Major divergences in the crypto market are colliding with a sudden shift in macro liquidity, and one prominent on-chain analyst says what’s happening now looks less like distribution and more like a pressure build-up before a new move.
“Major divergences are playing out across the board. BTC and ETH are both retesting key demand zones as liquidity indicators flip — TGA near peak, QT nearing completion, RRP drained, and global easing underway. This isn’t distribution — it’s the compression before expansion. The next liquidity wave will decide everything,” Negentropic wrote on X, capturing in one sentence the two forces traders say are driving markets: technical retests and a changing macro backdrop.
Bitcoin, which spent much of 2025 carving out fresh highs, slid back into the low six-figure range this week and is trading around the $103k–$107k neighborhood as of November 4, 2025, a pullback that many technicians describe as a retest of “demand zones” formed during the summer rally.
Traders watching price action say the $100k area and the band just above it remain the most important short-term support: if buyers defend that band, the setup looks like a healthy consolidation; if it breaks, downside toward the mid-five-figures becomes more likely.
Ethereum has been quieter but similarly vulnerable: after an extended run toward its year’s highs, ETH has been testing a support region around $3,600–$3,800. Analysts and chartists point to that range as the immediate “demand” that could either underpin another leg higher or, if lost, open a drop toward the $3,400 area. Short-term momentum indicators show cooling buying pressure, but several market commentators still frame the move as a retest rather than capitulation.
Crypto Market Coils Tight
What makes these technical tests more than garden-variety profit-taking is the liquidity backdrop. The U.S. Federal Reserve’s program of balance-sheet runoff, quantitative tightening, is officially winding down, with the Fed announcing it will cease reducing its balance sheet on December 1.
That step changes the plumbing of dollar liquidity: a halt to QT can act like a slow reintroduction of policy accommodation even if headline rates stay where they are. For risk markets that have been riding on increasingly thin liquidity, that shift is enormous.
At the same time, two other central bank plumbing indicators that crypto traders pay attention to are flashing changes. The Treasury General Account, effectively the government’s checking account at the Fed, ballooned to unusually high levels going into the quarter, meaning the Treasury started with a cash buffer that reduces near-term borrowing needs; that larger TGA balance has the effect of temporarily pulling demand for new Treasury supply out of markets.
And the Fed’s overnight reverse repo facility, which had been a $2–3 trillion parking lot for cash during the pandemic era, has been drawn down to a fraction of that peak as reserves tighten. Put together, these data points are the “liquidity flip” Negentropic referenced: less excess cash parked in safe short-term vehicles and a Fed pausing QT changes the marginal buyer/seller calculus across asset classes.
For crypto markets, the practical outcome is straightforward: if the next wave of liquidity, whether coming from the Fed’s reinvestment decisions, fresh institutional flows into spot ETFs, or renewed retail appetite, arrives, the current consolidation could snap into a fresh expansion phase, sending BTC and ETH higher from defended demand zones.
If liquidity remains constrained, the compression could unwind the other way, turning a retest into deeper distribution and a prolonged correction. That is, the binary Negentropic is flagging when they say “the next liquidity wave will decide everything.”
Traders are already positioning for both scenarios. Some hedge funds and long-term holders are using the dip to add exposure, treating the pullback as a buying opportunity near structural support; others are tightening stops and hedging with options in case a liquidity-driven downside accelerates.
Technical analysts are watching the same set of levels: for Bitcoin, defenders point to the $100k region as critical support and a clean reclaim of the $114k–$116k band as necessary to resume the rally; for Ethereum, holding $3.6k–$3.7k looks pivotal to avoid a slide toward $3.4k.
In plain terms, investors need to watch both price and plumbing. Price will tell you whether market participants are willing to step in at current levels; plumbing, the TGA, the Fed’s balance-sheet policy, and the reverse repo facility will tell you whether the capital to drive a sustained move is available.
Right now, the market smells like a coiled spring: compression on the charts and a macro landscape that is on the cusp of changing course. Whether that spring snaps higher or lower depends on the incoming liquidity wave, and on whether buyers show up at the demand zones the chartists keep pointing to.
