How Liquidity Stress and Tax Moves Are Dragging Bitcoin Down

The recent U.S. government shutdown caused a liquidity crunch, adding pressure and pulling billions from the financial system.

Bitcoin (BTC) has fallen below $95,000 as U.S.-centric selling pressures and liquidity tightening converge to weigh heavily on the market.

Analysts are now warning that the drop is not a mere price fluctuation but a structural correction shaped by long-term holder profit-taking, fiscal constraints, and short-term investor stress.

A Perfect Storm of U.S. Selling Pressure

According to an analysis from XWIN Research Japan, the Coinbase Premium Index has been negative for weeks, meaning BTC is trading at a lower price on the U.S.-based exchange compared to international platforms, a clear signal that American investors are selling more aggressively than their global counterparts. This is creating a repeated pattern where Bitcoin recovers during Asian and European hours, only to reverse sharply when U.S. markets open.

The selling is not limited to short-term speculators. On-chain data shows that long-term holders across various cohorts, from those holding for six months to as long as seven years, are all taking profits at the same time. As noted by analysts like Will Clemente and confirmed by Fidelity, this widespread selling is a strong indicator of year-end tax optimization, with U.S. investors locking in gains to finalize their 2025 tax positions.

Furthermore, the recent U.S. government shutdown created a significant liquidity crunch, with the temporary halt in federal spending causing the government to run a surplus that pulled billions of dollars out of the financial system.

XWIN suggested that this, combined with fading hopes for a December interest rate cut, weakened risk appetite across U.S. markets, dragging down equities, crypto-related stocks, and Bitcoin in unison.

Market Psychology and the Search for a Bottom

The current downturn is pushing the market into a painful but necessary cleansing phase. As analyst MorenoDV_ explained, the market is testing the resolve of short-term investors. They noted that the Short-Term Holder Market Value to Realized Value (MVRV) ratio is hovering near 0.9, a level that historically signals capitulation.

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When this ratio falls below 1, it means the average recent buyer is holding at a loss, and a break below 0.9 could trigger a final wave of selling that often forms a durable market bottom.

Traders are now watching key price levels for signs of stability. As of November 14, analysts identified major on-chain support around $95,900, where a significant number of BTC were last moved. A decisive break below this threshold could see the price quickly descend toward the next support zones near $82,000.

The rejection of the flagship cryptocurrency at the $107,000 resistance level earlier this week confirmed the bearish trend, with the asset now trading below its 200-day moving average, a widely watched indicator of long-term momentum.

While the mood is pessimistic, the intense selling pressure from U.S. investors is viewed by many as a temporary, seasonal phenomenon.