Risk management is taking center stage amid rising market FUD.
From a technical perspective, the crypto market has wiped out more than $1 trillion in under a month, forcing investors to reposition. And yet, the absence of meaningful dip-buying suggests sentiment might be cautious.
At the same time, geopolitical uncertainty has been elevated too. China has reportedly instructed banks to cut exposure to U.S. Treasuries – A macro shift that has proven to be a key factor for Bitcoin [BTC] in this cycle.
China’s holdings of U.S. Treasuries have dropped to an 18-year low of $682 billion. In fact, in 2025 alone, the total U.S. Treasury held by China fell by roughly 11% amid aggressive selling.
In this context, as Beijing pushes banks to reduce Treasury exposure, momentum behind its “de-dollarization” is building, adding pressure to the U.S. dollar. Especially since it is already down 1.4% after closing 2025 with a 9.4% dip.
For Bitcoin, a weak dollar has historically supported bull cycles.
However, the 2025 cycle diverged from that pattern, raising a key question – As investors continue managing risk amid “persistent” FUD, could this be an early sign that Bitcoin’s $70k-level is a top rather than a bottom?
Cautious investors continue to test Bitcoin’s safe-haven appeal
The 2025 divergence reflected a shift in investor positioning.
Unlike previous cycles, Bitcoin ended the year down 6.3%, even as the U.S dollar fell by 9.4%. At the same time, gold (XAU) rose by 65%, driving the BTC/XAU ratio 44% lower – Its weakest level since the 2022 bear market.
The result? Bitcoin dropped from $30k to $15.5k that cycle. Now, the divergence is showing up again, with the BTC/XAU ratio closing the weekly candle below the 15.50 support level – A level historically linked to BTC tops.
Against this backdrop, China’s recent moves have been gaining significance.
Their push to reduce Treasury exposure is putting additional pressure on the U.S Dollar, highlighting underlying stress. For investors, this translates into greater caution. On the other hand, for the government, it drives yields on debt higher.
Bitcoin, in turn, faces pressure on its “safe-haven” status, which it failed to hold during the 2025 cycle. Moreover, with the BTC/XAU ratio now breaking a key support level, the market might be set for a similar move.
In short, while it may be too early to call Bitcoin’s $70k a top, the combination of macro FUD and investor positioning means it is far from a bottom, with analysts still pointing to a potential 50% drop.
Final Thoughts
- A $1 trillion market wipeout and China reducing Treasury exposure are pressuring the U.S. dollar and testing Bitcoin’s safe-haven status.
- The BTC/XAU ratio breaking its key support hinted at a repeat of the 2025 cycle.
