Key Takeaways
- •Bitcoin briefly dropped below $100K, its lowest level since June.
- •Analysts suggest retail capitulation could mark a market bottom.
- •Arthur Hayes expects new Fed liquidity to lift crypto prices.
- •Bitcoin now meets the technical definition of a bear market.
- •Traders are watching the $100K zone as a key support level.
The recent price movement has rekindled fears of a deeper decline, yet several seasoned market voices argue the opposite – that the sell-off may actually mark the beginning of Bitcoin’s next phase of strength.
Retail Capitulation May Signal a Bottom
Bitwise’s chief investment officer, Matt Hougan, views the latest wave of selling as emotional exhaustion rather than fundamental weakness. In a recent interview, Hougan described retail sentiment as “utterly crushed,” suggesting that small investors have largely surrendered after weeks of liquidations.
He believes that extreme pessimism is historically typical of market bottoms. Hougan stated, "Whenever retail confidence evaporates but institutional curiosity remains strong, it usually means opportunity is around the corner." He also pointed out that longer-term performance metrics still show Bitcoin vastly outperforming most traditional assets this year, even after the recent correction.
Hougan remains confident that large-scale buyers will return once the market stabilizes, predicting that Bitcoin could end the year above its previous record, potentially climbing toward the $125,000–$130,000 range.
Hayes Predicts Liquidity Tailwind from the Fed
Former BitMEX chief Arthur Hayes offered a different reason for optimism, one rooted in macroeconomics rather than sentiment. In a detailed essay, Hayes posited that the United States’ escalating debt burden is cornering the Federal Reserve into expanding its balance sheet again.
He referred to this process as “stealth quantitative easing,” where the Fed injects liquidity through its repo operations without announcing a full-blown stimulus program. According to Hayes, this subtle growth of dollar liquidity eventually spills into risk assets like Bitcoin. He wrote, “As long as money supply expands, digital assets benefit — it’s baked into the system.”
Hayes expects this quiet liquidity expansion to reignite bullish momentum before the year ends, arguing that monetary policy, rather than speculation, will drive the next uptrend.
Market Still Under Pressure
Despite these bullish outlooks, other analysts remain wary. Data from The Kobeissi Letter confirms that Bitcoin has officially entered bear market territory, having fallen more than 20% from its October peak. The coin’s latest rebound above $102,000 has done little to soothe nerves, with traders warning that a failure to hold the $100,000 line could send it back toward the $92,000 zone.
Investor Ted Pillows described the atmosphere as “orderly but fearful,” pointing to thinning liquidity across exchanges. He cautioned, “If we lose that psychological level, volatility could explode again.”
Cycle of Fear and Hope
For now, Bitcoin stands at a crossroads – squeezed between macro uncertainty and long-term conviction. While pessimism dominates headlines, analysts like Hougan and Hayes see this phase as a necessary reset before the next expansion wave.
Whether Bitcoin’s recovery materializes or not may depend less on retail traders and more on the broader liquidity tide that is starting to shift beneath global markets. For the crypto faithful, the coming months will test whether the narrative of digital scarcity can outlast yet another round of fear.