Navigating the Crypto Rollercoaster: Is Now the Time to Buy the Bitcoin Dip?
Understanding Bitcoin’s recent plunge, the liquidity catalyst on the horizon, and what key price levels mean for investors in late 2025
Bitcoin’s sudden drop below $100,000 last November shook the market, wiping out over a billion dollars in leveraged positions and sparking fear among traders. Yet, in a dramatic reversal, Bitcoin bounced back above $105,000 within days. What caused this wild swing? Is the dip a final shakeout before a fresh bull run or a warning sign of deeper trouble ahead? In this article, you’ll learn the forces driving Bitcoin’s recent price action, the critical liquidity event coming with the US government shutdown ending, and the technical levels that could decide Bitcoin’s fate in the next two months.
Anatomy of the Bitcoin Dip: What Happened Last November?
After climbing to an all-time high above $126,000 in early October 2025, Bitcoin started a steady decline. The drop felt mild until the first weekend of November, when prices plunged below the psychological $100,000 support level to just under $97,000. This was the first time Bitcoin’s price had fallen below six figures in over four months and triggered panic selling.
What Caused the Crash?
Three main factors combined into a perfect storm:
- Broader Risk-Off Sentiment: Concerns about an overheated AI stock boom in traditional markets caused investors to pull back on risk assets, including crypto. Many investors overlap between tech stocks and cryptocurrency, so problems in one often spill into the other.
- Long-Term Holder Selling: Onchain data revealed that long-term Bitcoin holders, who typically hold through volatility, offloaded over 100,000 BTC in October alone. Unlike previous cycles where they sold during rallies, this selling occurred during price weakness, indicating potential market fatigue.
- Retail Investor Exhaustion: Months of choppy, volatile price action left smaller investors frustrated and panicked, leading many to sell in what analysts termed "max desperation mode."
This perfect combination flushed out excess leveraged positions, with over $1.7 billion liquidated, causing swift price declines.
How Did Bitcoin Recover So Quickly?
The plunge uncovered a strong support zone around $98,000 to $99,000. Once prices stabilized there, bigger players jumped in.
- Institutional buying: US spot Bitcoin ETFs reversed outflows, with a sudden $240 million inflow on November 6th.
- Crypto whales accumulated: Around 68,000 BTC were amassed by large holders during the dip.
This classic pattern — retail selling out of fear, smart money accumulating at a discount — formed the foundation for Bitcoin’s rebound back above $105,000 by November 11th.
The Liquidity Catalyst: Why the End of the US Government Shutdown Matters
The technical rebound is significant, but an even bigger driver of Bitcoin’s near-term prospects lies outside crypto—in Washington, DC.
What Is the Treasury General Account (TGA) and Why Does It Matter?
The TGA is the US government’s main checking account held at the Federal Reserve. During the 42-day partial government shutdown:
- Spending slowed dramatically.
- Tax revenues continued flowing in.
- This caused the TGA balance to swell to roughly $1 trillion, effectively withdrawing nearly $700 billion in liquidity from the broader financial system.
Less liquidity means less capital available for risk assets like stocks and crypto. This liquidity vacuum was a major drag on markets in October and early November.
What Happens When the Shutdown Ends?
Once government funding resumes:
- The TGA balance will be drawn down as the government resumes spending.
- This could inject up to $850 billion back into markets, flooding the system with fresh capital just ahead of typically strong year-end performance.
Think of it like turning on a financial firehose during a critical season for Bitcoin. This massive liquidity boost could provide a powerful tailwind for crypto and other risk assets.
Key Price Levels and Market Sentiment: Watching the Battlefield
Bitcoin now stands at an important crossroads. Analysts are mostly bullish but cautious.
| Level | Role | Notes |
|---|---|---|
| $100,000 | Critical Support Floor | Market aggressively defends this psychological level |
| $95,000 | Medium-Term Holder Cost Basis | A deeper support zone if $100K fails |
| $88,500 | Active Investor Realized Price | Last line of defense in bigger corrections |
| $110,000-$112,500 | Major Resistance Zone | Average short-term holder entry price; must flip to support for bullish continuation |
| $126,000 | Previous All-Time High | Target for bulls if momentum sustains |
What Would Bullish and Bearish Outcomes Look Like?
- Bullish Path: Break and hold above $110,000-$112,500, clearing the short-term holders’ resistance. That opens the door for a push back to or beyond the $126,000 high.
- Bearish Risks: Failure to hold $100,000 support could trigger a deeper correction to $95,000 or $88,500. Continued long-term holder selling may absorb liquidity inflows and keep prices rangebound.
Answer Box: Why Did Bitcoin Crash Below $100,000 in November 2025?
Bitcoin’s drop below $100,000 was triggered by a mix of rising fear in traditional markets, heavy selling from long-term holders unloading over 100,000 BTC, and retail investor panic, which together wiped out $1.7 billion in leveraged positions and forced a sharp correction before institutional buying stabilized prices.
Risks and What Could Go Wrong
While the setup looks bullish, several risks remain:
- Long-Term Holder Fatigue: Ongoing selling by seasoned investors, especially during weak price action, signals underlying market stress that could stall momentum.
- Federal Reserve Uncertainty: Although there is a 68% chance of a rate cut in December, a hawkish surprise could sap risk appetite.
- ETF Market Dynamics: A reversal to outflows or delays in crypto ETF approvals by the SEC could dampen market enthusiasm.
- Seasonal Tax Pressure: End-of-year tax loss harvesting often increases selling pressure.
Actionable Summary: What Investors Should Remember
- Bitcoin tested and briefly broke a critical $100,000 support level, triggering a massive liquidation of leveraged long positions.
- Institutional investors and whales stepped in at these levels, driving a quick technical recovery back above $105,000.
- The end of the US government shutdown will likely release up to $850 billion in liquidity, benefiting all risk assets, including Bitcoin.
- Watch for Bitcoin to reclaim and hold $110,000 to $112,500 for a clear bullish signal toward all-time highs.
- Be cautious of long-term holder selling, Federal Reserve moves, and seasonal market pressures that could limit upside.
Ready to dig deeper?
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FAQ on Bitcoin’s November 2025 Dip and Outlook
Q1: Was the bitcoin drop below $100,000 just a temporary crash?
It was a sharp correction triggered by leveraged liquidations and seller exhaustion but followed by strong institutional buying, making it a potential “cleaning out the weak hands” shakeout.
Q2: How does the US government shutdown affect Bitcoin?
During the shutdown, government funds accumulated in the Treasury General Account, removing ~700 billion dollars of liquidity from the markets. Restarting government spending will inject much of that liquidity back, which can boost Bitcoin demand.
Q3: Why is the $110,000 to $112,500 price range important?
This zone represents the average entry price for short-term holders who are currently underwater. Breaking above this resistance zone is crucial for sustained bullish momentum.
Q4: What does selling by long-term holders signal?
Unlike usual profit-taking during rallies, current selling during price weakness indicates fatigue and reduced conviction, which could temper upside moves.
Q5: Should I expect a big rally at the end of 2025?
There are strong catalysts supporting a rally, notably liquidity injections and potential Fed rate cuts. However, risks like holder selling and macro uncertainties could keep the market rangebound.
Disclaimer: This article is educational and does not constitute financial advice. Cryptocurrency investing involves substantial risk, including loss of principal. Always do your own research before making investment decisions.
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