RJ Hamster
Bitcoin is a pressure valve (and that’s why it…
February 06, 2026 | Read Online
Bitcoin just rallied 11% to above $70K, and everyone’s celebrating. But this violent swing actually proves something most people completely miss about Bitcoin’s real purpose — and why that matters more for trading it than any maximalist debate.
While crypto Twitter argues whether this rally proves Bitcoin is “digital gold” or just another speculative bubble, I’m watching something completely different.
These massive swings aren’t accidents or market inefficiencies.
They’re exactly what Bitcoin was designed to do.
The Speculative Pressure Valve
Here’s what I think Bitcoin really is: the most elegant financial engineering solution ever created.
Think about how commodity markets work.
The last bushel of corn, the last barrel of oil gets priced by the last marginal buyer. That final person willing to pay whatever price can drive up food costs across entire nations. We saw this during the Arab Spring in 2007-2008 when speculative money pulled wheat and food prices higher, destabilizing governments.
So here’s the trillion-dollar question: how do you keep speculative money and excess liquidity out of markets that actually matter — like housing, food, and energy?
You give speculators a frictionless playground where they can leverage up, chase narratives, and blow themselves up without affecting the real economy.
Bitcoin isn’t digital gold. It’s a speculative pressure valve.
The Part Everyone Misses
When Bitcoin crashes from $100K to $70K in a few weeks, economies don’t crash. When it rallies 11% in hours like today, food prices don’t spike. Just the price of this digital asset moves while the necessities of life stay relatively stable.
That’s not a coincidence. That’s the entire point.
Bitcoin absorbs all the gambling impulses, excess liquidity, and leverage-driven speculation that would otherwise distort markets people actually need to survive. It’s a $70,000 video game token that keeps your grocery bills from going parabolic every time hedge funds want to play.
How the Math Works
What makes this insight actionable is that there’s a direct mathematical relationship between market momentum, leverage expansion, and Bitcoin pricing.
I track a momentum screener that measures the statistical probability of market reversals by looking at breakout versus breakdown patterns across thousands of stocks.
When this signal goes positive, it tells me leverage is returning to the system. When it goes negative, leverage is unwinding.
The correlation with Bitcoin is almost perfect.
When my momentum signal shows leverage expanding, Bitcoin runs. When it shows leverage contracting, Bitcoin gets destroyed.
Today’s 11% rally isn’t happening because Bitcoin suddenly became more valuable — it’s happening because speculative pressure found its way back into the system, and Bitcoin is exactly where it’s supposed to go.
What You’re Actually Trading
This isn’t about being a Bitcoin bull or bear. This is about understanding what you’re actually trading.
Bitcoin will crash again. Probably harder than most people expect, maybe down to the $40-45K range. And then it’ll rally again, possibly to levels that seem impossible — $150K wouldn’t shock me in the right liquidity environment.
Both moves will be driven by the same force:leverage and speculative capital flowing into and out of this frictionless pressure valve.
The question isn’t whether Bitcoin is going to the moon or zero. The question is: can you read the signals that tell you when the pressure valve is filling up versus when it’s getting squeezed dry?
Reading the Signals
The beauty of treating Bitcoin as a liquidity asset rather than a revolutionary technology is that it becomes completely predictable within certain frameworks.
When institutional momentum is expanding and my screener shows positive readings, that’s when Bitcoin becomes interesting on the long side. When momentum goes negative and leverage starts unwinding, that’s when you either step aside or look for short opportunities.
When the readings hit extreme levels in either direction — that’s when the biggest moves happen. Today’s rally fits perfectly into this pattern.
What Happens Next
I’m not buying Bitcoin at $70K. But I’m also not going to stand here and tell you this rally is “wrong.”
This is exactly what Bitcoin does. It absorbs speculative energy like a sponge. Sometimes that sponge gets squeezed dry, sometimes it gets saturated. The violent swings aren’t market dysfunction — they’re the entire feature.
Bitcoin’s job isn’t to be a stable store of value.
Its job is to be unstable enough that all the speculation and leverage that would otherwise mess up housing and food markets goes there instead.
The key is having a framework to trade these momentum shifts as they happen.
I call these signals live, Monday through Friday, in the TheoTrade Chatroom — tracking the mathematical relationships between institutional leverage, market momentum, and Bitcoin moves.
While everyone else debates whether Bitcoin is the future of money, we’re trading the pressure valve cycles that actually drive its price.
Bitcoin’s 11% rally today doesn’t make me a believer. It makes me more convinced than ever that this thing operates exactly like I thought: pure speculation dressed up as digital revolution.
And if you know how to read the pressure valve signals, that’s all you need to trade it profitably.
Stay Positive,
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