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Bitcoin (BTC) fell more than 8% this week, slipping below the $100,000 mark for the first time since June as long-term holders. about $45 billion of BTC.
Sales intensified in the middle sharp declines in AI-related stockswhich fueled a broader risk shift in the markets.
Data resource The Kobeissei Letter he said that BTC has “officially entered bear market territory” after that correction of about 20% from its October 6 record.
However, some indicators suggest that BTC can still avoid a full-blown ussr market, but several things must happen first.
Bitcoin should hold above its weekly moving average
Bitcoin continues to trade above its 200-week exponential moving average (EMA), currently near $100,950, a key long-term support that has defined any major correction since the end of 2023.
Each time BTC tested this level after strong rallies, it bounced back sharply to set new highs, confirming the EMA as the structural floor of the market, as shown below.
The current 22% drawdown finds the BTC/USD trading pair defending the same wave support on the chart above.
It’s weekly relative strength index (RSI) it is also holding in its horizontal support near 45, an area that has historically preceded large bullish reversals.
While BTC holds support above its base EMA and 200-week RSI, the broader bullish structure remains intact. A break below the two, however, would increase the risk of a deeper bear market pullback.
Fed’s ‘stealth QE’ may save Bitcoin bulls
Former BitMEX CEO Arthur Hayes argued that US fiscal policy will eventually force the Federal Reserve to expand its balance sheet again, this time through what he calls “stealth QE.”
The United States has a deficit of close to $2 trillion a year, financed by Treasury debt, according to the Q3 2025 of the Office of Debt Management. report.
Traditional buyers, such as foreign central banks and US households, have not absorbed the growing supply of Treasuries, leaving hedge funds as marginal buyers, as acknowledged by the Fed in a recent paper.
These funds rely on overnight repo loans, that is, borrowing cash against Treasurys as collateral.
When money fails, the Fed’s Standing Repo Facility (SRF) quietly steps in to lend more money, Hayes wrote, adding that it creates new dollars behind the scenes, imitating quantitative easing.
Related: Fed signals “end of QT”: What will it mean for the price of Bitcoin?
Hayes argued that when deficits increase, SRF use will increase, stealthily increasing liquidity and supporting bullish outlooks for risk assets, such as Bitcoin. Hayes wrote:
“If the Fed’s balance sheet increases, this is positive dollar liquidity, and ultimately pumps up the price of Bitcoin and other cryptocurrencies.”
No demonstrations until the end of the US government shutdown
However, the market may remain volatile until the US government shutdown ends and liquidity conditions improve, Hayes argued.
Luckily for the bulls, the shutdown could be resolved sooner rather than later. Hon Polymarketmore traders are betting on a resolution by next week.
For example, bets in favor of a resolution between November 8 and November 11 (orange) jumped to 36% as of Wednesday from 22% last week. Similarly, the probability of a resolution between November 12 and 15 increased to 28% from 17%.
For now, the Treasury is issuing large amounts of debt – draining dollar liquidity – while its Treasury General Account (TGA) he puts about $150 billion over its goal of $850 billion, meaning that the money has not yet returned to the economy.
This temporary liquidity squeeze is one of the reasons for Bitcoin’s recent decline.
Hayes warned that many traders may mistake this stagnation as the top of the market, as the anniversary of the four-year cycle of Bitcoin in 2021 approaches.
But he argued that the underlying dollar plumbing suggests otherwise: Once spending resumes and liquidity returns, it will mark the next stage higher.
“The system has only two ways,” writes Hayes, “print money or destroy money. Now, it’s the latter, but not for long.”
This article does not contain investment advice or recommendations. Every investment and business move involves risk, and readers should do their own research when making a decision.
