Finance

Bitcoin’s Dip Below $100K: Is This a Mid-Cycle Shakeout or a Sign of Trouble Ahead?

Bitcoin dipped below $100,000, yet ETF inflows signal resilience despite market volatility; analysts remain bullish.

November 7, 2025, 10:18 AM

Digital Bitcoin coin with a glowing neon arrow pointing down, symbolizing a price collapse.

A neon arrow points down through a Bitcoin coin, representing the digital currency's price fall. By Pavlova Yuliia / Shutterstock.com.

Executive Summary

Bitcoin experienced a 9.1% weekly decline, briefly dipping below $100,000, but analysts characterize this as a “mid-cycle shakeout” rather than a fundamental trend reversal.

The recent price drop is attributed to “U.S. bond market whiplash” and global “risk-off” sentiment, with a previous market disruption linked to President Donald Trump’s threats to increase tariffs.

U.S. spot Bitcoin ETFs showed resilience with a significant $239 million in net inflows on Thursday, breaking a six-day redemption streak and indicating continued investor interest.

The Story So Far

Bitcoin’s recent price volatility, including dips below $100,000, is primarily attributed to “U.S. bond market whiplash” and broader “risk-off” sentiment, a dynamic previously observed when President Donald Trump’s tariff threats impacted crypto markets. Despite this, analysts view the current downturn as a “mid-cycle shakeout” rather than a fundamental reversal, anticipating improved liquidity and supportive macro conditions as the Federal Reserve concludes quantitative tightening and has already implemented rate cuts.

Why This Matters

Despite recent volatility and a temporary dip below $100,000, Bitcoin’s resilience is underscored by significant ETF inflows, which suggest a continued investor interest and a potential reallocation of capital rather than a fundamental exit from the asset. This price action is increasingly influenced by broader macroeconomic factors like U.S. bond market fluctuations and Federal Reserve policy, indicating Bitcoin’s growing integration into the traditional financial landscape. Analysts largely view the current downturn as a temporary “mid-cycle shakeout” or “leverage reset,” with an optimistic long-term outlook driven by improving macro conditions expected to support future price appreciation.

Who Thinks What?

Analysts characterize Bitcoin’s recent price decline as a “mid-cycle shakeout” or “leverage reset” driven by U.S. bond market volatility and a broader “risk-off” sentiment, rather than a fundamental trend reversal, and remain optimistic about long-term prospects due to improving macro conditions.

Investors, as indicated by significant inflows into U.S. spot Bitcoin ETFs, are showing continued interest and a “rotation rather than exit,” suggesting they are reallocating capital within the crypto space while maintaining their risk appetite.

Traders on prediction markets like Myriad hold a bullish sentiment, assigning a 55.5% probability that Bitcoin’s next major price movement will be an increase to $115,000.

Bitcoin briefly dipped below $100,000 twice this week, experiencing a 9.1% decline over the past seven days, yet analysts are characterizing the downturn as a “mid-cycle shakeout” rather than a fundamental trend reversal. The cryptocurrency’s volatility comes amidst fluctuations in the U.S. bond market, though Bitcoin exchange-traded funds (ETFs) saw a significant inflow of $239 million on Thursday, breaking a six-day streak of redemptions.

Bond Market Volatility and Bitcoin’s Price Action

The recent price drop, which saw Bitcoin fall below $100,000 on Tuesday before a brief recovery and subsequent slip, is being attributed to “U.S. bond market whiplash.” Deutsche Bank analyst Jim Reid noted a sharp yield sell-off followed by a reversal, with the 10-year Treasury yield experiencing its largest daily decline since October 10. This bond market instability triggered a broader “risk-off” sentiment across global markets, impacting the S&P 500 and Nasdaq.

The October 10 market disruption was linked to President Donald Trump’s threats to increase tariffs on Chinese goods, which led to a significant crash in crypto prices and a record $19 billion in crypto derivatives liquidations.

ETF Inflows Suggest Resilience

Despite the short-term price pressure, the $239 million in net inflows into U.S. spot Bitcoin ETFs on Thursday indicates continued investor interest. This inflow, led by BlackRock’s IBIT, Fidelity’s FBTC, and Ark 21Shares’ ARKB, ended one of the worst redemption weeks for these funds since their launch in January. Bitunix analyst Dean Chen suggested these inflows indicate “rotation rather than exit,” implying investors are reallocating capital within the crypto space while maintaining their risk appetite.

Improving Macro Conditions and Future Outlook

Analysts are optimistic about Bitcoin’s long-term prospects, citing improving macro conditions. Chen highlighted that with the Federal Reserve ending quantitative tightening on December 1 and having cut rates in September and October, liquidity is expected to become more supportive. This backdrop suggests the current pullback is more a “function of leverage reset rather than fundamental deterioration.”

Prediction markets also reflect a bullish sentiment, with traders on Myriad, a platform launched by Decrypt’s parent company Dastan, assigning a 55.5% probability that Bitcoin’s next major move will take it to $115,000, rather than a decline to $85,000.