Why are Bitcoin and Ethereum still fluctuating when commodities hit record highs?

While the commodities market hits record highs, the cryptocurrency market appears somewhat “lukewarm.” According to the latest news, Bitcoin is fluctuating around $90,788, Ethereum is hovering near $3,116, and both are close to key support levels, while the market sentiment index is only 27, indicating fear. Behind this market divergence reflects the different risk pricing across asset classes.

The Truth About Market Divergence

Why Are Commodities Reaching New Highs?

Investors are using commodities to hedge geopolitical risks. When global situations are uncertain, traditional safe-haven assets like gold and oil tend to be in high demand. The new highs in commodities are a direct reflection of this risk-hedging demand.

In contrast, although cryptocurrencies are also viewed by some investors as risk assets, traditional commodities are more attractive in the face of geopolitical risks. This explains why Bitcoin and Ethereum have performed relatively flat during this period.

What Supports Cryptocurrencies?

Although short-term sentiment is cautious, the fundamentals supporting cryptocurrencies still exist:

• Bitcoin’s market cap has reached $1.81 trillion, accounting for 58.53% of the entire crypto market, indicating a relatively stable market structure
• According to relevant data, Bitcoin’s trading volume in the past 24 hours reached $2.982 billion, a 145.40% increase from the previous day, showing that market participation remains strong
• Institutions like MicroStrategy continue to increase their Bitcoin holdings as part of their long-term investment strategy

Long-term Trends Driven by Policy

Short-term market sentiment should not obscure ongoing structural changes. The global policy environment toward cryptocurrencies is shifting:

These policy initiatives indicate that major economies are gradually embracing crypto assets, paving the way for long-term growth.

Dislocation Between Market Sentiment and Price

The Fear and Greed Index is only 27, indicating a clear state of fear in the market. However, this sentiment contrasts interestingly with the fundamentals:

Total market cap is around $3.19 trillion, but liquidation volume is only $199 million, suggesting that leverage risk in the market is relatively manageable. This means that current fear is more psychological than a sign of fundamental collapse.

Key Points to Watch Moving Forward

The timeline of policy implementation is worth monitoring. The launch of South Korea’s ETF and the expansion of trading hours in Brazil will gradually provide more institutional channels for crypto participation. Meanwhile, the continued accumulation by institutional investors like MicroStrategy also validates their long-term value judgment.

Summary

The record highs in commodities and the oscillation in cryptocurrencies fundamentally reflect the different risk pricing of these assets. In the short term, geopolitical risks have driven up traditional safe-haven assets, but this does not mean the fundamentals of cryptocurrencies are deteriorating. On the contrary, gradual policy friendliness worldwide, ongoing institutional participation, and manageable market risks are all supporting long-term value. When market sentiment shifts from fear to rationality, these supports may be more clearly reflected in prices.