Will Bitcoin Rise Or Fall Again? QCP Questions Trump-Fueled Rally

Bitcoin surged past $95,000 during low-liquidity trading hours on Sunday after US President Donald Trump made a major announcement. The formation of a US Crypto Strategic Reserve, including Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA), set the market ablaze with speculation. Many traders viewed this as a defining moment, one that could solidify crypto’s place in the U.S. financial system, while others remained wary, questioning whether the rally could sustain itself beyond the immediate reaction. Among those skeptical is QCP Capital.

A Well-Timed Political Bitcoin Play?

The timing of Trump’s announcement is difficult to ignore. Throughout the past week, risk assets faced mounting pressure as global markets reacted negatively to a series of economic and geopolitical developments. Trump’s newly imposed tariffs rattled investor confidence, while shaky Ukraine-Russia peace talks created additional uncertainty. Stock market volatility intensified, weighing heavily on sentiment across the financial sector.

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Bitcoin broke below its multi-month range, showing signs of weakness before Trump’s announcement. The sudden announcement was a stark contrast to the downward trajectory risk assets had been following.

QCP Capital highlighted the political strategy behind the move: “For a president who thrives on being the market’s hero, last week’s risk asset performance performance was anything but inspiring. His slew of new tariffs and shakier than expected Ukraine-Russia peace talks rattled investor confidence. So, while the timing of the SBR was somewhat unexpected, the political calculus was clear — Trump needed a win before his approval ratings starts slipping, a metric he likely takes very personally.”

However, questions remain as to whether this move represents a genuine shift in policy toward long-term crypto adoption or simply a well-timed announcement aimed at stabilizing sentiment before further economic strain emerges. While Bitcoin’s rapid ascent over the weekend excited traders, QCP Capital remains unconvinced that this rally represents a meaningful breakout. The firm pointed to several key market signals that indicate Bitcoin is not yet out of the woods.

QCP Capital cautioned: “Are we back in the game? Not quite. BTC is still trading near the bottom of its multi-month range and frontend crypto vols are still relatively elevated with both majors still reflecting a Put Skew till end-March. The VIX is also elevated, signaling broader market unease in risk assets overall, particularly after the recent tariff escalations from the US administration.”

Lessons From The Past: The ‘Xi Candle’ Comparison

For seasoned traders, the weekend’s price action is reminiscent of a historical event in the crypto market—the infamous Xi Candle of 2019. Prominent crypto analyst Cold Blooded Shiller took to X to draw comparisons between the two events.

Reflecting on the Xi Candle, Cold Blooded Shiller recalled how Bitcoin had been in a prolonged downtrend, trading at fresh lows with market sentiment at rock bottom. Then, seemingly out of nowhere, Chinese President Xi Jinping announced that China should embrace blockchain technology. The result was a massive short squeeze, with Bitcoin skyrocketing by 40% in just two days. Traders at the time believed it marked the beginning of a new bullish era for crypto.

“Sentiment was very quick to adjust. You’ll be surprised (not) to hear that it didn’t take much back then to shape the whole mindset of Twitter into the positives and ability for the market to now have an infinite bid,” he wrote.
However, the euphoria was short-lived. Several weeks later, China backtracked on its pro-blockchain rhetoric, implementing fresh crackdowns on crypto exchanges and warning investors about the risks of digital assets. Bitcoin’s gains slowly eroded, with price action reversing over the following month and ultimately dipping below pre-announcement levels.

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“We did not immediately reverse the candle. It actually took many weeks to do that, which made it all the more painful for those trading it or those who had their bullish bias,” Cold Blooded Shiller recalled.

The similarities between the Xi Candle and Trump’s Crypto Reserve announcement are striking. Both events followed prolonged periods of market weakness, both saw a dramatic shift in sentiment almost overnight, and both created a new bullish narrative that was widely embraced by the market. The key question now is whether Trump’s announcement will lead to a sustained trend shift or if, like the Xi Candle, it will eventually fizzle out, leaving late buyers trapped at the top.

Key Events To Watch This Week

Bitcoin’s ability to maintain its gains or extend higher will likely depend on key macroeconomic and regulatory developments in the coming days.

On Wednesday, markets will receive the latest Purchasing Managers’ Index (PMI) data, a crucial economic indicator that could influence expectations for Federal Reserve policy. If PMI data shows signs of economic weakness, it could increase speculation about potential rate cuts, which may provide a tailwind for risk assets, including Bitcoin. However, stronger-than-expected data could reinforce the view that the Fed will maintain its restrictive policy stance, potentially pressuring crypto and equities alike.

Friday brings the release of the Non-Farm Payrolls (NFP) report, a key employment indicator that has historically influenced market sentiment. A strong jobs report could signal continued economic resilience, reducing the likelihood of near-term rate cuts, which could negatively impact Bitcoin. Conversely, a weaker-than-expected report could fuel risk-on sentiment, further supporting BTC’s momentum.

Also on Friday, the White House Crypto Summit is expected to provide critical insights into the future of the US Crypto Strategic Reserve. If tangible announcements emerge, BTC could rise further. However, if the event fails to deliver meaningful policy direction, the market could react negatively, leading to increased volatility.

As QCP Capital put it, “Just when we think Trump has exhausted his cards, he may still have more surprises up his sleeve. Will this be the push toward that elusive all-time high? We’ll be watching.”

At press time, BTC traded at $90,352.

Featured image created with DALL.E, chart from TradingView.com