Gold and silver are not only attracting capital away from crypto, but they are also drawing the attention of retail, as evidenced by the increasing discussions about precious metals on social media.
However, analysts suggest that the fear of missing out (FOMO) among retail traders often signals that a market top may be near.
Capital and attention are shifting from crypto to precious metals
Earlier this week, the analytics company Santiment highlighted that the combined market capitalization of the top 12 stablecoins has decreased by 2.24 billion dollars. This decline occurred alongside the drop in Bitcoin (BTC), while gold and silver were reaching their historical highs.
The concurrent rise in safe-haven assets and the decrease in market capitalization of stablecoins suggests a shift towards reduced risk in investors' positioning. This contraction indicates that capital is leaving the crypto ecosystem instead of remaining on standby.
"Investors choose safety over risk. When uncertainty increases, money often flows into assets considered stores of value in times of economic stress, rather than into volatile markets like crypto," the post reads.
During typical market pullbacks, traders often rotate from digital assets to stablecoins while waiting for new entry opportunities. However, a decrease in stablecoin capitalization suggests that investors are redeeming stablecoins for fiat currency instead of preparing to buy on dips.
In addition to capital, attention is also shifting. In a separate post on X (formerly Twitter), Santiment noted that retail traders' attention has become increasingly fragmented, with interest shifting between crypto and traditional assets depending on short-term price momentum.
In the social circles of crypto throughout January, traders' attention changed week by week. In the first week of January, the crypto markets rose in a climate of muted discussion, while participants slowly returned after the holiday period.
In the second week, attention shifted to gold after the metal hit new historical highs, with crypto growing in parallel. In the third week, Bitcoin dominated online conversations as prices pulled back, attracting retail buyers intent on buying the dips. In this context, the crypto market experienced a sharp decline.
In the fourth week of January, social interest shifted again, this time towards silver. The precious metal also surpassed its historical highs as traders rushed to expose themselves, while the crypto markets remained in a sideways phase.
Santiment added that crypto traders are typically known for rotating between different sectors within the digital asset space, such as meme coins, AI tokens, or blue-chip assets. However, current data shows a broader change in behavior.
"But now, retail shows it is ready to change sectors entirely, with social data showing how gold, silver, and even stocks are attracting increasing interest, wherever the most recent pumps appear," the team explained.
The hunt for momentum raises concerns about the market peak of silver.
Meanwhile, Santiment highlighted that widespread enthusiasm among retail is often a contrary signal. Retail FOMO usually arrives late during a bull run when prices are already high. When common investors rush in emotionally, it often signals that the market has likely reached a top.
"When retail crypto starts with FOMO, that’s often when the tops appear. An example was today, when silver hit new records surpassing $117.70, only to drop below $102.70 just two hours after the retail hype peak. To trade successfully, try to move counter to where the crowd is looking."
In addition to this, Benjamin Cowen, founder of Into The Cryptoverse, also predicted that silver could see a blow-off top between February and May.
According to the latest data, the price of silver stands at $113.7 per ounce, up 1.3% in the last day. It remains to be seen if the metal will indeed register a top in the near term.
