Bitcoin’s "Reality Check": Volatility vs. The Trump Trade
The crypto honeymoon is facing a stormy wake-up call. After hitting a staggering $125,000 peak in late 2025, Bitcoin has surrendered its post-election gains, recently bruising the $61,000 mark.
What’s Shaking the Market Today?
The volatility isn't just "crypto being crypto"—it’s a collision of macro forces:
The "Warsh" Factor: The nomination of Kevin Warsh as Fed Chair has investors fearing a hawkish "liquidity squeeze" as he eyes a leaner Fed balance sheet.
Thin Liquidity: Market depth has dried up by nearly 40%. With fewer orders on the books, even small trades are triggering erratic "flash crashes."
The Tariff Trap: Lingering fallout from 2025 China tariffs continues to drain the leverage that once fueled the rally.
Is the Bottom In?
Despite the gloom, today (Feb 7, 2026) shows a resilient relief rally back above $70,000. While the Fear & Greed Index is at a chilling 6 (Extreme Fear), "whales" are reportedly slowing their sell-offs.
Bottom Line: The "Trump Trade" provided the spark, but the market is now demanding actual utility and stable macro conditions to keep the fire burning.
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