Bitcoin Price Analysis: BTC Slumps As Trump-Xi Talks Loom

Bitcoin (BTC) registered a sharp drop on Monday as it lost momentum after reaching an intraday high of $116,410. The flagship cryptocurrency is down nearly 2% over the past 24 hours, trading around $114,479. 

BTC has witnessed its weakest October since 2014. October has historically been a bullish month for Bitcoin and the cryptocurrency market, with gains recorded in 10 out of the past 12 years. 

Strategy Announces 390 BTC Purchase 

Strategy purchased 390 BTC worth $43 million last week, its largest purchase in nearly a month. The latest acquisition took Strategy’s Bitcoin holdings to 640,800 BTC, valued at $73.6 billion. Strategy shares soared following the purchase, rising 1.9% to $294, according to data from Yahoo Finance. The firm’s stock had fallen 4.8% over the past month. The latest acquisition was funded with proceeds from the issuance of the company’s preferred shares. Strategy’s latest purchase comes as BTC hovers around a two-week high thanks to easing trade tensions between the US and China. 

Strategy has historically issued common shares at a premium relative to its Bitcoin holdings in an effort to grow its holdings. However, the company has adopted a different approach in recent weeks, leaving its primary source of funding untouched. Strategy has not issued common stock since September 29, when it announced a $22 million Bitcoin purchase. The company stated at the time that it had raised $128 million. 

Strategy Hit By Junk Rating 

S&P Global Ratings has hit Michael Saylor’s Strategy Inc. with a B- junk rating, placing it six positions below investment grade. According to a report, the rating reflects Strategy’s deep concentration in Bitcoin and limited diversification. S&P also flagged concerns about liquidity and risk-adjusted capitalization. Strategy has transformed itself from an enterprise software firm into a proxy for BTC. The firm holds 640,808 BTC, valued at around $74 billion at current prices. 

According to S&P Global, Strategy is vulnerable to market changes, thanks to its lopsided exposure to BTC. The agency stated that its primary software business makes very little money and would provide an inadequate defense in the event of declining cryptocurrency prices. Strategy reported $37 billion in negative operating cash flow during the first half of 2025, and maintains minimal dollar reserves, with most of its treasury in BTC. S&P also highlighted liquidity and currency mismatch risks. 

Strategy holds $8 billion in USD-denominated convertible debt, set to mature between 2028 and 2031. Additionally, preferred stock dividends exceed $640 million annually. A prolonged bear market could make it difficult for Strategy to meet its obligations. 

Bitcoin ETPs Rally 

Crypto ETPs have registered a sharp recovery as investor sentiment improved following lower-than-expected inflation numbers. According to a report by CoinShares, crypto ETPs registered $921 million in inflows last week, easily offsetting the $513 million in outflows the week prior. According to the CoinShares report, the primary drivers of this resurgence were rising expectations of a rate cut by the Federal Reserve and softer-than-expected CPI data. CoinShares head of research James Butterfill stated, 

“The ongoing US government shutdown, and the resulting absence of key macroeconomic data, has left investors with little guidance on the direction of US monetary policy.”

Bitcoin, the primary driver of the outflows a week earlier, recouped its losses after recording $931 million. Despite registering substantial inflows, Bitcoin ETPs’ year-to-date stood at $32.2 billion, around 38% lower than the $41.6 billion recorded last year. 

Bitcoin (BTC) Price Analysis 

Bitcoin’s (BTC) latest rally lost momentum on Monday after reaching an intraday high of $116,410. The flagship cryptocurrency rallied on Sunday, rising nearly 3% to cross $114,000 and settle at $114,548. The price reached $116,410 on Monday but lost momentum and settled at $114,087, ultimately dropping 0.40%. BTC is marginally up during the ongoing session, trading around $114,341. 

BTC has had a difficult October, a month widely regarded as bullish for crypto. On average, Bitcoin has delivered around 20% monthly returns during this period. The flagship cryptocurrency jumped 60% in October 2013, 50% in 2017, and 40% in 2021. However, the trend has reversed this year, with BTC losing momentum after surging to record levels. 

BTC’s recovery has eased sell pressure and improved market sentiment. Additionally, a significant change is visible after the downturn, which compelled miners to sell their BTC to cover operating expenses. Analysts have noted that miner holdings are leveling out, along with a notable improvement in hashprice metrics. BTC is currently trading between $110,000 and $118,000, with resistance around $120,000. Big on-chain wallets are consistently accumulating. This, along with miner reserves stabilizing, indicates reduced sell pressure. Transaction costs have also risen, increasing miner profitability and allowing them to retain their BTC instead of selling. 

Markets are expected to remain cautious ahead of the FOMC meeting, with a rate cut widely expected. Overall market sentiment has improved, with the Fear & Greed Index in “neutral” territory.

BTC ended the previous weekend in positive territory, rising 1.37% on Sunday and settling at $108,676. Buyers retained control on Monday as the price rose nearly 2% to reclaim $110,000 and settle at $110,568. BTC surged to an intraday high of $114,082 on Tuesday. However, it lost momentum after reaching this level and dropped 1.99% to $108,362. Selling pressure persisted on Wednesday as BTC fell 0.72% to a low of $106,639 before settling at $107,585. Despite the selling pressure, the price recovered on Thursday, rising over 2% to cross $110,000 and settle at $110,116. BTC continued pushing higher on Friday, rising almost 1% to $111,042.

Source: TradingView

Price action remained positive over the weekend, with BTC rising 0.56% on Saturday and settling at $111,666. Bullish sentiment intensified on Sunday thanks to positive macroeconomic developments, including positive trade talks between the US and China, and rising odds of a rate cut. As a result, BTC rose 2.58% to cross $114,000 and settle at $114,548. The flagship cryptocurrency reached an intraday high of $116,410 on Monday. However, it lost momentum after reaching this level and settled at 114,087, ultimately dropping 0.40%. The flagship cryptocurrency is up 0.62% during the ongoing session, trading around $114,800.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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