In October and November, Bitcoin experienced a significant decline. This wasn’t due to technical patterns or irrational panic, but the result of a chain of connected events.
1️⃣ MSCI: The Silent Alarm
MSCI determines which companies are included in global indexes that are followed by many investment funds.
On October 10, MSCI announced it was considering excluding companies with more than 50% of their assets in cryptocurrencies.
This affected companies like MicroStrategy (MSTR), which holds a large portion of their treasury in BTC.
Why does this matter for BTC price?
If MSCI excludes these companies, funds that track MSCI indexes would need to sell their shares.
Those sales would indirectly impact BTC, because companies with large BTC balances might have to adjust their positions.
2️⃣ U.S. Liquidity: The Amplifier
At the same time, the financial market was low on liquidity.
The Fed has maintained Quantitative Tightening (QT) since July, draining dollars from the system. The U.S. Treasury General Account (TGA) was replenished with $500 billion in bond issuance, increasing its balance to nearly $800 billion.
Short-term Treasury debt issuance, driven by Bessent, absorbed even more liquidity. In simple terms, the Fed sells short-term Treasuries and MBS it holds. Buyers pay dollars to the Fed, which removes those dollars from circulation.
This liquidity reduction created a fragile market where small sales hit prices harder, similar to a “thin” market.
Key Note: When companies started adjusting their balances, there weren’t enough dollars to absorb the selling pressure.
Market makers had to reduce positions, and BTC price fell faster and deeper than it would have with sufficient liquidity.
3️⃣ JPMorgan: Public Confirmation
On November 20, JPMorgan published a report noting that excluding MicroStrategy (MSTR) from MSCI indexes could trigger billions in forced sales.
This increased bearish pressure pushing BTC below $90,000.
The report acted as a reminder that “this risk is real” and accelerated investor capitulation.
It’s also worth noting that the report may have had a manipulative intent.
Lesson: In today’s crypto ecosystem, news about key companies and macro conditions can directly affect prices, even if the event isn’t specific to Bitcoin, as BTC is now part of institutional investment assets.
BTC Correlation with U.S. Liquidity (M2)
BTC has historically shown a lagged correlation with the U.S. M2 money supply of about 12 weeks. However, this relationship was interrupted when Bessent started reducing system liquidity. Once the operation is complete, this correlation may recover.
Source: https://bitcoincounterflow.com/
BTCUSD, H4
After breaking previous monthly volume support zones, BTC reached levels seen in April. The bearish bias remains, as no key resistance has been broken yet.
The price may start consolidating, forming an accumulation floor around $80,000 and aiming to break the H4 key resistance at $93,064–$93,074. Breaking this level would be the first sign of recovery.
For now, as long as BTC stays below $93,000, consolidation testing $80,000 is possible, with a potential drop to the volume node around $77,200.
