Bitcoin’s Plunge: A Drama in Three Acts, or Will Trump Save the Day?

by

My dear financial aficionados, gather ’round as we navigate the tempestuous seas of the crypto market, where the winds of uncertainty howl and the waves of volatility crash with abandon. After a single crimson candle-oh, the horror!-the crypto world has retreated to its late-December sanctuary, wiping away January’s fleeting triumphs like a careless maid with a dust rag.

From a technical perspective, darlings, this collapse hints at a deeper plunge into the abyss. As the world stage bristles with geopolitical theatrics, another October-esque crash for Bitcoin [BTC] looms like a melodramatic villain in a second-rate play. If history repeats itself, the 4.13% retreat we’ve witnessed this week might merely be the overture to a far grander tragedy, with Bitcoin potentially descending to a $60k denouement by early March.

The question on every lip, my dears, is: What are the odds of this financial farce deepening? Ah, the suspense!

Investors Flee Treasuries Like a Society Matron Avoiding a Scandal

Beneath the surface, a catalyst is brewing for our dear Bitcoin. A Danish pension fund, in a move as dramatic as a Coward plot twist, has announced it will jettison all its U.S. Treasuries by month’s end. The reason, you ask? “Credit risk” under President Trump, of course. How très chic!

To add to the melodrama, the U.S. dollar (DXY) has tumbled 0.8% this week, retreating to early-January levels, as whispers of a U.S.-EU trade war grow louder than a Coward wit at a cocktail party. Should this trend persist, it could serve as a rather convenient backstop for Bitcoin.

A Treasury sell-off, my darlings, is like a society divorce-it reveals where the moneyed set is truly headed. With inflation pressures mounting and geopolitical tensions simmering like a poorly timed soufflé, the real returns on Treasuries are shrinking faster than a Coward one-liner at a dull party. Investors, ever the pragmatists, are selling and seeking assets that can keep pace with rising prices. Enter Bitcoin, stage left.

Thus far, however, the money has flowed into metals, which are gleaming like a Coward leading lady. Yet, one key indicator suggests this trend may soon shift, giving Bitcoin a chance to avoid a dramatic crash.

Market Flows Hint Bitcoin Might Just Dodge the Bullet

Tariffs, my dears, are proving to be a double-edged sword-rather like a Coward protagonist’s sharp tongue. From a macro perspective, Trump’s maneuvers, such as the Venezuela intervention and the Greenland plan, could funnel substantial capital into markets, a decidedly bullish turn of events.

However, the short-term impact is as clear as a Coward bon mot. The U.S. 10-year Treasury yield has soared to 4.3%, its highest since early September. At first glance, one might think higher yields would cap risk flows, including Bitcoin. But, my darlings, this yield is the ultimate indicator in our current financial drama.

As funds jettison U.S. Treasuries, yields rise, making new bond issuance as attractive as a Coward leading man. For Trump, though, high yields on his massive debt load are the last thing he desires, especially in a midterm election year. Hence, analysts dub the 10-year yield the ultimate indicator.

Historically, when yields enter Trump’s “warning zone,” he typically pauses tariffs to cool the bond markets. If this pattern holds, an October-style breakdown for Bitcoin to $60k seems as premature as a Coward curtain call before the final act.

Final Musings

  • Bitcoin’s downside risk lingers, but a deeper crash remains unconfirmed. Technical weakness and geopolitical theatrics continue to pressure risk assets, darlings.
  • Rising Treasury yields could force a policy shift that supports Bitcoin. As yields enter Trump’s “warning zone,” a tariff pause becomes as likely as a Coward quip at a society gathering, stabilizing risk assets.

Read More

2026-01-21 16:07