3 Nov 2025
Bitcoin and Ethereum currently show structural weakness, indicating a potential downturn. The Federal Reserve's recent $29 billion injection is a short-term repo facility, not quantitative easing, but signals tightening liquidity which historically precedes market crashes before a pivot to money printing.
Bitcoin and Ethereum are starting to break their structure to the downside, with prices appearing weaker, creating a concerning market environment.
Recent news from the United States federal government spells significant trouble, making market updates crucial for staying informed.
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President Donald Trump secured a trade deal with China, maintaining 10% tariffs, which was widely expected by the market due to the inability of either nation to afford 100% tariffs.
A court case scheduled for next week will decide if a president can impose tariffs; however, a final decision is not expected until mid-2026, rendering its immediate impact on the economy negligible.
The Federal Reserve's injection of $29 billion into markets is not quantitative easing or new stimulus money but rather a short-term repo facility where the Fed lends cash overnight to banks using treasuries as collateral to prevent market seizure.
Repo facilities serve as a liquidity bridge when banks are short on cash and interbank lending freezes due to low reserves, preventing interest rate spikes or fire sales of treasuries by banks.
The repo operation signifies tightening liquidity in the market, indicating that quantitative tightening is effectively impacting banks, businesses, and individuals.
Historical patterns suggest that repo market issues, such as those seen in September 2019, are often early signs of an impending pivot to quantitative easing after an initial period of market pain.
When liquidity dries up, risk assets like Bitcoin typically experience a relatively strong flash crash because central banks usually pivot to injecting liquidity in response to weak markets and systemic crashes.
Ethereum has lost a critical level and is heading towards new support zones at $3,600 and $3,300, while Bitcoin is approaching a crucial support area between $100,000 and $106,000, with a potential next leg down to $88,000-$90,000.
Traders are advised to be cautious and avoid overleveraging during volatile periods of transition from quantitative tightening to quantitative easing, while platforms like Bybit offer welcome rewards and Evidex provide decentralized, anonymous trading.
Once the money printer restarts, following a significant market collapse, hard assets like Bitcoin are expected to experience a strong recovery, leading the market upwards.
Once the Fed pivots, liquidity floods back in, leading hard assets like Bitcoin to recovery.
| Insight | Summary |
|---|---|
| Bitcoin/Ethereum Price Action | Bitcoin and Ethereum are breaking downside structures, showing price weakness. |
| Trump-China Trade Deal | Trump's deal retains 10% tariffs on China, aligning with market expectations and preventing higher tariffs. |
| Tariff Court Case Timing | A court case on presidential tariffs will only have a hearing next week; a decision is not expected until mid-2026. |
| Fed's $29 Billion Injection | This is a short-term repo facility to provide overnight liquidity to banks, not a stimulus or quantitative easing. |
| Quantitative Tightening Impact | The repo operation indicates severe liquidity tightening across the economy, demonstrating QT's effect. |
| Quantitative Easing Signs | Repo market stress historically precedes quantitative easing, suggesting QE is 'around the corner' after initial pain. |
| Liquidity and Risk Assets | Drying liquidity leads to flash crashes in risk assets like Bitcoin before the Fed pivots and injects money. |
| Expected Market Crash | A crash, potentially small, is expected as the Fed typically pivots to liquidity injection only after market weakness or collapse. |
| Post-QE Bitcoin Recovery | Once money printing resumes, liquidity floods back, leading Bitcoin and other hard assets to a strong recovery. |
