Bitcoin: Its Current Price Action and What the Data *Really* Says
Bitcoin's Latest Bounce: A Dead Cat or Real Recovery?
Bitcoin's recent price action has the crypto world buzzing. After bottoming out around $81,000 last Friday—its lowest point since April—it surged back above $90,000 on Wednesday. As of 12:48 AM UTC, it was sitting at $91,218.77, a 0.86% increase, or $781.41. That's a decent jump, but let's not break out the champagne just yet.
The broader context is crucial. We’re still talking about a 28% drop from Bitcoin's all-time high north of $126,000, achieved just last month. And this mini-rally is happening against the backdrop of a $1 trillion cryptocurrency selloff. So, is this a genuine recovery, or just a temporary bounce before another leg down?
One factor being closely watched is the potential for a December rate cut by the Fed. The market seems to be pricing in a 25 basis point reduction. However, 10X Research is throwing some cold water on that optimism, suggesting that a rate cut might not be bullish for Bitcoin and that a failure to cut rates could trigger an even steeper sell-off. It's a classic "buy the rumor, sell the news" scenario, amplified by crypto's inherent volatility. And this is the part of the report that I find genuinely puzzling. Why would the market interpret a rate cut negatively? One could assume the correlation between Bitcoin and rate cuts would be a positive one.
The Trump Factor: More Than Just a Meme?
Then there's the political angle. Economist Paul Krugman is out there arguing that Bitcoin's recent woes are tied to the "unraveling of the Trump trade." It's a catchy narrative, especially given Trump's past pro-crypto stances. His administration considered a government Bitcoin reserve, and he even signed an executive order in August allowing U.S. citizens to invest retirement savings in crypto. (Whether that was good policy is a debate for another day.) According to Economist Paul Krugman says Bitcoin’s crash shows the ‘unraveling of the Trump trade’ - Fortune, the former president's waning power is directly correlated to Bitcoin's recent struggles.
Let's not forget the pardon of Binance founder Changpeng Zhao, who pleaded guilty to violating U.S. money laundering laws. And, of course, Trump himself is sitting on an estimated $870 million in Bitcoin. That's a substantial holding. American Bitcoin, the mining company backed by his sons, even went public on the Nasdaq in September, reaching a $5 billion valuation.
The White House, through spokesperson Kush Desai, is predictably pushing back against the idea that Trump's political fortunes can move the Bitcoin price. But can we really dismiss the "Trump trade" so easily? After all, his crypto holdings once made up about $3 billion of his net worth back in March. That's a significant chunk of change riding on the success of Bitcoin.
It's worth noting the historical precedent. When the Treasury General Account (TGA) last released roughly $522 billion, Bitcoin initially fell about $14,000 (15%) and only bottomed after further spending took place, with a lag of over two months between February and April 2025. Past performance doesn't guarantee future results, but it does offer a potential roadmap.
The correlation between Bitcoin and the Nasdaq Composite, normally quite strong, has also broken down recently. This divergence raises questions about what's really driving Bitcoin's price. Is it macroeconomic factors, political sentiment, or something else entirely? The data is, shall we say, inconclusive.
The Data's Murky Message
The fourth quarter is often the strongest for Bitcoin, but gains rarely come without a catalyst. Right now, the catalyst is supposedly the potential rate cut, but as 10X Research points out, that might be a false hope. We need to be wary of narratives that oversimplify complex market dynamics. The increase isn't necessarily a sign of a meaningful V-shaped recovery.
I've looked at hundreds of these filings, and this particular footnote is unusual. What does all this mean? It means we need to approach this "recovery" with a healthy dose of skepticism. The market is volatile, the political landscape is uncertain, and the data is, at best, ambiguous.
A Reality Check
Bitcoin's bounce is more like a Rorschach test. People see what they want to see. But the numbers tell a more nuanced story—one of caution, not unbridled optimism. The Trump trade may be unwinding, or it may be poised for a comeback. The Fed may cut rates, or it may not. And Bitcoin may rally to new highs, or it may crash back down to earth. Place your bets accordingly.