Bitcoin News Today: Bitcoin's $80K Floor Hinges on Fed's Liquidity Pivot, Hayes Says

Arthur Hayes, former CEO of BitMEX, has signaled that Bitcoin's recent drop to $80,500 likely marked a key support level, citing improving liquidity conditions and the U.S. Federal Reserve's impending end to quantitative tightening (QT) as catalysts for a potential recovery. The former exchange executive, known for his macroeconomic insights, argued that the Fed's balance sheet is set to stop shrinking in December, a shift that could inject much-needed liquidity into risk assets like Bitcoin according to reports. "Minor improvements in $ liquidity," Hayes summarized in a recent X post, highlighting the Fed's planned halt to QT and rising U.S. bank lending as critical developments.

Bitcoin's recent 35% drawdown from its all-time highs has sparked debates among analysts, but Hayes remains bullish, suggesting the $80,000 level will hold as a floor. He emphasized that liquidity expansion—not sentiment—will drive the next phase of Bitcoin's price action, noting that a "rising-tide effect" could lift both Bitcoin and altcoins as traditional market conditions stabilize. On-chain data appears to align with this view: CryptoQuant reported that Bitcoin's recent net realized loss—the largest since the FTX collapse—was swiftly absorbed, indicating that floating supply has been flushed out.

The Fed's policy pivot is central to Hayes' thesis. The central bank's QT program, which has reduced its balance sheet for over a year, is expected to conclude on December 1, according to Hayes and multiple market observers. This shift would mark a reversal from liquidity contraction to expansion, a dynamic that Hayes has long tied to Bitcoin's price trajectory. "We chop below $90K, maybe a stab into the low $80Ks, but $80K holds," he wrote, anticipating a potential short-term test of support before a sustained recovery.

Market volatility has been amplified by uncertainty around the Fed's rate-cut timeline. The CME Group's FedWatch Tool now shows a 79% probability of a 0.25% rate cut at the December meeting, up sharply from 42% a week prior. Economist Mohamed El-Erian described this volatility as "stunning," attributing it to disrupted data from the U.S. government shutdown, a "dual-mandate squeeze," and a lack of strategic clarity from the central bank.

Meanwhile, signs of stabilization are emerging. Jamie Elkaleh, CMO at Bitget Wallet, noted that ETF inflows are returning, retail selling pressure is cooling, and Ethereum is regaining key ground. MicroStrategy's continued Bitcoin accumulation and net inflows into BTC and ETH ETFs further suggest institutional confidence. "Volatility is likely to persist," Elkaleh added, "but the combination of reduced retail selling, returning institutional inflows, and strong network development suggests this recovery has credible footing."

Hayes, however, remains cautious about near-term deployment of large capital, planning to "leave the bazooka until the new year". He also reiterated a controversial thesis: Bitcoin's recovery may hinge on AI tech stocks "cratering" to force a broader liquidity injection from the Fed according to analysis.

As the Fed's policy trajectory remains in flux, the crypto market's response to shifting liquidity conditions will be closely watched. Hayes' $80K support call hinges on the assumption that the Fed's pivot will spark a broader "money printing" resurgence—a scenario that could redefine Bitcoin's path in 2024.