Has the Real Reason for Bitcoin’s Five-Month Decline Been Revealed? Analyst Points to China!

Bitcoin and altcoins have experienced a major correction since October. Bitcoin has fallen by approximately 50% from its October peak of $126,000, while altcoins are also having arguably their worst days.

In contrast, gold hit new records during this period. While the divergence between Bitcoin and gold continues to be discussed, some argue that China is the reason for this.

According to the analyst, the reason for the $BTC decline is that the Chinese currency is driving global liquidity.

According to Chris Tipper, an analyst at the Australian-based crypto investment company Ainslie Wealth, the recent surge in global liquidity is largely driven by China, explaining why Bitcoin is correcting while gold is rising.

According to Tipper, this divergence between Bitcoin and gold stems from China’s dominant role in shaping global liquidity flows, creating a complex capital allocation environment that puts cryptocurrencies at a disadvantage compared to gold.

Tipper said the People’s Bank of China (PBoC) injected a similar amount of liquidity in 2025 as it did in 2023, and that another $1 trillion is expected in 2026.

However, due to the ban on $BTC and cryptocurrency investments in China, this capital is flowing into gold and other real-world assets (RWA) rather than Bitcoin.

“…Therefore, leaving aside China’s contribution and just looking at Western liquidity, which Bitcoin actually reacted to, the momentum peaked in October and has been slowing since then.”

Gold understood this immediately. It caught on to China’s liquidity demand and reached all-time highs.”

At this point, Tipper argues that Bitcoin’s recent decline stems not from a breakdown in its relationship with global liquidity, but from the diversion of that liquidity into different areas.

Tipper predicts that $BTC will enter a recovery phase when Western liquidity momentum is driven by factors such as FED intervention or a weaker dollar.

*This is not investment advice.