Bitcoin's Path to Recovery: Evaluating the Easing of Selling Pressure and the Role of Fed Policy

Bitcoin's November 2025 price action has painted a complex picture of market stress and potential turning points. After erasing all its 2025 gains and falling to $82,200-a seven-month low-investors are now scrutinizing whether this represents a market bottom or a continuation of structural selling pressure. The answer lies in dissecting technical indicators, liquidity dynamics, and the Federal Reserve's evolving policy stance.

Technical Indicators Suggest Oversold Conditions

Bitcoin's recent price action has triggered classic bearish-to-bullish reversal signals. On November 17, 2025, the RSI dipped to 33.79, entering oversold territory-a level historically associated with bounce attempts. Concurrently, the Fear and Greed Index plummeted to 15, signaling extreme retail fear, a sentiment often followed by market rebounds.

However, the MACD remains bearish, with a deeply negative reading of -4,003 and a shrinking histogram, indicating that while price may be oversold, the broader trend remains weak. This divergence between RSI and MACD highlights a critical question: Is Bitcoin's decline driven by short-term panic or deeper structural imbalances?

The price also tested a key support level within a symmetrical upward channel established since early 2023. A break below this level could trigger further declines, but a successful rebound might signal a near-term bottom. For now, the market is in a holding pattern, waiting for a catalyst to break the stalemate.

Liquidity Trends and ETF Dynamics

Bitcoin's liquidity environment has grown increasingly fragile. U.S.-listed spot Bitcoin ETFs recorded a record $40.32 billion in trading volume last week, driven largely by BlackRock's IBIT, which accounted for 70% of the total. Yet this surge in volume coincided with a 23% price drop and $3.55 billion in ETF redemptions, with BlackRock's IBIT alone shedding $1.09 billion in outflows-the second-largest weekly outflow on record.

These outflows reflect a broader capitulation by institutional investors. As Strategy Inc. (MSTR) reported a $2.8 billion net profit in Q3 2025, showcasing Bitcoin's growing role as a corporate asset, the ETF redemptions suggest a disconnect between institutional adoption and retail sentiment. The ETFs' shallow liquidity has exacerbated price swings, creating a self-reinforcing cycle of selling pressure.

Fed Policy: A Tailwind for Risk Assets

The Federal Reserve's policy pivot in early 2025 offers a potential lifeline for Bitcoin. By ending its three-year QT program and resuming $35 billion in monthly Treasury purchases starting in Q1 2025, the Fed aims to stabilize banking reserves and ease Treasury yields. This shift is expected to reduce volatility in risk assets and encourage a risk-on environment-a historically favorable backdrop for Bitcoin.

The impact is already visible. Treasury yields have fallen from 4.8% in January 2025 to below 4.1%, indirectly supporting crypto rallies. Bitcoin's 20% price surge following the Fed's announcement underscores the market's anticipation of improved liquidity. Analysts argue that this targeted balance sheet expansion could stabilize Bitcoin's fragile market structure, particularly if the Fed continues to ease monetary conditions.

Market Structure and Investor Behavior

Bitcoin's dominance in the total crypto market cap has dipped to 58.8% in November from 61% in October, signaling cautious altcoin rotation. This shift reflects a search for yield in a bear market, as investors bet on projects with predefined token economics, such as Bitcoin Munari's presale, which launched at $0.10 with a multi-stage roadmap.

Meanwhile, structural risks persist. The proposed exclusion of crypto treasury companies from major stock indexes, such as MSCI's policy change, could force firms like Strategy to liquidate holdings to qualify for index inclusion. Such forced selling could delay Bitcoin's recovery, even if technical and macroeconomic conditions improve.

Conclusion: A Fragile but Plausible Recovery

Bitcoin's path to recovery hinges on three factors: a successful rebound from its November 2025 lows, sustained Fed-driven liquidity injections, and the resolution of structural risks like ETF redemptions and index exclusion debates. While technical indicators suggest oversold conditions and the Fed's policy pivot offers a tailwind, the market remains vulnerable to renewed selling pressure.

For now, the key question is whether Bitcoin's current price action represents a capitulation bottom or a continuation of a bearish trend. History shows that markets often bottom when fear peaks-but in November 2025, the answer may depend as much on macroeconomic policy as on investor psychology.