Bitcoin's Quiet Adjustment: Could Surging Gold and Silver Signal a Bull Market Ahead?

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Market Divergence: What Does Bitcoin’s Weakness Mean?

While gold and silver are setting all-time highs, Bitcoin has experienced a sharp decline of over 30%, currently trading around $87,000. However, some analysts suggest this asset divergence may not be a warning sign but rather a precursor to a repeat of previous bull markets.

Precious Metals Leading the Way: The 2020 Pattern and Its Repetition

Analyst Bull Theory has drawn parallels between the current market and the post-COVID-19 period of 2020. At that time, gold surged from $1,450 to $2,075, while silver jumped from $12 to $29 in a short period. Meanwhile, Bitcoin remained sideways between $9,000-$12,000 for approximately five months before capital began flowing into cryptocurrencies, eventually reaching $64,800 in Q2 2021—a 440% gain from the August 2020 lows.

Bull Theory observes that this same “capital rotation” pattern appears to be repeating in 2025. Gold has reached new highs above $4,550, silver above $84, while Bitcoin has declined over 30% from its October peak of $126,000 due to massive liquidations, currently trading below $90,000.

“This Cycle: Liquidity + Structural Factors Combined”

Bull Theory emphasizes that precious metal price increases are typically followed by capital flowing into risk assets, suggesting this may mark the beginning of a bull market rather than the end of a cycle. Moreover, 2026 could see multiple favorable catalysts converging simultaneously.

The factors cited include: continued interest rate cuts, renewed central bank liquidity provisions, banking leverage relaxation, clearer cryptocurrency regulations, and the launch of diverse ETF products beyond Bitcoin. Unlike 2020, structural tailwinds are adding to the upside potential.

Bull Theory states: “If Bitcoin’s previous bull run was driven primarily by liquidity, this time both liquidity and structure will work in tandem,” suggesting strong upside potential.

Bitcoin’s Quiet Period: The Calm Before the Storm?

As of late December, Bitcoin has rebounded modestly around $90,000 with daily gains of approximately 2%, though it remains down about 6% year-to-date. Recent weekly trading has been confined to a relatively narrow $86,000-$90,000 range with low trading volume and momentum.

In contrast, gold has surged 75% year-to-date while silver has risen over 170%, significantly outperforming the broader market. Consequently, Bitcoin’s relative value against precious metals has fallen to multi-year lows, leading to analysis that Bitcoin is currently “relatively undervalued.”

Bull Theory notes: “This sideways consolidation may represent a quiet period before a significant rally rather than the beginning of a new bear market.” He further predicts: “If precious metal prices undergo correction and capital rotates back into risk assets, Bitcoin could appreciate four-fold or more in 2026.”

Key Takeaways

Market Interpretation: The divergence between Bitcoin weakness and precious metal strength opens the door to a potential repeat of past bull markets. Attention should be paid to the capital rotation structure between asset classes.

Strategic Insight: 2026 could see interest rate cuts, liquidity expansion, regulatory clarity, and ETF expansion occurring simultaneously, potentially creating attractive entry points for long-term investors.

Key Terms:

• Liquidity: The amount of capital circulating in markets
• Leverage Liquidation: Forced closure of leveraged positions when losses mount
• Capital Rotation: The flow of investment funds between different asset classes