Morgan Stanley warns Bitcoin is entering a "fall cycle," and investors should take profits.

On November 5, 2025, Bitcoin’s price fell below the critical support level of $99,000, losing the 365-day moving average. Morgan Stanley Wealth Management strategist Danny Garindo identified this as a technical bear market signal and warned that the market has entered the “autumn phase” of the four-year cycle, advising investors to take profits in a timely manner.

Data shows that the total assets of US spot Bitcoin ETFs reached $137 billion, and Ethereum ETFs totaled $22.4 billion. However, market makers like Wintermute state that liquidity from stablecoins, ETFs, and digital asset treasuries has peaked. Morgan Stanley Research’s Michael Sepris emphasized that institutional investors are increasingly viewing Bitcoin as “digital gold” and an inflation hedge, despite internal procedural constraints slowing adoption.

Bitcoin Breaks Key Technical Level, Four-Year Cycle Warning

On November 5, 2025, Bitcoin’s price suddenly dropped below $99,000, 3.5% below the 365-day moving average. This breach is widely regarded as a technical bear market signal. Morgan Stanley strategist Danny Garindo cited historical data on mainstream podcasts, noting that Bitcoin follows a “three years up, one year down” cycle, and is currently in the “autumn” phase—meaning a profit-taking window. He compared it to similar cycles in 2018 and 2022, where Bitcoin retreated 50% and 65% after breaking below the annual moving average.

Market sentiment analysis from CryptoQuant’s head Julio Moreno confirms that losing this moving average often indicates a medium-term downtrend. Technical analyst Andre Fozan Azima further pointed out that if the weekly close falls below $97,000, the next support level could be around $85,000. However, hidden bullish divergence signals (RSI and price divergence) suggest a potential rebound, but volume confirmation is needed.

Liquidity Growth Stalls, Institutional Adoption Faces Bottlenecks

In a November 2025 blog, crypto market maker Wintermute revealed that the three main sources of liquidity—stablecoins, ETF inflows, and corporate digital asset treasuries—have entered a plateau. Specifically, stablecoin supply remains at $145 billion, US spot Bitcoin ETF weekly net inflows have fallen below $500 million, and companies like MicroStrategy are slowing their Bitcoin accumulation. This liquidity contraction could increase volatility; for example, Bitcoin’s daily volatility spiked to 8% in early November, the highest since 2024.

Conversely, Morgan Stanley’s Michael Sepris noted that institutional perception of Bitcoin is shifting from a speculative asset to “digital gold” and a macro hedge. Following the clarity provided by the GENIUS legislation, pension funds and insurance companies are beginning to allocate to Bitcoin ETFs, but internal approval processes are lengthy, resulting in slower adoption compared to retail markets. For instance, institutional holdings of the BlackRock Bitcoin ETF account for only 15%, while retail holdings reach 85%.

Key Data on Bitcoin Market, November 2025

• Price Threshold: Support at $99,000 and the 365-day moving average
• ETF Size: Total assets of spot Bitcoin ETFs at $137 billion; Ethereum ETFs at $22.4 billion
• Liquidity Indicators: Stablecoin supply at $145 billion, with a monthly growth rate of 1%
• Cycle Position: “Autumn phase” within the four-year cycle, with an average duration of 9-12 months

Evolving Institutional Perception and Allocation Strategies for Bitcoin

Michael Sepris from Morgan Stanley emphasized that although Bitcoin remains volatile, institutions are integrating it into diversified portfolios to hedge against inflation and currency devaluation. For example, some funds allocate 1-3% of their holdings to Bitcoin ETFs, similar to gold weights. This shift is driven by three factors: first, spot ETFs offer compliant exposure; second, the GENIUS legislation reduces regulatory uncertainty; third, macroeconomic uncertainties increase demand for safe-haven assets. However, the process faces challenges—risk committee approvals take 6-12 months, and immature custody solutions limit large-scale entry.

On-chain indicators can track institutional participation. The number of Bitcoin “whale addresses” (holding over 1,000 BTC) increased by 5% in Q4 2025, and institutional accounts account for 40% of open interest in futures contracts, indicating cautious optimism.

Historical Validation and Market Application of the Cryptocurrency Cycle Theory

Garindo’s “Four Seasons Cycle” model is based on the interplay of Bitcoin halving events and market psychology. Historical data shows that the “autumn” phase in the 2012-2015 cycle lasted 11 months with a 70% correction; in 2016-2019, it lasted 8 months with a 55% correction; the 2020-2023 cycle was affected by pandemic disruptions. The current cycle began with the 2024 halving, and if history repeats, the decline phase could extend into early 2026. Investors can use this model to adjust their positions dynamically—for example, dollar-cost averaging when RSI drops below 30 or employing options to hedge tail risks.

The Role of Stablecoins and ETFs in Cryptocurrency Liquidity

Wintermute’s analysis highlights the importance of stablecoins and ETFs as the “blood” of the market. Stablecoins (like USDC and USDT) provide foundational liquidity for trading pairs, with supply growth showing a 0.7 correlation to Bitcoin prices. ETFs introduce incremental funds via traditional finance channels; for example, in 2025, US spot Bitcoin ETF net inflows reached $30 billion, boosting Bitcoin’s market cap by 25%. However, when flows from these tools peak, the market risks entering a stock-like game with increased volatility. Investors should monitor indicators like Chainlink’s stablecoin supply index or SoSoValue’s ETF daily reports to anticipate trend reversals.

Conclusion

Morgan Stanley’s warnings and the technical breakdown of Bitcoin paint a picture of a market at a critical juncture. While long-term institutional outlook remains bullish on Bitcoin’s “digital gold” properties, short-term liquidity peaks and cycle transitions pose risks. Investors should balance profit-taking and low-position building during the autumn window, paying attention to the potential boost in stablecoin liquidity following the implementation of the GENIUS legislation. As cryptocurrencies move toward mainstream adoption, the ongoing tug-of-war between cyclical and structural factors will continue shaping market dynamics.