Bitcoin surged 5% to above $90,000 and Ethereum topped $3,000 on November 27, 2025, driven by a US Treasury liquidity injection following the end of a government shutdown. ARK Invest CEO Cathie Wood predicts the recent crypto liquidity crunch will reverse within weeks due to Federal Reserve policy shifts. Institutional inflows returned, particularly to Ethereum products, signaling a market recovery.
The cryptocurrency market rallied on November 27, 2025, with Bitcoin reclaiming the $90,000 level after a 5% increase and Ethereum surpassing $3,000 for the first time in a week. This rebound followed a month of stagnation, where average wallet investments in major assets like Cardano, Chainlink, Ethereum, Bitcoin, and XRP had declined by 19.2%, 13.0%, 6.3%, 6.1%, and 4.7%, respectively, according to Santiment data.
The primary catalyst was a structural shift in US liquidity. A six-week government shutdown had drained approximately $621 billion from the financial system, reaching a multi-year low on October 30. With federal operations resuming, about $70 billion has returned so far, though the Treasury General Account (TGA) remains elevated at $892 billion compared to a historical baseline of $600 billion. Ark Invest noted in an X post that this normalization, combined with excess Treasury cash flowing into the banking sector, is set to boost risk assets.
Adding to the momentum, Federal Reserve officials including Governor Christopher Waller, New York Fed President John Williams, and San Francisco's Mary Daly signaled willingness for rate cuts, raising the probability of a near-term reduction to nearly 90%. This dovish stance aligns with the end of Quantitative Tightening (QT) on December 1, removing a liquidity dampener.
Cathie Wood, CEO of ARK Invest, forecasted that the liquidity squeeze affecting crypto and AI markets would reverse within weeks, driven by three expected Fed policy shifts before year-end. Her firm has been buying crypto equities aggressively, deploying over $93 million during the downturn.
Institutional flows showed rotation toward Ethereum, with spot ETFs attracting $61 million in net inflows over four sessions, per SoSo Value. Bitcoin funds added $21 million, XRP $22 million, while Solana saw $8 million in redemptions. Timothy Misir of BRN told CryptoSlate that buyers have re-engaged but volumes are thin, with open interest not spiking despite positive perpetual futures funding rates, indicating accumulation without excessive leverage.
Risks persist, including potential hot inflation data forcing Fed reversal, holiday-season thinning of order books, and whale deposit spikes signaling exits. Misir suggested Bitcoin holding $90,000 could target $95,000, but failure might lead to $84,000.