Bitcoin teeters at $100,000 as market pressure rises due to shutdown and liquidity shortage
Bitcoin is under pressure again, holding just above $100,000. Nearly $2 billion has left the crypto market in a week, and the Fear and Greed Index has dropped into critical fear territory.
A Coin22 analyst believes that the decline is not due to a deterioration in the macroeconomic environment, but to a lack of liquidity and a temporary reassessment of risks by investors.
Liquidity is at a minimum
Coin22 notes that the current decline is not caused by a specific shock, such as rising inflation in 2022. The main factor is the lack of money entering the market. Following the October selloff, which saw the crypto market capitalization decline by almost $20 billion, participant activity remains low. In recent days, liquidations have exceeded $1.3 billion, of which $1.1 billion was from long positions.
Pressure from the dollar and the stock market
The strengthening dollar and weak stock indices have increased pressure on the crypto market. The dollar index has risen to three-month highs, and major US banks are warning of a possible stock market correction of 10-15%. This has reduced risk appetite and triggered an outflow from spot ETFs—around $1.3 billion over four days, primarily from BlackRock funds. Institutional investors are taking profits and awaiting greater clarity on Fed policy.
The US shutdown as a potential catalyst
The US shutdown is increasing market jitters. According to Coin22, the crisis is already impacting financial flows and investor confidence. Historically, Bitcoin rose 300% after a similar shutdown ended in 2018–2019.
Goldman Sachs forecasts the current shutdown will end between November 10 and 15. According to Polymarket, the probability of the shutdown ending by November 15 is 44%, increasing the chances of liquidity recovery in the coming weeks.
Market structure remains bullish
Technically, Bitcoin briefly dipped below its annual moving average, sparking discussion about a possible bearish phase. However, Coin22 emphasizes that as long as the price remains above $100,000, the market structure remains bullish. The correction from the peak at $126,000 does not exceed 22% and is within the framework of a bullish cycle.
The RSI on the weekly chart is hovering around 45 points, a level where major reversals have previously occurred. The market is being supported by the Federal Reserve's hidden easing: over the past five days, approximately $125 billion has been replenished into the US banking system, which could improve liquidity after the shutdown ends.
Fear at the Bottom
The Fear and Greed Index fell to 23 points, a level that marked local bottoms in previous cycles. Coin22 noted that approximately 28% of all Bitcoins are currently in the red. Historically, such moments have not marked the beginning of a prolonged decline, but rather a reversal point.
Coin22 believes the current phase is a market cleansing, not the end of a cycle. The correction removes excess leverage and overextended positions, laying the groundwork for the next upward momentum.
Conditions for restoration
Analysts identify three key conditions under which Bitcoin can avoid entering a bearish trend:
- The price is holding above the 200-week moving average near $100,000.
- End of the shutdown and recovery of US economic activity.
- Continued liquidity growth, including expansion of the Fed's balance sheet.
While these factors are beginning to emerge, Bitcoin remains in an ascending channel that has persisted since late 2023. The current correction appears to be part of an ongoing bullish cycle, rather than the beginning of a new crypto winter.
Source: cryptonews.net
