This week, Bitcoin (BTC) saw a sharp pullback after weeks of bullish price action and a strong start to 2026. In the bigger picture, BTC once again behaves less like a safe haven asset and more like a risk-on bet. That goes against its perceived image, conceived in the pro-Bitcoin community.
As the first three weeks of this year proved eventful, let us examine the latest news and expert analysis on what it means for crypto investors.
BTC Price Analysis
In 2026 so far, Bitcoin’s price has been on track to the psychological target of $100 thousand until recently. The frequency of upside movements and downside corrections, with a brief accumulation period in between, is not out of the ordinary. Yet, it is the price decline to $87,760 (per Coinbase quote) after January 19 that sparked headlines.
The trading volume dynamics have been occasionally asymmetric, with the price dynamics too. The climb to $94,850 (on Coinbase) on January 5 saw heightened volumes at the start and the peak of the surge, while the increase was building up with relatively muted volumes.
Low-volume rallies are usually less sustainable, as they merely indicate a lack of selling pressure rather than rising demand. This is probably why the first leg up saw BTC price rise about 9% over 5 days. The second leg, which added another 9% to BTC, was significantly faster, only 2 days (January 13 to 15).
Similarly, the most recent correction mirrors this ascent and shares both its short duration and high trading volume. However, it was not caused by the price dynamics and technicals alone. There are macroeconomic factors at play that make this particular case worth analyzing.
Macro Factors of BTC Price Action
On a macro level, trends reflect turmoil around the proposed U.S. crypto legislation, the CLARITY Act. For the time being, the legislation has not been agreed upon. It does not seem to be nearing that conclusion. On January 15, Coinbase’s CEO Brian Armstrong announced they are pulling support of the bill. It is a party working on the committee as an industry representative. It cited dissatisfaction with the results of lengthy discussions as a reason. The public post on X coincides with the January rally peak. It did not exactly cause, but possibly fueled the trend change to the downside.
The bill’s current iteration raises divided responses from industry figures of note. Ripple’s CEO Brad Garlinghouse reluctantly endorsed it, for any clarity is better than no clarity at all. Armstrong, on the other hand, seems to have reconsidered his support, similarly to Cardano’s Head Researcher Charles Hoskinson. The criticisms range from opposition to specific provisions in the bill. Others reject the very idea of forcing the U.S. crypto industry to answer to the state.
Traditional Market Correlation Triggers Crypto Risk-Off Shift
Crypto markets are also as correlated to the traditional financial markets as ever. It reveals another major factor that accelerated the price action in BTC. The downturn in the crypto markets correlates with Bitcoin’s drop. It quite clearly corresponds to capital flight to assets considered “safe haven” in traditional finance: gold and silver in particular. On the weekly scale, both commodities have seen a 5–8% increase in price.
The reason for that is most likely political as well, and connected with the United States, too. This time, rising tensions between the U.S. and Europe drive it, centered on Greenland. Tariff announcements have previously led to similar market reactions. This time, these measures are in response to European countries opposing the potential takeover of the Danish island, a repeated threat coming from the current U.S. President Donald J. Trump and his administration.
In other words, Bitcoin and crypto drop, while risk-off assets grow. This suggests redistribution of capital, where the former are put into the risk-on category. But does not that contradict the narratives of “digital gold” and “hedge against inflation” surrounding Bitcoin?
Is Bitcoin Risk-On or Risk-Off?
What do crypto investors make of the news and its larger implications, then? We asked the financial analyst for the ChangeHero instant exchange platform, Alexander Brass, for a comment:
“The narratives surrounding Bitcoin in the crypto space and it being viewed as a risk-on asset from the trading POV are not contradictory once you look beyond the surface. Neither “digital gold” one nor “hedge against inflation” necessitate that it should be viewed the same as safe haven assets, at least for now; they are focused on other aspects of BTC’s value.
Bitcoin is digital gold because it was designed to be scarce; gold was ubiquitous as money at some point, too. Bitcoin is hedge against inflation because of its limited total supply, until 2140 it will actually have inflation, too. BTC being treated as risk-on asset is practice, while narratives are theory. The former does not invalidate the latter in the long run; neither the latter dictate how this asset behaves in real life.”
Bottom Line
So what is his takeaway from the analysis? Despite the disconnect, the current situation in the crypto market is not anything to worry about. It is a decent example of how Bitcoin behaves as a financial asset, even if it is not what one might expect. Contrarian tactics might work, but if you are going up against institutional investors that treat it as a growth-oriented risk-on pick, at least practice good risk management and be ready to trade in adverse conditions.
Incidentally, ChangeHero exchange users can avail of any strategy with flexible trading pairs, competitive rates, floating and fixed rate options, and a streamlined process that does not require registration. Founded in 2018, the platform served thousands of users through bull and bear markets alike.