Usman Salis
⬤ Bitcoin keeps slipping even though interest rates are falling, a rare mismatch that traders in both traditional markets and crypto are noticing. Lower rates normally let investors borrow cheaply and push money into riskier bets - yet Bitcoin has drifted back to the mid-80,000 dollar range after reaching higher levels earlier in the year. The pullback is clear even while funding costs decline.
⬤ Plot Bitcoin against the Secured Overnight Financing Rate plus the picture sharpens - the rate line slopes downward while Bitcoin weakens. The usual rule - cheap credit lifts crypto - has stopped working. Cash is not moving into speculative positions - instead, appetite for risk is shrinking. Bitcoin posts lower peaks and its moves turn jumpy as momentum leaks away.
One trader summed it up - saying that cheap money is now used to patch existing debt, not to take on bigger bets.
⬤ The core problem is not the rate level but the fact that balance sheets are shrinking. When funds and traders lower leverage instead of raising it, assets that depend on borrowed money lose support. Sharp swings in both Bitcoin prices but also funding gauges show how fragile the backdrop remains, even when policy looks helpful on the surface.
⬤ The lesson reaches past crypto because it undercuts a simple belief - that rate cuts always lift risky assets. If rates fall yet prices keep dropping, the deeper cause is usually a credit squeeze and a quiet drain of liquidity, factors that outweigh the headline policy move. Bitcoin's recent action shows that leverage conditions and balance-sheet health steer price trends more than the rate number itself and those forces will decide how volatile markets become and where capital heads next.
Usman Salis
