Bitcoin's Dip, Trump's Playbook, and the Bigger Picture

The answer lies in a calculated economic strategy that’s been playing out,  and it’s straight from Donald Trump's playbook. Despite what some may claim, this isn’t the end of the bull cycle. Instead, it's a coordinated move to push a specific economic agenda. But what’s the goal? And how far could the markets fall before bouncing back?

The Elephant in the Room: Trump and Tariffs

Trump’s economic strategy isn’t about maintaining short-term market stability — he’s focused on long-term U.S. strength. He’s shown he’s willing to let markets take a hit if it means achieving a bigger objective: reinforcing the U.S. economy by lowering yields and weakening the dollar.

Why aim for this? Lower yields mean cheaper government debt refinancing. A weaker dollar makes U.S. exports more competitive and attracts foreign investment. Combined with cheaper capital, this strategy fuels domestic manufacturing — a key pillar in Trump’s economic vision.

The Recession Playbook

Here’s the kicker: Trump may be intentionally forcing an economic downturn to achieve these outcomes. A strong dollar makes U.S. manufacturing less competitive, so tariffs and slowed growth effectively weaken it. By tightening economic conditions, Trump pressures the Federal Reserve to cut interest rates — a move that historically stimulates markets.

Markets are already signaling this shift. Traders are now pricing in 75 basis points of rate cuts by January instead of 50 — a sign that expectations for economic cooling are growing stronger.

Inflation Risks and Bitcoin’s Role

While tariffs can trigger stagflation — reminiscent of the 1970s — this scenario could surprisingly benefit Bitcoin. Back then, gold was the standout performer. This time, Bitcoin is poised to play a similar role as a hedge against inflation and economic uncertainty.

More likely, however, inflation will cool, prompting the Fed to cut rates early. In the short term, this would likely boost Bitcoin, while traditional equities stand to gain in the longer run.

Bitcoin and the Nasdaq: Tracking the Correlation

Bitcoin’s correlation with the Nasdaq currently sits at 0.77 — one of the highest levels in months. This tight link means that when market sentiment turns bearish, altcoins are hit first, followed by Bitcoin, and finally stocks.

That’s why altcoins have already seen the sharpest drops. If Bitcoin and equities continue to slide, deeper losses could follow. So where should investors look for support?

• S&P 500: Key support at 5,600 with stronger protection at 5,300.

• Bitcoin: Strong support at $70K — a prime zone for dollar-cost averaging (DCA).

Interestingly, a 2%+ decline in the DXY (U.S. Dollar Index) often aligns with Bitcoin bottoms or mid-cycle turns — and that’s exactly what we've seen recently. This dip could be a major buying opportunity.

Survive and Seize Opportunities

Don’t get shaken out — this isn’t a long-term bear market. Instead, treat this phase as a test of conviction. For each asset you hold, ask yourself: If I sold this for cash today, would I immediately buy it back?

• If the answer is YES — Hold.

• If the answer is NO — Sell and move on.

This mindset helps filter out low-conviction positions early, reducing emotional decision-making.

Remember, bear markets create opportunities. Low liquidity breeds mispricings — and those who survive this phase will be the ones primed to thrive when the next rally ignites. For now, focus on preserving capital and staying in the game.