From January 30 to February 2, 2026, during just a few trading days in the Eastern Eight Time Zone, gold, silver, and crypto assets experienced a dramatic plunge almost simultaneously, leading to a sharp decline in global risk asset sentiment. COMEX gold collapsed about 16% from above $5,000 per ounce, while spot gold fell from around $5,600 to the $4,600-$4,900 range. Silver recorded a maximum daily drop of up to 39%, with liquidity being squeezed multiple times during trading. During the same period, high-beta crypto assets like Bitcoin and SOL also retreated, and the narrative of "digital gold" as a safe haven was ruthlessly corrected by the market. This crash, spanning both traditional and crypto worlds, was not an isolated emotional collapse but rather resembled a global deleveraging storm, with various leveraged positions being concentrated and liquidated, and the interconnections and transmission mechanisms are just beginning to reveal their outlines.
Gold's Fall from Highs: Collective Liquidation of Precious Metal Bulls
● Complete Path of High-Level Reversal: From the perspective of time and price, COMEX gold maintained its historical high above $5,000 per ounce at the end of January, then rapidly collapsed about 16% within a few trading days in early February, quickly dismantling the long positions centered around futures. The spot market also faced severe impacts, with prices being continuously hammered down from about $5,600 to hover in the $4,600-$4,900 range, forming a dual "high diving" in both market and sentiment levels.
● Extreme Scenario of Silver's 39% Plunge: Unlike gold, which retained some liquidity support, silver faced even more extreme selling pressure during the same storm. According to multiple market data sources, silver's maximum daily drop reached 39%, with multiple instances of buying vacuum during trading, resulting in a near "straight-line drop" in prices. A large number of short- to medium-term long leverages were instantly liquidated, and the combination of margin calls and forced selling led to a sharp thinning of orders on the books, with liquidity premiums rapidly converting into deep discounts.
● Global Deleveraging's Concentrated Inflection Point: Gold and silver, traditionally viewed as safe-haven assets, simultaneously lost ground during the same window period, which is essentially not due to the deterioration of a single asset's fundamentals but rather closer to a concentrated inflection point of global financial asset deleveraging. As prices continuously broke through key technical levels and risk indicator thresholds, cross-market quant funds, CTAs, and structured products were forced to reduce positions. Precious metal bulls collectively retreated under the triple pressure of margin, risk limits, and funding costs, reflecting "asset class dysfunction" rather than mere emotional fluctuations.
Sudden Margin Increases: The Chain Reaction Triggered by CME's Notice
● Triggering Relationship of Margin Policy and Timing: After prices continuously breached key levels, according to single-source information, CME promptly raised the margin requirements for gold and silver futures, closely aligning with the window of this severe volatility. This adjustment was not entirely coincidental with the market but rather seemed like a regulatory response to the previous high volatility and high leverage accumulation; however, in the short term, it directly increased holding costs, becoming one of the important triggers for accelerating deleveraging (note that this information has not yet been corroborated by multiple sources).
● Margin Increase Triggers a Chain of Liquidations: When the margin standards were raised, a large number of leveraged longs, already on the edge of floating losses, immediately faced the pressure of "either add margin or be forcibly liquidated." For speculative positions highly sensitive to capital efficiency, adding margin meant a rapid deterioration of the risk-reward ratio, leading many to choose to close positions directly. The combination of passive position reduction and forced liquidations further amplified the downward momentum, creating a negative feedback loop of price decline—insufficient margin—passive selling—further price decline.
● Discrepancy of "Short Pain for Long Stability": In terms of market perspectives, some institutional research believes that "CME's margin increase is beneficial for medium- to long-term market stability," emphasizing that by raising trading thresholds and compressing excessive leverage, systemic risks and volatility can be reduced in the future. However, for traders caught in the eye of the storm, this felt more like a "cold, cruel stab," forcing deleveraging at the moment of tightest liquidity and weakest sentiment, causing short-term price fluctuations to far exceed reasonable fundamental ranges, with disputes still brewing around the balance between regulation and market self-adjustment.
Bitcoin and SOL Follow the Downtrend: The Moment of Shattered Safe Haven Myth
● Synchronized Downturn of Key Price Levels: At the moment of turmoil in traditional markets, the crypto market did not play the role of an "independent safe haven" as some narratives suggested. According to single-source data, BTC briefly fell below the $76,000 mark, and SOL's price dropped below $100. The breach of these price levels, seen as iconic assets in the crypto market, marked a clear synchronization of risk curves between traditional and crypto assets in this event. For leveraged positions relying on technical thresholds and liquidation prices to manage risk, these numbers were not just psychological barriers but also real thresholds triggering forced liquidations.
● Contrast of the "Digital Gold" Narrative: In previous macro volatility cycles, Bitcoin was often packaged as "digital gold," viewed by some funds as an alternative asset to hedge against inflation and monetary easing. However, this time, when physical gold itself plummeted from $5,600, the market's pricing system for "safe haven" was entirely rewritten, with crypto assets being sold off alongside precious metals, and the independence narrative of "digital gold" was called into question in practice. Spread and correlation data indicate that this round was not the traditional pattern of gold falling and Bitcoin rising, but rather a collective deleveraging of high-risk assets under the same macro shock.
● Passive Risk Reduction Under the Deleveraging Chain: From a structural perspective, the decline of Bitcoin and SOL is more akin to a leveraged squeeze and passive risk reduction within the crypto market, rather than simply being "infected" by panic. In multi-asset portfolios, when traditional positions like gold and silver trigger margin pressures due to price drops, investors often need to free up cash at the portfolio level, forcing them to reduce or even liquidate positions in more liquid crypto assets. The high-frequency leveraged products and derivatives structures in the crypto market are numerous, and once prices breach key levels, chain liquidations can quickly amplify declines, making it clear that "what is being sold off is not faith, but the most liquid chips."
On-Chain Whales Accumulate XAUT: Structural Signals Amidst Panic
● On-Chain Details of XAUT Accumulation Addresses: Unlike the stampede in the OTC gold and futures markets, the on-chain world exhibited a starkly opposite local behavior. According to single-source on-chain data, during the severe fluctuations in spot and futures gold prices, a large address chose to accumulate 840 XAUT tokens, a move clearly visible on-chain. Following the traceable asset migration on-chain, it can be seen that funds were withdrawn from some high-volatility tokens and instead established positions in gold-linked tokens, reflecting a micro-level "structural defense."
● Why Embrace On-Chain Gold Amidst Gold's Turmoil: On the surface, since physical gold fell from $5,600 to the $4,600-$4,900 range, and silver experienced a single-day drop of 39%, turning to gold-linked tokens may not seem like an intuitive safe haven choice. However, for some institutions or large funds, tokens like XAUT possess both on-chain liquidity and gold anchoring properties, making it easier to quickly adjust positions and cross-platform collateralize through on-chain assets when traditional market margins are passively raised and OTC liquidity tightens. Thus, in the scenario of "price turmoil + soaring friction costs in traditional markets," they may actually hold certain appeal.
● A Microcosm of Institutions Reallocating Safe Haven Positions: It is important to emphasize that a single address accumulating 840 XAUT does not represent a general trend, but can be seen as a microcosm of institutions reallocating safe haven positions between traditional and crypto assets. When gold futures faced increased margins and spot liquidity discounts, while the crypto market underwent overall deleveraging, some funds chose to reconstruct "movable gold positions" on-chain. This is not a barometer of public sentiment but rather a small-scale vote by professional funds on the efficiency differences between new and old financial infrastructures.
Fed's Expectations Shift: Chain Liquidations After the Illusion of Rate Cuts is Shattered
● Reversal of Rate Cut Expectations as the Triggering Mainline: Multiple institutions and research perspectives point to the trigger point of this round of crashes as the same logic—the reversal of market expectations for Fed rate cuts. Previously, some trading structures were built on the assumption that "easing is imminent," embedding early pricing for rate cuts in everything from long-duration bonds to gold and high-beta crypto assets. When more hawkish signals emerged, and the policy path shifted from easing expectations to "maintaining high rates for a longer time," this assumption was collectively overturned, forcing asset prices to quickly hedge against mispricing.
● Impact of Sudden Changes in Rate Expectations on Pricing Framework: In traditional asset pricing models, higher and more persistent interest rates mean an increase in discount rates, directly compressing the valuation space for non-yielding assets like gold. Gold's drop from its high of $5,600 was partly due to the "rate cut premium" being violently stripped away in the short term. Similarly, for high-beta crypto assets like Bitcoin and SOL, a more aggressive rate path not only raises funding costs but also discounts the present value of "growth stories," leading to an overall decline in risk appetite, causing both asset classes to face revaluation under the common variable of rate expectations.
● The Scene of Traditional Financial Deleveraging: When the illusion of rate cuts is shattered, traditional financial institutions first need to rebalance risks in their own and client asset portfolios. High-leverage, non-essential allocations—including gold, silver, and some crypto assets—are often the first to be cut: margins are raised, risk limits are lowered, and VaR models require position reductions, with less liquid varieties being sold off at larger discounts. In this process, asset prices decline not because long-term stories are denied, but because in an environment of tightening rates and regulation, "whoever has the highest leverage and is least essential will exit first."
After the Eye of the Storm: Restructuring Correlations and New Cycle Bets
● Repricing of Correlation from Hedging to Synchronized Declines: In this round of events, gold and crypto assets transitioned from being viewed by the market as "partially hedging" to experiencing highly synchronized declines within key time windows. Gold fell from $5,600 to the $4,600-$4,900 range, Bitcoin dropped below $76,000, and SOL fell below $100, with precious metals and high-beta tokens being sold off together, forcing investors to reassess the correlation structure between the two under extreme rate shocks. In the short term, the linkage between "digital gold" and "physical gold" resembles a resonant response to the same macro variable rather than a simple substitution relationship.
● Long-Term Impact of Leverage Compression and Margin Increases: From a medium- to long-term perspective, the concentrated deleveraging triggered by CME's margin increases and tightening exchange risk controls may reshape the structure of market participants and volatility characteristics. High-leverage short-term funds are forced to clear positions on a large scale, leaving behind participants with lower sensitivity to funding costs and longer investment cycles. Coupled with higher margin thresholds, the short-term amplitude in extreme market conditions may converge, but this also means that price discovery will increasingly rely on the interplay of spot and medium- to long-term funds, with the market rhythm shifting from "high-frequency volatility" to "low-frequency dullness."
● Three Key Signals to Continuously Track: Looking ahead, the key to judging the pace of recovery in the crypto market lies in tracking three signal chains: first, whether the Fed's subsequent communications will guide the rate path to ease the current "high rates for longer" expectations; second, whether CME and other traditional markets will continue to raise or maintain existing margin levels, determining whether the deleveraging pace is "surgical" or "boiling the frog"; third, the on-chain safe haven flows, especially changes in funds related to tokens like XAUT that are linked to real assets, will provide clues for institutional position migrations after the new round of correlation repricing. Only after these three threads stabilize can the crypto market hope for a more orderly recovery and a new round of narrative reconstruction.
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