Following months of poor performance, in early 2026, Bitcoin is beginning to show signs of life compared to gold and silver. Precious metals dominated headlines as silver prices reached $120 and gold reached over $5,100, however Bitcoin lagged behind at less than $90,000. Now with the re-entrance of institutional capital and the presence of positive technical indicators, there are indications that the tide may be turning for Bitcoin to increase.

During late 2025 and early 2026, Bitcoin faced its most challenging phase. The cryptocurrency that promised to replace gold found itself thoroughly beaten. Silver shot upwards more than 50% year to date while Bitcoin struggled to hold the $88,000 support level.

Investors felt acute pain while watching precious metals take on the narrative of safe havens. As geopolitical tensions escalated, combined with a decline in value of the dollar, money flowed into metals instead of bitcoin. Investors saw over $1.6 billion in outflows for U.S. spot bitcoin ETF’s, which shows that institutions are retreating.

However, this dynamic is changing. Bitcoin recovered from a low of approximately $87,600 to trade close to $95,000, signifying a reversal of the previous trend. More importantly, institutional money is back in the game as bitcoin ETF’s experienced $1.9 billion in inflows during just the first week of January 2026.

Bitcoin is outperforming due to several factors. First, the liquidity rotation thesis is taking place as predicted; capital moves in stages and typically first flows into preservation assets such as gold before finally reaching for higher yielding investments. The parabolic rise in gold may have exhausted itself.

Second, historical patterns suggest Bitcoin has never had two consecutive down years in its first 15 years of existence; following an underperformance year, crypto will usually be one of the best performing asset classes.

Finally, technical indicators are positive, as long-term holder supply has recorded a 30-day net increase of 10,700 BTC, suggesting that investors have stopped distributing. At the same time, continued net outflows from exchanges are reducing the amount of available selling inventory.

The recovery positions for Bitcoin to rise substantially. Analysts have various targets ranging from $105,000 to $150,000 by mid-year 2026, with some of them predicting new all-time highs above $126,000 by end January. Options market commitments pick up again at $98,000 – $100,000 calls.

Farzam Ehsani, CEO of VALR, believes that Bitcoin could rise to $130,000 in Q-1 of 2026 assuming metals rally cool. He characterized Bitcoin’s rally against record metals gains as “calm before the storm” followed by wider crypto surges.

Major catalysts include potential passage of cryptocurrency laws; the proposed laws aligned with CLARITY Act which would establish an overall regulatory framework on Cryptocurrencies; and continued institutional purchases in ETFs of Cryptocurrencies. Plus, decreasing supply due to half of blocks being created may cause the basis to create favorable market conditions for additional institutional purchases and increased demand from people buying crypto.

The recent performance of Bitcoin suggests a major change from what we have been experiencing for the last few months. Precious metals dominated this “safe haven” trend during late 2025 however, Bitcoin is beginning to establish itself as a higher growth option again. With an increase from the low end of the range and new institutional capital flowing back into the market as well as a better technical foundation, it appears we’ve passed through the worst of it.

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