Precious metals markets capitulated Friday in a historic liquidation event that wiped roughly $3 trillion in paper value, while Bitcoin decoupled from the macro panic to hold the $84,000 support level. Silver led the collapse, plummeting from an intraday high of $121 to flash-crash lows near $80 (-34%) before stabilizing.
Liquidity Evaporates in Metals
The sell-off began shortly after New York trading opened, triggered by reports that the Trump administration is preparing to nominate inflation-hawk Kevin Warsh as Federal Reserve Chair. Algorithmic selling intensified as BullionVault data showed gold rejecting the $5,600 psychological resistance, plunging $500 to trade near $5,100.
The rout was compounded by a simultaneous correction in the AI sector, with Microsoft and Oracle posting double-digit losses. This cross-asset margin call forced leveraged funds to liquidate winning positions in metals to cover tech losses.
The problem is volatility feeding on itself. As price swings intensify, liquidity thins. Banks and market makers struggle to manage risk. Ole Hansen, Saxo Bank
Bukele Diversifies Reserves
Amidst the volatility, El Salvador’s Central Reserve Bank confirmed the purchase of 9,298 troy ounces of gold for approximately $50 million. President Nayib Bukele acknowledged the move on X, stating, "We just bought this other dip."
Unlike previous sovereign dips, this acquisition targeted bullion rather than Bitcoin. However, on-chain data from Arkham Intelligence confirms El Salvador’s crypto strategy remains active, with the nation’s Bitcoin treasury now exceeding 7,547 BTC ($635 million).
Bitcoin Decouples
While silver posted its worst daily candle in decades, Bitcoin traded flat, hovering between $82,000 and $84,000. The asset’s resilience suggests a rotation of capital from traditional safe havens into digital bearer assets, as traders price in the liquidity implications of a potential Warsh Fed chairmanship.
