A Memo from the Desk of Reality
TO: Subscribers who still believe in rational markets
FROM: Your increasingly disillusioned market observer
RE: The past 48 hours, or: How I learned to stop worrying and love the chaos
DATE: September 26, 2025
Let me start with the punchline: nothing makes sense anymore, and everyone's pretending it does.
Bitcoin sits at $111,488 this morning, down 1.4% today and 3.6% over the past week. The broader crypto market shed 2.2% in the last 24 hours, settling at $3.91 trillion. Meanwhile, Ethereum dropped 4.2% to $4,006, which apparently counts as one of the "steeper drops" even though we're still trading at levels that would've seemed insane two years ago. The mood? Anxious optimism. Or optimistic anxiety. Pick your cognitive dissonance.
Here's what actually happened: on September 23, $1.8 billion in leveraged crypto positions got liquidated. That's not a correction. That's a margin call massacre. And yet here we are, barely 72 hours later, with BTC still clinging to six figures like a drunk holding onto a lamppost, insisting everything's fine.
Over in Asia, the Hang Seng rallied more than 1%, with consumer tech stocks leading gains as bargain hunters stepped in after recent volatility. Translation: Beijing didn't announce new stimulus, so investors bought the dip anyway because... why not? We've conditioned an entire generation of traders to interpret "no news" as "bullish." The PBOC stays quiet? Rally. The PBOC speaks? Dump, then rally. The pattern doesn't need to make sense. It just needs to repeat.
U.S. stocks fell for a second straight session on Wednesday, though they remain close to all-time highs, with tech, industrials, pharma and telecom lagging while energy and consumer staples outperformed. Read that sentence again. Markets dropped but are still near records. That's the whole game right there. We're oscillating within a 2% band at the top of a mountain, calling it volatility, and pretending there's information content in the noise.
Thursday brought jobless claims data. Friday brings PCE inflation numbers. Traders are watching these releases while also monitoring troubling developments regarding a government shutdown. Ah yes, the shutdown threat. That perennial American tradition of fiscal brinksmanship that somehow never quite materializes but always manages to spook markets just enough to justify whatever move algos were planning anyway.
Let's talk about what's not being discussed: duration risk. With the S&P still up nearly 3% for September—a month that historically drops 4.2%—and bond yields doing their twitchy dance around 4.3%, portfolio managers are sitting on unrealized gains they don't trust and unrealized losses they can't admit to. The 60/40 portfolio survived 2022 through sheer institutional inertia, but it's still bleeding in slow motion. Nobody wants to rebalance into bonds when inflation's sticky. Nobody wants to sell equities when the Fed's easing. So they sit. And they wait. And they hope momentum carries them through quarter-end.
Meanwhile, Bitcoin's 200-day simple moving average sits at $103,700, and every trader with a technical analysis subscription is staring at that level like it's some kind of Maginot Line. If BTC touches it, the narrative becomes "healthy correction." If it breaks below, the narrative becomes "risk-off rotation." Same price action, different story, depending on what happens in the next 48 hours.
You want to know the real story? The crypto market wiped out its September gains, equities are flat to slightly red on a week that should feel worse than it does, and Asia's grinding higher on stimulus that hasn't been announced yet. We're trading momentum echoes and narrative fragments.
The playbook used to be simple: follow the Fed, watch the data, position accordingly. Now? The Fed's on autopilot until something breaks. The data's mixed enough to justify any position. And "accordingly" means front-running the front-runners who are front-running the people front-running central bank projections that keep getting revised.
I'll leave you with this: a retest of Bitcoin's 200-day moving average could trigger another unwind, but the deleveraging might actually stabilize prices for a sustained move higher. That's the quality of analysis we're working with now. Down might be good because it could lead to up. Markets crashing to $103K would be healthy. The biggest liquidation event in months barely left a mark.
We're not price discovery anymore. We're vibes with decimal points.
See you after the PCE print.
Attachments: None. There's nothing left to attach that would make this make more sense.