Bitcoin is clinging to $100,000 — but the pain might not be over yet.

The top cryptocurrency is reeling from a cocktail of adverse conditions, causing it to slump to $99,000 yesterday as investors scramble for the door.

But there’s a twist: the same liquidity stress dragging Bitcoin down could force the Federal Reserve to restart money printing earlier than expected — a scenario that would be “a significant tailwind for Bitcoin and crypto assets,” according to André Dragosch, European head of research at Bitwise.

Bitcoin is trading at $103,000 today as these five reasons have sent it tumbling.

Risk assets have been dealt a vicious hand of late. Equities are down, the October 10 crash cratered crypto prices across the board, Bitcoin treasuries haven’t been buying, and a historically long US government shutdown means investors are turning conservative.

The liquidity squeeze

For Dragosch, the selloff reflects a tighter macro liquidity environment.

“Although the Fed has announced the end of quantitative tightening by December, its balance sheet continues to shrink,” he told DL News.

That’s created a general risk-off mood across all assets, including US equities and crypto. The S&P 500 has pulled back alongside Bitcoin, with tech stocks hit hard as AI enthusiasm has also cooled.

But the interbank liquidity stress now showing up in repo markets — the overnight market where banks borrow cash by temporarily selling securities — suggests the Fed may need to intervene sooner than planned.

“The fact that interbank liquidity stress is already becoming visible implies that there is an increasing probability for the Fed to intervene and provide additional liquidity due to financial stability reasons,” Dragosch said.

In other words: the Fed might need to resume money printing earlier than expected to prevent financial system stress.

But first, more pain.

Lingering weakness

Carlos Guzmán, senior analyst at GSR, sees more downside before any recovery.

“I think it’s driven by a mix of factors,” Guzman told DL News. “There’s lingering weakness in the market following the October 10 crash. This was compounded by the Fed’s hawkish comments during last week’s FOMC press conference, which fueled rising risk-off sentiment.”

So how far down will Bitcoin go?

“I wouldn’t be surprised if we see more sub-$100,000 Bitcoin,” Guzman said. “I think further short-term market pain is likely.”

Pedro Solimano is DL News’ Buenos Aires-based markets correspondent. Got a tip? Email him at psolimano@dlnews.com.