Three Key Things Required for Bitcoin to Avoid Entering a Full-Blown Bear Market

Main Points :

• Bitcoin has dropped more than 20 % from its peak, signalling a possible transition into bear market territory.
• Two major technical support levels are critical: the 200-week exponential moving average (EMA) and the weekly RSI horizontal support.
• A hidden liquidity mechanism — referred to as “stealth QE” via the Federal Reserve’s Standing Repo Facility (SRF) — may act as a structural bullish kicker if activated.
• A US government shutdown and suppressed liquidity currently pose downside risks until resolved.
• For Bitcoin to avoid a deeper correction, it must hold the 200-week EMA support, maintain weekly RSI structure, and see liquidity conditions turn favourable.

1. The Bear Market Warning for Bitcoin

In early November 2025, Bitcoin (BTC) suffered a drop of more than 8 % in a single week, slipping below US$100 000 for the first time since June. The drop was driven by large long-term holders unloading around US$45 billion worth of BTC, as well as a broader risk-off mood triggered by tumbling AI-related equities. The research note from the investment letter “Kobeissi Letter” stated that Bitcoin is now “officially in a bear market” after the roughly 20 % correction from its October 6 all-time high.

Such a correction of ~20 % from the peak qualifies as a technical bear phase in many market frameworks. For investors and practitioners scanning for new crypto-assets or revenue streams, this phase signals caution but also potential accumulation opportunity — depending on whether structural supports hold.

2. Technical Conditions to Watch: 200-Week EMA & Weekly RSI

2.1 The 200-Week EMA Support

One of the most watched long-term indicators for Bitcoin is the 200-week exponential moving average (200 W EMA). Historically, when BTC has pulled back to this level, it has often rebounded and marked the late phase of a bear market rather than the beginning of one. The 200 W EMA is thus viewed as a structural “floor” in major corrections.

Currently, Bitcoin continues to trade above this line (approximately US$100 950) — a positive sign for bulls. Should this level hold, the long-term bullish structure remains intact. On the other hand, a break below could signal a structural shift into a deeper bear cycle. The 200 W EMA is well covered in technical-analysis commentary as a key threshold.

2.2 Weekly RSI Horizontal Support

In parallel, the weekly Relative Strength Index (RSI) has recently held around the 45 level — another historically meaningful zone from which bullish reversals have occurred. This dual support — 200 W EMA + RSI ~45 — frames the “three-key” checklist:

1. Hold 200 W EMA
2. Maintain weekly RSI around 45
3. Turn liquidity conditions positive

If both technical supports hold, it suggests Bitcoin remains in a long-term bullish structure. Yet if either breaks, the odds of a deeper correction rise significantly.

3. Structural Liquidity as the Hidden Bull Trigger: “Stealth QE”

Beyond pure technicals, a growing narrative in crypto circles is that liquidity-driven macro dynamics may be the next major catalyst for Bitcoin. Arthur Hayes (former CEO of BitMEX) argues that the real driver of the next Bitcoin bull run may not be the halving cycle, but rather a covert form of quantitative easing (QE) via the Fed’s Standing Repo Facility (SRF).

3.1 What is “Stealth QE”?

Hayes defines “stealth QE” as the Fed quietly expanding liquidity into the system without overt announcements: heavy U.S. Treasury issuance, tightening funding conditions, and the SRF acting as a back-stop all combine to increase the effective money supply — which has traditionally been bullish for risk assets like Bitcoin.

3.2 Why This Matters for Investors

For readers seeking new crypto assets and income opportunities: if stealth QE kicks in, we may see a structural layer of tailwind for Bitcoin and altcoins. The logic is as follows:

• The U.S. issues large volumes of Treasury debt (≈ US$2 trillion annually) due to fiscal deficits.
• Foreign central banks and traditional buyers are less able to absorb the supply.
• The Fed, via the SRF, effectively accommodates the excess by providing cash to dealers/hedge funds, thus injecting liquidity.
• This incremental liquidity flows into risk assets, including crypto.

Hayes suggests that when the Fed’s balance sheet expands again, Bitcoin could be primed for the next leg up. Some analysts already project year-end targets in the US$125 000 – 130 000 range, under favourable liquidity.

4. Current Risk: Government Shutdown & Liquidity Drain

But there is a caveat: liquidity is actually being drained in the short term. Due to the government shutdown and delayed spending, the Treasury General Account (TGA) is sitting about US$150 billion above its target of US$850 billion. That excess sits idle instead of circulating into markets, which contributes to temporary liquidity tightness and may be a factor behind Bitcoin’s recent weakness.

This means that until the shutdown ends and the TGA is drawn down — thereby releasing liquidity back into the system — the supportive structural tailwind may remain dormant. Hayes notes that the shutdown must be resolved before we see the upside leg.

5. What This Means for Crypto Investors & Blockchain Practitioners

For those seeking new crypto assets or exploring practical blockchain use-cases, the current environment offers both caution and opportunity:

• Accumulation Opportunity? If Bitcoin holds the 200-W EMA support and liquidity turns positive, we might be at the tail end of the correction — presenting a potential entry zone for long-term accumulation.
• Risk of Extended Correction? Failure to hold the technical supports and absent liquidity improvement could lead to a draw-down toward much lower levels (some analysts point to US$92 000 or even lower).
• Altcoin & Blockchain Use-Case Implications: A favourable macro liquidity backdrop (stealth QE) tends to lift all risk assets — including altcoins and blockchain projects. Conversely, when liquidity is tight, capital may rotate out of new tokens into safer assets. Practitioners should monitor macro-liquidity signals, not just token-specific fundamentals.
• Strategy Tip: For blockchain operators or crypto asset investors, consider aligning timing of major launches or marketing efforts with improving liquidity signals. If structural tailwinds emerge (e.g., SRF flows increase), capital for speculative assets becomes more available.

6. Recent Developments & Added Context

Here are some additional recent data points and commentary:

• According to an article on Markets.com, analysts are divided: while some expect Bitcoin to end the year at new all-time highs (~US$125 000 – 130 000), others remain cautious about immediate downside risks.
• On the 200-week moving average topic, a technical article notes that this average is a historically “flawless entry point” for accumulation — but emphasises that as it rises over time, the ideal entry price moves too.
• CryptoFeeds reports that Bitcoin long positions worth over US$1.6 billion were liquidated in one day, pointing to large leveraged flows leaving the market and increasing correction risk.
• The Cryptonomist details how the SRF liquidity story is real: the standing repo facility could act as the unrecognised next leg for Bitcoin’s bull run.

These pieces enhance the three-key checklist: hold technical supports, monitor liquidity, and watch macro/fiscal developments.

Insert here: charts showing Bitcoin vs 200-week EMA, weekly RSI trend, and representation of Fed’s standing repo facility liquidity flow.

Conclusion

In summary, for Bitcoin to avoid sliding into a deeper bear market, three conditions must converge: it must maintain the long-term technical support at the 200-week EMA, hold the weekly RSI structure, and benefit from improved liquidity conditions (possibly via stealth QE). At present, we are in a state of flux: technical supports are being tested and liquidity is constrained due to the U.S. government shutdown. For investors seeking new crypto assets and practitioners working in blockchain, awareness of these macro-technical dynamics is key: not only the asset-specific fundamentals but the wider liquidity ecosystem and fiscal/monetary forces matter. If Bitcoin manages to defend the structural supports and liquidity turns positive, we may soon shift from corrective mode into accumulation mode — potentially signalling opportunity for the next phase of the crypto cycle.