Uncertainty grips the cryptocurrency market as Bitcoin tumbled below the $100,000 mark on Thursday, extending its recent downward trajectory amid a severe liquidity squeeze in the U.S. financial system.
Bitcoin plunges below $100K as the crypto market buckles under U.S. liquidity constraints
The premier cryptocurrency crashed to $97,000 in a sudden selloff, marking more than a 20% decline from its 2025 highs. Not great timing for the crypto faithful.
The slump comes as the U.S. government shutdown resulted in a staggering $198 billion fiscal surplus in September, with October data showing an even greater surplus as most of D.C. remained shuttered.
This federal liquidity drought is being described as “one of the driest periods for fiscal liquidity in months if not years.” No spending, no liquidity. Simple math.
Bitcoin’s price dropped 10% in two weeks following the Federal Reserve’s October 29 rate cut, declining from pre-rate cut levels to $101,667 before Thursday’s further slide.
Market watchers have identified persistent weakness during U.S. trading hours, coinciding with cooling expectations for December Federal Reserve rate cuts.
The crypto market has become more tightly linked to macroeconomic factors than ever before.
Federal Reserve policy shifts and interest rate decisions now directly influence cryptocurrency market sentiment and price action. It’s not your 2017 Bitcoin anymore, folks.
Investors attempting to weather the storm should consider implementing tiered stop-loss orders to protect their portfolios from further downside while maintaining some market exposure.
There may be relief on the horizon. The U.S. Senate has reached a bipartisan deal to end the 40-day-long shutdown, with prediction markets estimating an 85-90% probability of resolution by Friday.
History suggests this could be bullish—after the last major U.S. government shutdown ended in January 2019, Bitcoin rallied more than 265% over the following five months.
Looking ahead, the Trump administration is anticipated to release significant fiscal spending in coming quarters.
Market analysts suggest the “flood gates are about to open” with an expected tsunami of fiscal largess following the shutdown resolution.
If June 2025 lows near $98,000 hold, the next chapter could be written in green.
A breach above the strong liquidity cluster at $115,000 could trigger a significant liquidation squeeze pushing prices toward higher resistance levels.
The downturn has hit crypto-linked equities particularly hard, with miners like Bitdeer dropping 19% and Bitfarms falling 13% amid the broader market decline.
