Bitcoin falls below $100,000, the encryption market bloodbath continues: Three major signals may indicate a rebound is coming

Bitcoin (BTC) falls below $100,000, triggering market panic; the Federal Reserve recently injected over $41.5 billion in liquidity, China suspends additional tariffs on the U.S. and Canada, and global risk sentiment improves; institutional data shows large investors continue to accumulate BTC. Despite short-term market pressure, improved liquidity and macroeconomic conditions may pave the way for a gradual recovery in the crypto market.

The Federal Reserve Slows Tightening, Market Liquidity Recovers

The Federal Reserve has recently signaled a pause in its quantitative tightening (QT) cycle, announcing it will stop reducing its balance sheet and will begin reinvesting maturing bonds. Over the past few days, the Fed has injected approximately $41.5 billion in liquidity, with $3.4 billion added today alone. Additionally, on October 31, the Fed injected $29.4 billion through repurchase agreements (RPs) to ease liquidity strains in the banking system. This move has brought bank reserves close to $2.8 trillion, significantly improving short-term market liquidity. Previously, the tightening cycle led to a sharp decline in liquidity for Bitcoin and most crypto assets. The current liquidity rebound could attract new capital, creating favorable conditions for a crypto market rebound.

China Suspends Additional Tariffs, Boosting Global Risk Assets

China announced a one-year suspension of the 24% additional tariffs on U.S. goods and lowered import tariffs on some agricultural products to as high as 15%. This move is seen as a sign of easing U.S.-China trade tensions. State-owned grain and oil company COFCO has resumed soybean purchases from the U.S., marking the first such move since the start of the year. These developments reduce global market uncertainty and indirectly support risk assets, including Bitcoin and equities. Improved macro conditions and stabilized trade relations are expected to provide external momentum for a phased recovery in the crypto market.

Institutional Flows and Holdings Indicate Bottoming Signs

Although Bitcoin has fallen over 20% from its October highs, wiping out roughly $1 trillion in market capitalization, on-chain data shows that large investors continue to accumulate BTC. Blockchain analytics firm Checkonchain reports that billions of dollars worth of BTC have recently flowed back into exchanges daily, helping keep Bitcoin near $100,000. Crypto trading firm Wintermute states that the current market structure is healthier than in 2022, but a genuine recovery still depends on new inflows from ETFs and institutional products. Meanwhile, capital is gradually shifting toward traditional and tech assets, especially AI-related stocks and prediction markets like Polymarket. This has caused crypto assets to lag behind other risk markets in 2025 performance. Wintermute also notes that the traditional four-year Bitcoin halving cycle model is gradually losing its predictive power.

Conclusion

While Bitcoin remains under short-term pressure and market sentiment remains cautious, the slowdown in Fed tightening, positive signals from China, and ongoing institutional accumulation of BTC are brewing potential turning points for recovery. For investors, the upcoming weeks’ liquidity trends and ETF capital flows will be key indicators to watch for signs of a renewed crypto rally.