Bitcoin Surges Amid Economic Turmoil — Bullish Breakout or Bearish Mirage?

As traditional markets wobble, Bitcoin defies gravity—climbing while everything else cracks. The digital gold narrative gains momentum as institutional money seeks shelter from inflationary storms.

Decoupling From Legacy Systems

Bitcoin's recent surge showcases its growing role as a non-correlated asset. While stocks bleed red and bonds tremble, crypto markets flash green—proving once again that decentralized networks operate on different economic fundamentals than traditional finance.

The Hedge Against Failure

When central banks print trillions and governments spend beyond means, Bitcoin's fixed supply becomes its superpower. No emergency meetings, no bailouts—just code-enforced scarcity that makes goldbugs look like amateur hour.

Wall Street's worst nightmare: an asset that actually performs better when their models break. Maybe they should've spent less time shorting crypto and more time understanding it.

Higher inflation and fewer jobs are not great for the U.S. economy, so it's no surprise that the word "stagflation" is starting to creep back into macroeconomic commentary.

Against this backdrop, bitcoin—considered a risk asset by Wall Street—continued grinding higher, topping $116,000 on Friday and almost closing the CME futures gap at 117,300 from August.

Not a surprise, as traders are also bidding up the biggest risk assets: equities. Just take a look at the S&P 500 index, which closed at a record for the second day on the hope of a rate cut.

So how should traders think about BTC's price chart?

To this chart enthusiast, price action remains constructive, with higher lows forming from the September bottom of $107,500. The 200-day moving average has climbed to $102,083, while the Short-Term Holder Realized Price — often used as support in bull markets — rose to a record $109,668.

Bitcoin-linked stocks: A mixed bag

However, bitcoin's weekly positive price action didn't help Strategy (MSTR), the largest of the bitcoin treasury companies, whose shares were about flat for the week. Its rivals performed better: MARA Holdings (MARA) 7% and XXI (CEP) 4%.

Strategy (MSTR) has underperformed bitcoin year-to-date and continues to hover below its 200-day moving average, currently $355. At Thursday's close of $326, it's testing a key long-term support level seen back in September 2024 and April 2025.

The company’s mNAV premium has compressed to below 1.5x when accounting for outstanding convertible debt and preferred stock, or roughly 1.3x based solely on equity value.

Preferred stock issuance remains muted, with only $17 million tapped across STRK and STRF this week, meaning that the bulk of at-the-money issuance is still flowing through common shares. According to the company, options are now listed and trading for all four perpetual preferred stocks, a development that could provide additional yield on the dividend.

Bullish catalysts for crypto stocks?

The CME's FedWatch tool shows traders expect a 25 basis-point U.S. interest-rate cut in September and have priced in a total of three rate cuts by year-end.

That's a sign risk sentiment could tilt back toward growth and crypto-linked equities, underlined by the 10-year U.S. Treasury briefly breaking below 4% this week.

Still, the dollar index (DXY) continues to hold multiyear support, a potential inflection point worth watching.