Since last October, Bitcoin and major altcoins have endured a significant pullback. Bitcoin has retraced nearly 50% from its roughly $126,000 peak, while most altcoins have lagged even further behind. By contrast, gold has repeatedly hit fresh highs, highlighting a stark divergence.
Chris Tipper, an analyst at Australian crypto investor Ainslie Wealth, says the divergence is not the result of Bitcoin decoupling from global liquidity but stems from a structural shift in capital flows. He notes that China’s central bank injected similar liquidity in 2023 and 2025 and expects around another $1 trillion to be added in 2026. However, because China continues to ban crypto trading and investing, that fresh liquidity has not flowed into the Bitcoin market and instead has been redirected into physical assets such as gold and real estate (RWA).
Tipper argues that Western liquidity momentum already peaked last October and has been waning ever since. Gold, he says, quickly sensed China’s capital reallocation and surged to record highs. Bitcoin’s downward pressure, he adds, is more about this “liquidity diversion” than about deteriorating fundamentals.
He predicts that Bitcoin’s comeback will hinge on whether Western liquidity can regain traction—by way of Federal Reserve easing, a softer dollar, or renewed global risk appetite. If that happens, suppressed capital may flow back into crypto assets and ignite a new cycle.