Key takeaways:
Bitcoin experiences its largest weekly drop since March, falling below $110,000.
More than $15 billion in leveraged positions have been liquidated, indicating a shift in risk appetite.
Historically, October has shown substantial Bitcoin gains.
Bitcoin (BTC) is facing its most significant weekly decline since March 2025, with a drop of over 5% and prices dipping under the $110,000 threshold. This downturn has severely impacted short-term traders, as over 60,000 BTC were transferred to exchanges at a loss this week.
This is the first occasion in five months that Bitcoin has fallen below the short-term holder (STH) cost basis of $109,700, possibly indicating stress among speculative participants in the market.
Simultaneously, the drawdown has highlighted the extent of risk-on positioning across the crypto sphere. Crypto analyst Maartunn observed that $11.8 billion in leveraged altcoin bets and $3.2 billion in speculative Bitcoin positions have been liquidated, reflecting a significant reset in risk appetite. The analyst suggested that this cleaning could help enhance market stability, allowing for a more balanced recovery.
Market sentiment has also shifted dramatically. Bitcoin researcher Axel Adler Jr. noted that the Advanced Sentiment Index plummeted from 86% (extremely bullish) to just 15% (bearish) within two weeks. While levels below 20% frequently trigger technical bounces, Adler Jr. emphasized that a sustained recovery will necessitate sentiment rising above 40%–45%, alongside an upward trend in the 30-day moving average.
Long-term holders (LTH) appeared stable, as distribution remained low at $76.7 million weekly. Meanwhile, just 1.5% of STH are experiencing losses, with the majority still profitable, reducing the risk of forced liquidations.
However, Adler Jr. cautioned that capitulation risks could increase if STH losses surpass 10% and market value falls below the realized value.
Related: Bitcoin experiences significant fear since $83K as analysis anticipates ‘turning point’
October seasonality to the rescue?
While the short-term outlook seems fragile, Bitcoin’s present trajectory aligns with historical seasonality. September often yields negative returns, averaging −3.43%, yet BTC has thus far remained slightly positive at +0.68%.
Bitcoin network economist Timothy Peterson proposed that the recent pullback aligns well with historical trends. “This is the September capitulation,” Peterson claimed, “On my daily tracking sheet, Sept. 25 is the lowest median value. Bitcoin tends to finish the following five days higher 80% of the time, with an average increase of 1.7%.”
Peterson also pointed out that 60% of Bitcoin’s annual performance occurs post-Oct. 3, with a strong likelihood of gains lasting until June. The economist even anticipated a 50% chance of Bitcoin reaching $200,000 by mid-2026, citing seasonality-driven bull phases between October and June.
Historical trends bolster this optimism. Since 2019, Bitcoin has closed October in positive territory every year, averaging returns of 21.89%. Even amid the bear market of 2022, BTC recorded a 5.53% gain that month. If this pattern continues, the current wave of pain may soon transform into renewed upward movement as the market enters its most seasonally bullish phase.
Related: Bitcoin drops below $109K, yet data indicates buyers re-entering
This article does not provide investment advice or recommendations. All investment and trading endeavors carry risk, and readers should perform their own research before making decisions.
