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Gold jumps 6.1 per cent to US$4,946 as geopolitical tensions override dollar weakness: What about...
Anndy Lian
Gold jumps 6.1 per cent to US$4,946 as geopolitical tensions override dollar weakness: What about Bitcoin?
Investors grew cautious about artificial intelligence potentially creating fiercer competition within the software sector, which kept sentiment fragile even as the partial United States government shutdown concluded late Tuesday after President Trump signed a funding agreement negotiated with Senate Democrats.
Meanwhile, the Reserve Bank of Australia made a decisive move by raising its key interest rate to 3.85 per cent from 3.60 per cent, marking the first major economy to tighten monetary policy this year after determining that inflation pressures remained stubborn enough to require renewed restraint. This divergence in global central bank approaches highlights an uneven economic landscape, with some regions facing persistent price pressures while others are preparing for easing cycles later this year.
United States equities retreated decisively, with the Dow Jones Industrial Average falling 0.34 per cent, the S&P 500 dropping 0.84 per cent, and the technology-heavy Nasdaq Composite declining 1.43 per cent. The selloff centred on software stocks following Anthropic’s release of Claude Co-work plug-ins, which amplified fears about competitive disruption in an already crowded artificial intelligence ecosystem.
Investors rotated capital toward economically sensitive sectors seeking broader exposure beyond concentrated technology holdings. This shift pushed the VIX Index to 18.00, its highest level in two weeks, signalling rising anxiety about near-term market direction. The uneven nature of the United States’ recovery suggests merit in considering alternatives to the standard S&P 500, such as an equal-weighted index or low-volatility strategies that provide more balanced sector representation while maintaining exposure to select cyclicals, such as financials and industrials, alongside defensive healthcare segments.
Treasury yields moved lower as the equity selloff gathered momentum, with the two-year note falling 0.2 bps to 3.570 per cent and the 10-year yield declining 1.2 bps to 4.265 per cent. This inverse relationship between stocks and bonds reflected a classic risk-off rotation, with investors seeking safety in fixed-income assets amid turbulence in the technology sector.
The move supports a strategic approach of extending bond duration to the five to seven-year range while accumulating high-quality investment-grade debt, particularly from developed and emerging-market sovereign and corporate issuers. These instruments offer attractive real yields in an environment where central banks may begin to ease later this year, though timing remains uncertain given persistent inflation dynamics in some economies.
Currency markets reflected subtle shifts in global risk appetite, with the United States Dollar Index declining 0.20 per cent to 97.437 as the greenback weakened against nearly all G10 counterparts. The euro strengthened to 1.1819 against the dollar, gaining 0.2 per cent, while the Japanese yen continued its struggle with USD/JPY, rising 0.1 per cent to 155.75.
This yen weakness stemmed from expectations of a strong election victory for Prime Minister Takaichi, which raised concerns about Japan’s fiscal sustainability and long-term debt trajectory. The broader dollar downtrend appears intact, with further Federal Reserve easing expected to dominate currency movements through the remainder of the year, potentially supporting additional gains in EUR/USD while pressuring USD/JPY lower on a broad dollar basis.
Commodity markets displayed sharp reactions to geopolitical developments, with Brent crude oil rising 1.6 per cent to settle at US$67/bbl after reports emerged that the United States Navy shot down an Iranian drone approaching an American aircraft carrier in the Arabian Sea.
This incident reignited tensions between Washington and Tehran, raising immediate fears of supply disruptions. Precious metals surged dramatically, with gold advancing 6.1 per cent to US$4,946/oz and silver climbing 7.4 per cent to US$85/oz. These gains reflected classic safe-haven demand as investors sought protection amid rising geopolitical risks and equity market volatility, though the underlying outlook for oil remains cautiously negative given structural supply dynamics.
Asian markets diverged positively from their Western counterparts, with regional indices gaining ground, lifted by the strength of precious metals and optimism surrounding a newly announced United States-India trade agreement. South Korea’s Kospi Index led regional advances with a remarkable 6.8 per cent jump, fuelled by a powerful rally in chipmaker semiconductor and memory chip-related stocks.
China’s Shanghai Composite added 1.3 per cent, while Taiwan’s TWSE closed 1.8 per cent higher, demonstrating resilience in technology manufacturing hubs despite weakness in United States tech shares. This divergence suggests regional markets may be pricing in different growth trajectories or benefiting from sector-specific catalysts that offset broader global risk aversion.
The cryptocurrency market declined 2.05 per cent to US$2.59T over 24 hours, primarily driven by a Bitcoin-led liquidation cascade that revealed the asset class’s tight correlation with traditional equities. Bitcoin’s drop below the psychologically critical US$74,000 level triggered a wave of forced closures on overleveraged long positions, with liquidations surging 149 per cent to US$263.49 million within a single day.
Ethereum dramatically underperformed, falling 24 per cent over seven days, which weighed heavily on the broader Layer 1 ecosystem, while the Fear and Greed Index plunged to 14, indicating extreme fear across digital asset markets. The 92 per cent correlation between Bitcoin and the S&P 500 underscores how macro liquidity conditions now dominate cryptocurrency price action more than idiosyncratic blockchain developments.
The near-term market trajectory hinges critically on whether Bitcoin can stabilise above US$74,000. A successful defence of this support level could catalyse a relief bounce toward US$77,200 to US$78,400, particularly if the United States spot Bitcoin ETF flow data shows renewed institutional accumulation.
Conversely, a decisive break below US$74,000 may accelerate selling pressure toward US$72,850, intensifying the current downtrend. The market exists in a fragile sentiment-driven state where technical factors like leveraged position unwinds interact with macro correlations, leaving little room for sector-specific catalysts to drive independent price action.
This confluence of factors paints a picture of markets navigating a delicate transition period. Technology volatility rooted in competition over artificial intelligence intersects with divergent global monetary policies and persistent geopolitical risks.
While US equities face headwinds from concentrated sector exposure, Asian markets show resilience, driven by semiconductor strength and optimism about trade deals. The cryptocurrency market’s sharp liquidation cascade ultimately reflects its current status as a risk asset tightly coupled to broader liquidity conditions rather than a diversifying alternative.
Investors would be wise to maintain balanced portfolios with quality fixed income allocations, defensive equity segments, and selective exposure to economically sensitive sectors, while carefully monitoring key technical levels in both traditional and digital asset markets. The path forward demands vigilance regarding central bank communications, earnings results, and geopolitical developments that could rapidly reshape risk sentiment across all asset classes.
 
Source: https://e27.co/gold-jumps-6-1-per-cent-to-us4946-as-geopolitical-tensions-override-dollar-weakness-what-about-bitcoin-20260204/
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CZ Walks Back the Bitcoin Supercycle Call — Here’s What Changed
Former Binance CEO Changpeng Zhao, better known as CZ, has softened his stance on one of his boldest recent ideas: that Bitcoin was heading into a multi-year “supercycle” starting in 2026. Speaking during a weekend AMA, CZ admitted that his confidence has faded after recent market turbulence exposed how fragile sentiment still is.
Just weeks earlier, he sounded convinced. Now, after Bitcoin’s sharp slide toward $75,000 and a cascade of liquidations that erased nearly $2.5 billion in leveraged positions, his tone has shifted from certainty to caution.
“A couple of weeks ago, I was very confident about the supercycle,” CZ told listeners. “But now, with all this FUD, I’m not sure.” He pointed in particular to misinformation spreading on Crypto Twitter, which he believes amplified panic and accelerated the selloff.
Why CZ Was Bullish on a Supercycle
CZ’s supercycle thesis first gained attention during an interview on CNBC Squawk Box with Andrew Ross Sorkin. At the time, he argued that Bitcoin might finally break free from its historical boom-and-bust rhythm.
His reasoning centered on politics and policy. A more crypto-friendly regulatory stance in the United States, he said, could unlock sustained institutional capital flows-enough to override the traditional four-year cycle driven by halvings. In that environment, Bitcoin wouldn’t just rally and crash; it would trend higher for years.
“I think this year, given the U.S. being so pro-crypto and other countries following,” CZ said at the time, “we will probably break the four-year cycle.”
A Quick Refresher on Bitcoin’s Four-Year Cycle
Historically, Bitcoin’s major bull runs have followed its halving events, which occur roughly every 210,000 blocks and cut the mining reward in half. Reduced new supply has repeatedly coincided with explosive price moves.
After the 2012 halving, Bitcoin rose from about $12 to over $1,000.
The 2016 halving preceded the 2017 rally to nearly $20,000.
The 2020 halving came before the 2021 peak near $69,000.
CZ believed the next cycle would be different, driven less by supply mechanics and more by institutional adoption and regulatory clarity.
What Shook His Confidence
The recent crash challenged that optimism. Bitcoin failed to hold key support around $82,500 and quickly sliced through multiple levels. It dropped below its 50-day exponential moving average near $75,500, a technical breakdown that often signals deeper weakness.
More importantly, price fell below Bitcoin’s realized value, estimated around $80,700. That level represents the average on-chain cost basis of all coins in circulation. Trading below it means the majority of holders are underwater, a condition that tends to weigh heavily on sentiment.
This Wasn’t Just a Crypto Problem
The selloff wasn’t isolated to digital assets. Gold fell roughly 9% to around $4,900, while silver plunged more than 26% to near $85. Combined losses across precious metals exceeded $10 trillion, highlighting a broader risk-off move rather than a crypto-only event.
That cross-asset correlation suggested deeper macro stress. According to CZ, three forces converged at once: escalating U.S.–Iran tensions that boosted demand for the dollar, persistent inflation and policy uncertainty, and social-media-driven fear that accelerated liquidation cascades.
Adding fuel to the fire was the nomination of Kevin Warsh to lead the Federal Reserve. The announcement triggered a sharp U.S. dollar rally, making dollar-denominated assets like Bitcoin, gold, and silver more expensive for non-U.S. buyers.
Inside the Liquidation Spiral
The derivatives market revealed just how stretched positioning had become. Initial liquidations totaled about $850 million early Saturday, but the number ballooned to roughly $2.5 billion as forced selling fed on itself. Nearly 200,000 trader accounts were fully liquidated.
With weekend liquidity thinner than usual, automated selling pushed prices lower, triggering even more margin calls. Data from Kaiko shows order-book depth remains more than 30% below October levels, leaving markets unusually sensitive to large trades.
Is the Supercycle Idea Dead?
CZ hasn’t buried the supercycle concept entirely. Instead, he’s stepped back from trying to time it. “We live in a very volatile global environment,” he said, noting that equities, commodities, and crypto are all being pulled by the same macro forces.
A supercycle, in theory, would mean Bitcoin entering a long, relatively uninterrupted bull market-behaving more like a mature store of value once adoption and regulation reach critical mass. CZ still thinks that outcome is possible, just not predictable under current conditions.
What Still Supports the Long-Term Case
Despite the turbulence, several structural positives remain. Corporations continue to add Bitcoin to their balance sheets. Regulators in major jurisdictions, especially the U.S., have become more constructive. And innovation across blockchain infrastructure and derivatives markets continues regardless of short-term price swings.
At the same time, those positives are now competing with geopolitical risk, tight financial conditions, and a macro backdrop that’s far less forgiving than it appeared when the supercycle thesis was first floated.
CZ’s Advice Now: Patience Over Prediction
CZ’s guidance has shifted accordingly. Instead of bold forecasts, he’s urging a long-term, buy-and-hold mindset and warning against reacting to every headline or rumor on social media.
On-chain data supports that divide in behavior. According to Glassnode, smaller holders have been net sellers for weeks as prices slid from the $126,000 peak, while large “mega-whales” quietly accumulated, pushing their holdings back to late-2024 levels.
That pattern often appears near major inflection points, though it doesn’t guarantee an immediate rebound.
The Takeaway
CZ’s retreat from his supercycle call is less about abandoning Bitcoin’s long-term potential and more about acknowledging reality. Macro forces, geopolitics, and liquidity now matter as much as halvings and adoption narratives.
For now, even seasoned insiders are choosing humility over bold predictions. The fundamentals may still be building-but timing, as CZ now admits, is a far tougher game.
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