Bitcoin ‘bottom in’ as ETF traders dump $800 million

Core Viewpoint - Analysts believe Bitcoin has reached a local bottom and predict a surge in liquidity will lead to a retest of record highs in the coming months [1][2]. Group 1: Market Conditions - Bitcoin's price dropped approximately 3% to just over $107,000, influenced by $800 million in asset sales from Bitcoin exchange-traded funds last week [1]. - Despite the recent dip, October has seen $3.4 billion in ETF inflows, indicating strong investor interest [2]. Group 2: Federal Reserve Policy - The Federal Reserve's announcement to end quantitative tightening from December 1 is expected to reverse the liquidity drain, creating a favorable environment for Bitcoin [3][4]. - Analysts anticipate further easing of liquidity once the US federal government shutdown concludes, which will enhance Treasury Department spending and bank reserves [3]. Group 3: Market Sentiment - Market sentiment is shifting towards cautious optimism, with Bitcoin consolidating between $105,000 and $115,000 as traders await clearer signals from central banks [5]. - As ETF flows stabilize and become more balance-sheet-driven, volatility is expected to decrease, setting the stage for a potential upward movement in Bitcoin's price [5].