Bitcoin Enters Adjustment Phase After hitting an all-time high of $126,200 on October 6, Bitcoin has fallen by about 20% over the past month and is currently consolidating around $100,000. The total market capitalization of cryptocurrencies has also fallen from $4.35 trillion in early October to the current $3.3 trillion, a drop of 22%, putting downward pressure on both Bitcoin and altcoins. This decline is not due to any negative news related to cryptocurrencies. The main reasons for the current weakness are the US government shutdown, the Federal Reserve Chairman's change of stance, and declining leverage. The US Federal Government Shutdown Crisis The US federal government shutdown, which began on October 1, has lasted for 35 days and is the main reason for the current market correction. This crisis led to a standstill in government spending and created a policy vacuum at major financial regulators, including the U.S. Securities and Exchange Commission (SEC), limiting the flow of macro liquidity into the cryptocurrency market. The freeze on payments in the U.S. Treasury General Account (TGA) particularly hampered liquidity that should have entered the capital markets. Typically, when the TGA stops paying, the government stops spending but continues to collect taxes and issue bonds, thus withdrawing liquidity from the system. While U.S. government shutdowns have historically ended relatively mildly, Republicans and Democrats remain deadlocked in budget negotiations, with Polymarket data showing a 73% probability of this situation continuing beyond mid-November, raising concerns that the recent market correction will persist. Powell's hawkish comments: Federal Reserve Chairman Jerome Powell stated after the October 29 Federal Open Market Committee (FOMC) meeting that a December rate cut is "far from a certainty." These remarks lowered the probability of a December rate cut from 95% to 68%, reducing expectations for looser monetary policy and exacerbating liquidity tensions in the cryptocurrency market. The aftermath of the October 10 liquidation: President Trump's tariff threats against China triggered a chain reaction on October 10, resulting in the largest leveraged liquidation in cryptocurrency history, amounting to approximately $20 billion. Over 1.6 million traders were liquidated, and the market has since exhibited extreme volatility. Recent news that $45 million worth of Bitcoin has been transferred from wallets allegedly linked to Barron Trump has further dampened investor confidence. However, this correction reduced highly leveraged positions, curbing speculative activity to some extent. The correction in the artificial intelligence sector spread: On November 4, the public stock market weakened due to investor concerns about the valuations of AI-related companies. Despite Palantir's strong earnings report, its stock price fell 7.94% in after-hours trading after Michael Burry of Scion Asset Management disclosed his short position. This correction in the artificial intelligence sector also impacted the cryptocurrency market. With high-growth stocks being sold off in the public stock market, the cryptocurrency market, due to its higher volatility, faces greater selling pressure. We maintain our target price of $200,000 for Bitcoin. While current market uncertainty appears high, we need to focus on the certainties that will not change. Global liquidity expansion is evident, with the M2 money supply exceeding $96 trillion, and institutional support for digital assets remains robust. Continued growth among major traditional financial companies, structural expansion in the ETF market, and the gradual adoption of stablecoins by institutions—these medium- to long-term growth drivers remain unchanged. Throughout US history, government shutdowns have always ended with a bipartisan consensus, and this time is no exception—it's only a matter of time. The Fed's direction on interest rate cuts remains unchanged; only the pace remains to be seen. Most importantly, Bitcoin's fundamentals have not changed at all. The network is operating stably, and institutional investors continue their strategic accumulation. When we consider these constant factors, the current correction stems from excessive leverage liquidation and temporary macroeconomic uncertainty—which is insufficient to break the long-term upward trend.
Joy
Brian
Hui Xin
YouQuan
Alex