Indicators Suggest Crypto Market Stabilization Amid Recent Turmoil

The crypto market faced significant losses this week as Bitcoin dipped below $100,000 for the first time since June 2025, marking a 20% decline from its peak on October 6. This downturn wiped out approximately $1 trillion in market capitalization across digital assets. Despite prevailing caution, signs are emerging that may hint at a gradual recovery, according to industry analysts.

Federal Reserve's Monetary Policy Shift May Bolster Markets

The U.S. Federal Reserve has signaled a pause in its quantitative tightening measures, having reduced its balance sheet from nearly $9 trillion to $6.6 trillion. The Fed plans to reinvest proceeds from maturing bonds, halting further reductions. This move, along with a recent $3.4 billion cash infusion, brings the total new liquidity to $41.5 billion over recent days, potentially creating favorable conditions for the crypto market.

Trade Developments Between China and the U.S. Enhance Sentiment

China's decision to suspend its additional 24% tariffs on U.S. goods for a year, alongside a reduction in duties on certain agricultural imports, has improved market sentiment. This development, coupled with resumed U.S. soybean purchases by China, may ease global market uncertainties and indirectly support risk assets like Bitcoin.

Institutional Movements and Exchange Activity

Despite Bitcoin's recent price drop, data indicates substantial investor accumulation. On-chain analytics from Checkonchain reveal significant BTC inflows to exchanges, stabilizing the cryptocurrency around the $100,000 level. Meanwhile, Wintermute reports that the market's current structure is healthier than in 2022 but emphasizes the need for fresh inflows from ETFs and digital asset products for a sustained recovery.