- Analysts debate whether this dip indicates the onset of a bear market or a healthy correction in Bitcoin’s cycle.
- The cryptocurrency market is in turmoil, particularly Bitcoin, which has seen a decline of over 8% recently, falling beneath $100,000 for the first time since June.
- Long-term holders have sold more than $45 billion in Bitcoin, indicating a market shift towards redistribution or cooling.
The cryptocurrency market is facing a period of intense uncertainty, and Bitcoin, the world’s leading digital asset, is at the center of the storm. After a prolonged period of climbing to new highs in 2024, Bitcoin has now experienced a sharp and concerning decline. As of recent trading sessions, Bitcoin has fallen by more than 8% this week, briefly sliding under the $100,000 mark for the first time since June. The broader market sentiment suggests caution, concern, and for some—outright panic. But does this price dip signal the beginning of a prolonged bear market, or is it simply a healthy correction in Bitcoin’s long-term cycle? Market analysts and on-chain data researchers suggest that Bitcoin is now at a critical crossroads, where three key conditions must align to prevent a deeper bear market phase. The cryptocurrency is still showing important structural resilience, but if this support begins to weaken, the downward momentum could accelerate significantly.
Bitcoin Experiences Strong Sell-Off Amid Risk-Off Sentiment
Over the past week, Bitcoin (BTC) dropped to levels not seen for months, declining more than 20% from its all-time high recorded on October 6. According to data from The Kobeissei Letter, this drop technically places Bitcoin in “bear market territory.” But what triggered the sell-off?
Long-Term Holders Are Taking Profits
Blockchain analytics show that long-term investors sold more than $45 billion worth of Bitcoin during this decline. These investors tend to accumulate BTC for years before selling on significant price rallies. When they start selling, it often indicates that the market is shifting into a redistribution or cooling phase.
Decline in AI and Tech Stocks Spread Fear Across Markets
The sell-off was also linked to a broader decline in AI-related technology stocks, which have driven a large portion of market enthusiasm throughout 2024–2025. When tech stocks fall, investors frequently pull back from risk-on assets, including Bitcoin. This correlation highlights how market confidence—not just crypto-specific news—impacts Bitcoin’s pricing. Despite this negative pressure, analysts emphasize that Bitcoin has not yet confirmed a full bear market. Whether it avoids one depends heavily on three crucial conditions.
1. Bitcoin Must Hold Above Its 200-Week EMA
One of the strongest long-term trend indicators used by traders is the 200-week EMA. This moving average serves as a structural support line that has historically signaled whether Bitcoin is in a bullish phase or a bearish one. Currently, Bitcoin is trading very close to this level, which sits around $100,950.
Why Is the 200-Week EMA So Important?
- It has held up as major support during every large correction since late 2023.
- When Bitcoin remains above this level, long-term bullish trends continue.
- When Bitcoin falls below this level, bear markets have historically followed.
So far, Bitcoin has bounced each time it approached this support in recent months, signaling that long-term investor confidence remains.
Weekly RSI Also Suggests Support Is Holding
The Relative Strength Index (RSI) on the weekly timeframe is holding near 45, which is a zone that has previously marked major bullish reversals. This shows the market is cooling but not collapsing. However… If Bitcoin breaks below both the RSI support and the 200-week EMA, it would be a major bearish signal, suggesting that prices could fall significantly further before recovering.
2. Federal Reserve “Stealth Liquidity” May Support Bitcoin
Former BitMEX CEO Arthur Hayes, a widely-followed macro analyst in the crypto world, argues that U.S. fiscal policy is setting the stage for a renewed expansion of liquidity in financial markets. He refers to this as “Stealth Quantitative Easing (Stealth QE).” Instead of announcing traditional money-printing programs, the Federal Reserve injects liquidity indirectly through mechanisms like the Standing Repo Facility (SRF). When hedge funds purchase large quantities of U.S. Treasury bonds using borrowed money, they depend on overnight lending markets. These markets occasionally require extra liquidity—and when they do, the Fed steps in by effectively adding new dollars into circulation. This process expands the total money available in the system—just like traditional QE—but without the public announcement.
More liquidity → More risk-taking → Higher prices for assets like Bitcoin. If the Federal Reserve increases its balance sheet through enhanced SRF usage, Bitcoin could benefit significantly. Hayes summarized it very simply:
“If the Fed’s balance sheet grows, that is dollar liquidity positive, and ultimately pumps the price of Bitcoin and other cryptos.”
But that liquidity is not flowing yet—which leads to the third essential condition.
3. U.S. Dollar Liquidity Must Return After the Government Shutdown Ends
The U.S. government is currently operating under a shutdown scenario, which has led to a temporary reduction of dollar liquidity across financial markets.
- The U.S. Treasury is issuing large amounts of new debt.
- This pulls dollars out of the banking system, reducing liquidity.
- The Treasury General Account (TGA) is currently $150 billion above its target, meaning money is not being reintroduced into the economy yet.
This tightening of liquidity is one of the main reasons Bitcoin has declined recently.
When Could the Shutdown End?
Market prediction platform Polymarket shows rising expectations that the shutdown could resolve soon:
| Date Range | Probability (Last Week) | Probability (Now) |
|---|---|---|
| Nov 8 – Nov 11 | 22% | 36% |
| Nov 12 – Nov 15 | 17% | 28% |
A resolution would release liquidity back into the system—potentially triggering a strong rebound in Bitcoin and other risk assets. However, until that liquidity returns:
- Market volatility may remain high
- Bitcoin could retest support zones
- Some investors may wrongly conclude the bull cycle has ended
Hayes warns that:
“The system only has two modes: print money or destroy money. Right now, it’s the latter—but not for long.”
Bitcoin’s Fate Depends on Liquidity and Key Support Levels
Bitcoin’s recent decline is significant but not definitive. The asset has seen numerous corrections throughout its history—some far sharper than the current pullback—yet it has repeatedly emerged to set new all-time highs. Whether Bitcoin avoids a deeper bear market depends on:
- Maintaining price support above the 200-week EMA
- The return of Federal Reserve stealth liquidity
- Improved U.S. dollar liquidity once the government shutdown ends
If these conditions align, Bitcoin may resume its upward trajectory, potentially entering the next major bullish phase. If they do not, investors must prepare for continued volatility and deeper corrections. For now, patience and close monitoring of key macroeconomic indicators are essential. The next few weeks may determine the direction of Bitcoin’s next major move—either stabilization and recovery, or a shift into a prolonged consolidation cycle.
Disclaimer: CryptopianNews shares this for learning and info only. It’s not meant to be financial or investment advice. Crypto markets change a lot and move quickly. Investing in them can be risky. You should always look into things yourself. Talk to a trained financial advisor before making any choices about investing.
- Ray Dalio Raises Red Flag: Fed Fueling Financial Frenzy - November 6, 2025
- Key Conditions for Bitcoin to Escape the Bear Market - November 5, 2025
- Uphold Crypto-Backed Loans Launching in 2025 - October 28, 2025