deep shift in market sentiment. While gold, silver, and the US stock market are hitting new records, Bitcoin and the crypto markets tell a completely different story.

Market Sentiment Divide and Capital Flows

By the end of 2025 and the beginning of 2026, the sentiment across asset classes has diverged sharply. At the close of 2025, gold prices rose 60%, silver surged 210.9%, and the Russell 2000 index of US stocks increased 12.8%. Meanwhile, Bitcoin briefly hit new highs but ended the year with negative returns.

On January 20, 2026, gold and silver again reached new peaks, and the S&P 500 has been rising for 11 consecutive days. China’s stock market (CSI 50) gained 15% in a month. Yet, Bitcoin has fallen for five straight days, dropping from $98,000 to $91,000. Currently, Bitcoin stands at $70.84K, down 4.05% last week.

This shift in market sentiment raises a fundamental question: why are different investor segments making completely opposite decisions? The answer lies in the reclassification of emotions among market participants and their changing risk assessment approaches.

Liquidity Crisis and Central Bank Policies

To understand Bitcoin’s disappointing performance, we need to analyze the global liquidity environment. Bitcoin acts as a “leading indicator” of global risk assets — a point repeatedly emphasized by Raoul Pal, founder of Real Vision. According to his research, historically, Bitcoin has led the S&P 500 more often than not, meaning when Bitcoin loses momentum, it signals a strong warning for the broader market.

The real issue is the state of macro liquidity. The Federal Reserve cut interest rates in 2024 and 2025, but quantitative tightening (QT) since 2022 has been steadily draining liquidity from markets. Despite new inflows via ETFs, the core macro liquidity problem remains unresolved.

More critically, the Bank of Japan raised its short-term interest rate to 0.75% in December 2025 — the highest in nearly 30 years. This has cut off a major liquidity source for global risk assets, as the yen carry trade has long been used by investors to fund positions. Historical data shows that every rate hike by Japan’s central bank since 2024 has led to more than 20% decline in Bitcoin’s price.

Geopolitical Uncertainty: A New Source of Market Sentiment

Global geopolitical tensions have added a new layer to market sentiment. Early 2026 has seen multiple international and domestic actions by the Trump administration that have caused significant investor concern.

Internationally, attempts at military intervention in Venezuela, potential conflict with Iran, and an unusual effort to buy Greenland have created deep uncertainty about the global outlook. Domestically, discussions about constitutional crises and proposals to rename the Department of Defense as the Department of War have spread anxiety.

Such uncertainty is deadly for investors who do not rely on clear market expectations. When large capital flows face an uncertain future, rational choices tend toward cash preservation and avoiding high-volatility assets.

Gold and Stocks: Market Sentiment Driven by Government Policies

Meanwhile, strong performance in other asset classes has been driven primarily by increasing government intervention, reshaping market sentiment into a new category.

Gold prices have been mainly supported by central bank purchases worldwide. According to the World Gold Council, in 2022 and 2023, central banks bought over 1,000 tons of gold — a record. This signals a clear shift: global institutions are losing confidence in the dollar-based system.

US stocks, especially AI-related shares, have benefited from strong government backing. The CHIPS and Science Act has elevated the AI sector to a national security level, attracting large capital flows into this government-approved area. A similar pattern is seen in China, where A-shares are concentrated in sectors related to industrial independence and domestic tech development.

This shift reflects a profound change in market sentiment: investors are now focusing on government-supported themes and national policy priorities, moving away from market-driven decentralized tech.

Historical Changes and Future Outlook

However, history suggests this kind of asset divide may not last long. Historically, Bitcoin’s RSI (Relative Strength Index) has fallen below 30 — a sign of extreme oversold conditions — four times: in 2015, 2018, 2022, and 2025. Each time, following this signal, Bitcoin experienced a major rebound.

After the RSI signal at the end of 2015, a strong bull market followed in 2016-2017. In 2018, when Bitcoin dropped over 40% (while gold only rose 6%), the RSI signal was followed by a recovery of over 770% in 2019-2020. After a heavy downtrend in 2022, Bitcoin again rebounded strongly following RSI signals in early 2024 and 2025.

Currently, we are seeing this historic oversold signal for the fourth time. As gold rose 60% to $2025, Bitcoin’s RSI again fell into oversold territory — a pattern that historically signals a potential recovery.

The Meaning of Market Sentiment Reclassification

Analyzing the current situation reveals some key insights. On one hand, global investor sentiment has reached its highest level since July 2021 (according to Bank of America surveys), with cash holdings at their lowest. On the other hand, geopolitical uncertainty continues to rise, and an AI market bubble may be forming.

This combination creates a “gray zone”: markets are simultaneously overly optimistic and deeply uncertain. In such conditions, Bitcoin’s “stability” — or what many call “lagging” — is actually a strong warning and a sign that the system is preparing for reorganization.

For long-term investors, this is a test of faith, a temptation to resist panic, and a readiness for potential upcoming rallies. The reclassification of market sentiment is eternal, and history suggests that those who stand against the crowd often emerge as ultimate winners.