Bearish Sentiment Hits Extreme Levels while Trump Targets Fed Independence

Welcome to The Roundup!

This week's Bitcoin insights include 👇

• Bitcoin sentiment hits bearish extremes suggesting potential tactical bottom

• Trump fires Fed governor Lisa Cook questioning Fed independence

• Gold breaks out while Bitcoin consolidates in (bearish?) range

Let's jump in!

1️⃣ Bitcoin Sentiment Hits Bearish Extremes - Tactical Bottom?

Multiple sentiment indicators are flashing bearish extremes, suggesting Bitcoin may be approaching a tactical bottom. According to Bitwise's Cryptoasset Sentiment Index, nearly every metric has turned negative—from exchange inflows to funding rates to ETF flows.

The data tells a compelling contrarian story. Only 10% of altcoins outperformed Bitcoin last week, including Ethereum. Short-term holders are increasingly realizing losses (historically a signal that "seller exhaustion" may be near).

What changed? The sentiment shift reflects macro uncertainty, gold's breakout drawing safe-haven flows away from crypto in general, and general flat/downward price momentum over the last few months.

Exchange inflows have also spiked while funding rates flipped negative (a classic sign of market capitulation).

Why this matters? Extreme bearish sentiment often marks tactical bottoms. While further downside remains possible, the current setup mirrors previous intra-cycle lows. These sentiment extremes create asymmetric risk-reward opportunities for patient institutional capital looking to stack more Bitcoin.

2️⃣ Trump Fires Fed Governor - But Can He Actually Do That?

President Trump made history this week by attempting to fire Federal Reserve Governor Lisa Cook—the first time in the Fed's 111-year history a president has tried to remove a central bank governor. Cook responded saying Trump has no authority to fire her.

For those of you who missed the news, we cover the entire debacle in our video below 👇

Trump cited allegations that Cook made false statements on mortgage applications. But under federal law, Fed governors can only be removed for cause, and what constitutes "cause" has never been clearly defined.

Cook has sued Trump, arguing his rationale is based on "unsubstantiated allegations." If Trump succeeds, he could reshape the Fed's governing board for years, potentially adding a third Trump appointee to influence rate policy.

The bigger picture? This represents yet another direct assault on Fed independence. If Trump politicizes the Fed, expect more erratic monetary policy—which could benefit Bitcoin as a hedge against broader market uncertainty.

3️⃣ Gold Breaks Out - Is Bitcoin Next in Line?

While Bitcoin consolidates below psychological resistance, gold smashed through $3,500 to hit fresh all-time highs this week.

Gold reached $3,545 per ounce Monday morning while Bitcoin set new local lows at around the $107k mark.

The divergence highlights each asset's distinct role. So far in 2025, gold is up more than 30% and Bitcoin only ~17%. André Dragosch of Bitwise suggests gold works best as protection against stock losses, while Bitcoin acts as a counterweight to any bond market stress.

But here's the twist: Bitcoin historically follows gold's macro moves with a lag. Larry Lepard points to gold's breakout above $3,500 as historically preceding major Bitcoin rallies, potentially targeting $140,000.

This setup follows a familiar pattern: gold validates the hard asset narrative, then Bitcoin captures that momentum.

🎯 The Final Word

This week revealed the power of contrarian positioning. While Bitcoin sentiment hits bearish extremes and institutional chaos unfolds at the Fed, smart money recognizes these as the conditions where asymmetric opportunities emerge.

Sentiment extremes don't guarantee immediate reversals, but they create the setup for patient capital to outperform.

*P.S. - While correlations break down and central banks face political pressure, Bitcoin's fundamentals remain unchanged: 21 million coins, unstoppable network, and growing institutional adoption.

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