Bitcoin (BTC) has experienced a significant decline, dropping over 8% this week and falling below $100,000 for the first time since June. This downturn was largely driven by long-term holders selling around $45 billion worth of BTC, according to recent data. The selloff was further intensified by sharp declines in AI-related stocks, leading to broader risk aversion in markets.
The Kobeissei Letter reports that BTC has officially entered bear market territory after correcting by around 20% from its October 6 record high. However, some indicators suggest that BTC can still avoid a full bear market if certain conditions are met.
Bitcoin’s Key Support Levels
Bitcoin continues to trade above its 200-week exponential moving average (EMA), currently at $100,950, which has been a key long-term support level since late 2023. Historically, every time BTC tested this level after strong rallies, it rallied sharply and reached new highs, confirming the EMA as the market’s structural bottom.
At the current 22% decline, the BTC/USD trading pair is defending the same wave support as in the past. Its weekly relative strength index (RSI) also remains at its horizontal support near 45, an area that has preceded major uptrends in the past. As long as BTC maintains support above its 200-week EMA and RSI base, the broader bullish structure remains intact.
Fed’s “Secret QE” and Its Impact on Bitcoin
Former BitMEX CEO Arthur Hayes argues that U.S. fiscal policy will ultimately force the Federal Reserve to expand its balance sheet again, this time through what he calls “stealth QE.” According to the Office of Debt Management report for the third quarter of 2025, the US has a deficit of almost $2 trillion per year, financed by government debt. Hayes believes that as deficits rise, the Fed’s Standing Repo Facility (SRF) usage will increase, secretly increasing liquidity and supporting bullish prospects for risk assets like Bitcoin.
Fed Signals “End of QT”: What Does That Mean for Bitcoin Price?
Hayes argues that as the Fed’s balance sheet grows, it will drive up the price of Bitcoin and other cryptos. However, the market could remain volatile until the U.S. government shutdown ends and liquidity conditions improve. Luckily for the bulls, the shutdown could be resolved sooner rather than later, with more traders on Polymarket betting on a solution as early as next week.
The likelihood of a US government shutdown ending is increasing, with bets for a solution between November 8th and 11th rising to 36% on Wednesday from 22% last week. Currently, the Treasury is issuing large amounts of debt, draining dollar liquidity, while its Treasury General Account (TGA) is about $150 billion above its $850 billion target, meaning no money is flowing back into the economy yet.
This temporary liquidity shortage is one of the reasons for Bitcoin’s recent decline. Hayes warned that many traders may be misinterpreting this stagnation as a market top as the four-year anniversary of Bitcoin’s all-time high approaches in 2021. However, he argued that the dollar’s underlying trajectory suggests otherwise: once spending resumes and liquidity returns, it will mark the next stage higher.
For more information on Bitcoin’s market analysis and the potential impact of the Fed’s “Secret QE,” visit Cointelegraph.
