Bitcoin News Today: Bitcoin's Plunge and Fed's Stealth QE Spark Bull Market Bets

The VIX fear index rose to a near two-week high, gaining 2.4 points to 19.61 intraday, reflecting heightened investor anxiety amid mixed signals from corporate earnings and central bank policy uncertainty. The spike in volatility coincided with a sharp drop in Bitcoin, which fell below $108,000 amid tempered optimism about the crypto market's trajectory. Arthur Hayes, co-founder of BitMEX, warned that the U.S. Treasury and Federal Reserve are potentially orchestrating a "Stealth QE" strategy, which could reignite a Bitcoin bull market if liquidity conditions shift.

Bitcoin's recent pullback, testing support at $106,600 after a 19% decline, has drawn attention from institutional investors. A TradingView report noted a strategy firm recently purchased 397 BTC for $45.6 million at an average price of $114,771, increasing its holdings to 641,205 BTC, valued at approximately $69 billion. Despite the selloff, historical patterns suggest Bitcoin often gains during periods of Fed liquidity expansion. Hayes argued that the Federal Reserve's use of the Standing Repo Facility (SRF) to inject cash into markets—effectively a covert quantitative easing—could mirror past cycles that boosted Bitcoin's price, according to a Coinotag piece.

Meanwhile, traditional markets showed signs of strain as Meta Platforms Inc. (parent of Facebook) announced plans to spend $118 billion on AI infrastructure in 2025, including $72 billion in capital expenditures. The move triggered an 11% drop in Meta's stock on October 30, erasing $29.2 billion from CEO Mark Zuckerberg's net worth and pushing him to fifth on the Bloomberg Billionaires Index, according to a Times of India article. Analysts noted the aggressive spending raised concerns about profit margins, compounding market jitters as investors weighed AI-driven growth against near-term financial risks.

The Fed's tightening cycle, set to conclude in December 2025, has exacerbated liquidity pressures. A CryptoFront report highlighted that SRF usage surged to $50 billion in a single day, signaling stress in private funding markets. While the Fed remains in quantitative tightening (QT), historical precedents suggest it may pivot to easing if market conditions deteriorate further. Bitcoin's performance has historically aligned with liquidity cycles, surging during QE phases and retreating during QT.

Bitcoin's technical indicators underscored bearish momentum, with the RSI dipping below 50 and the MACD histogram shrinking, suggesting waning bullish energy. If prices fall below $106,453, the 61.8% Fibonacci retracement level, further declines toward $102,000 could follow. However, a rebound from this level might target the 50-day EMA at $112,502, offering a potential path for recovery, according to an FXStreet analysis.

Hayes advised investors to "preserve capital and wait for opportunities," anticipating a strong rebound once Stealth QE gains traction. The U.S. government's reliance on bond markets, coupled with foreign central banks' preference for gold over U.S. debt, has created a fragile backdrop. As the Fed navigates liquidity challenges, its interventions could indirectly bolster Bitcoin's appeal as a hedge against fiat devaluation — a point Hayes reiterated.