Can you lose both muscle and fat while building FTP? Or is my scale useless?

I had a very similar experience; losing about 20 lbs from 6/5/18 thru 10/27/18. My total body weight went from 203.3 down to 183.3, with lean muscle mass going from 155.5 to 150.2, and body fat percentage/pounds from 19.5%/39.6 to 13.7%/25.1. Since that low weight, I have put some weight back on and now sit at 191.1, 153.8. and 15.3%/29.1 respectively. I’ve also put on ~60w going from low FTP of 241 (late-July) to 302 (today). In early-June '18, my FTP was ~270 but dropped off quickly through the summer and after some time off the bike.

I use the Tanita RD-901 Plus scale, and actually track my metrics manually on a 7d average basis, always weighing myself 1st thing in the morning. What I’ve noticed with the weight gain off the lows is that it my lean mass/total body weight percentage is slightly better than it was on my way down, indicating muscle gain has slightly outpaced the fat gain over that time frame.

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