Bitcoin (BTC-USD) surpassed $90,000 on Wednesday, but some strategists cautioned that the price action is not necessarily a sign of a significant V-shaped recovery despite risk appetite in the stock market.
While the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) were aiming for a fourth straight day of gains as investors increasingly bet on a Federal Reserve rate cut in December, the world’s largest cryptocurrency appeared to be rising steadily after hitting $81,000 last Friday, its lowest level since April.
“Bitcoin and the Nasdaq Composite are normally highly correlated, but this correlation has broken down in recent weeks with a much sharper decline in the price of Bitcoin,” Torsten Slok, chief economist at Apollo Management, said in a note. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)
Despite the recent rebound, bitcoin is down about 28% from its all-time high of $126,000 in October.
Even though the fourth quarter is often the strongest for Bitcoin, “history shows that these gains rarely occur without a catalyst,” strategists at Singapore-based 10X Research said in a note.
Learn more about cryptocurrency movements and current market developments.
The market is expecting a 25 basis point rate cut in December, but Fed Chairman Jerome Powell’s message at a press conference after the Fed’s decision may be what matters most for the direction of cryptocurrency prices.
“Bitcoin, in particular, relies heavily on communication from the Fed rather than the mechanical act of cutting rates,” 10X Research said. “As a result, we do not view a December taper, if it occurs, as necessarily bullish for Bitcoin. And if the Fed does not taper, the risk of a stronger market sell-off likely increases.”
Learn more: Can you buy crypto with a credit card? See the pros and cons.
The firm pushed back on expectations that increased spending from the Treasury General Account (TGA), similar to the government’s current account, would boost markets, as such spending would now take place after the end of the U.S. government shutdown.
When the TGA last released about $522 billion, bitcoin initially fell about $14,000, or 15%, and only bottomed out after further spending, with a lag of more than two months between February and April 2025, according to 10X Research.
“This raises the possibility that the TGA-Bitcoin relationship is either lagging or more theoretical than causal,” according to the note, adding that the TGA remains elevated.
“If a similar two-month lag applied this time, assuming the relationship holds, Bitcoin could continue to consolidate until the end of January 2026 before a liquidity-related impact becomes visible,” the note said.
