Bitcoin (BTC) enters a pivotal week in October with the bull market’s future hanging in the balance — what lies ahead?
Bitcoin bounces back robustly following its largest liquidation cascade, soaring to $116,000 at its peak.
Market participants are split on future directions — some even question the return of the bull market.
A significant leverage reset could provide relief for bulls, though concerns about shorts persist.
US inflation data is still delayed due to the government shutdown, with Fed Chair Powell set to speak.
The crypto “debasement trade” garners attention as gold reaches all-time highs.
“Game over” as Bitcoin, crypto bounce back
Bitcoin managed to reach $116,000 to kick off the week as weekly close volatility unfolded predictably.
This marks a 5.7% recovery from Friday’s lows of $109,700 after the largest liquidity wipeout in crypto history, supported by data from Cointelegraph Markets Pro and TradingView.
A single tariff announcement amid the US-China trade war triggered unprecedented panic.
Even the stock market and gold were affected — by Monday, gold had rebounded to new highs of $4,078 per ounce.
“If you factor in the after-hours drop in futures, the S&P 500 is up +120 points at the open,” noted trading resource The Kobeissi Letter in ongoing coverage on X.
“This effectively wiped out 50% of the decline seen late last week. Now, we await further guidance from the Trump Administration.”
Crypto, in turn, added over half a billion dollars to its market cap after Friday’s lows. Some short traders misjudged the timing, prompting co-founder Adam Kobeissi to declare the recovery as “game over.”
“This marked one of the fastest and largest wealth transfers in crypto history,” he stated.
US President Donald Trump, whose message on Truth Social initiated the downturn, also spurred the recovery.
“Don’t worry about China, it will all be fine!” he tweeted on Sunday.
In light of recent events, one BTC price chart stands out: volatility. Crypto quant analyst Frank A. Fetter noted, implied volatility is now at its highest since April — at the peak of tariff controversies.
“BTC implied volatility just surged: the market is now anticipating larger potential moves ahead. Finally,” he updated his X followers.
Fetter alluded to the muted progress in what should be Bitcoin’s peak bull market year. As reported by Cointelegraph, there are growing concerns that BTC/USD may not replicate history with a peak in Q4.
Bitcoin bull market dependent on critical trendline
This week presents a dilemma for traders: is the worst behind us, or is it merely the onset of a major BTC price correction?
Trader Roman, who has expressed skepticism towards the bull market’s vigor, clearly believes in the latter.
“Last week’s flash crash precisely rebounded off our diagonal uptrend support from August 2024 at 40k,” he wrote alongside a chart on X.
“I anticipate at least a retest of 108, but as many are aware, HTF shows bearish indications. I’ll reassess on the 1D once we have an intra support retest at 107-108.”
Roman noted that a breach below the diagonal trend line would “officially” affirm a new macro downtrend, likely confirming the bear market.
In a more optimistic light, trader Skew remarked that “large players” were stepping in as the BTC price surpassed $115,000.
$BTC
Looks like $115K sparked interest among large players too (likely a firm) pic.twitter.com/ta9w5iafia— Skew Δ (@52kskew) October 12, 2025
“It appears to be in decent shape as long as the price doesn’t close below $112K on the daily and next weekly,” he noted regarding daily and weekly charts, with a crucial hurdle for bulls set at $120,000.
Others examined exchange order-book liquidity to identify critical price levels moving forward.
“Be mindful of liquidation hot spots,” trader SuperBro advised followers on X.
“Tradfi may require an opportunity to retest the lows, with liquidity from 108.5 to 113, and concentration nearer to the mid 111’s. The overhead hot spot is from 123-128 with a central area around $126K ATH.”
Analyst: “Exercise caution” after crypto liquidity flush
The turmoil from last week’s liquidity cascade has resulted in an unprecedented crypto market reset.
Recent market insights from the on-chain analytics platform Glassnode indicate that funding rates across derivatives exchanges have plummeted to bear-market lows.
“Funding rates across the crypto landscape have dropped to their lowest since the low tide of the 2022 bear market,” it shared with X followers on Sunday.
“This marks one of the most severe leverage resets in crypto history, highlighting the extent of speculative excess that has been purged from the system.”
Open interest (OI) reflects a similar narrative. From Friday to Sunday, more than $20 billion in assets vanished from exchanges, according to data from CoinGlass, only to rebound from $69 billion to $74 billion.
“We witnessed the largest open interest wipeout in history. For BTC alone, over $10B in open interest was eliminated across all major exchanges,” confirmed Glassnode co-founder Rafael Schultze-Kraft on X.
Schultze-Kraft noted that liquidations were “almost certainly larger” due to incomplete reporting by market data providers.
“According to our BTC Long/Short Bias chart, monitoring the aggregate net positions of the largest BTC traders on Hyperliquid, there was a sharp increase in net shorts beginning on October 6th, well before Friday’s events,” he elaborated.
“Although levels have since bounced back, they remain significantly negative. Stay cautious.”
Missing data shifts focus to Powell at the Fed
This week, two essential US inflation indicators might be delayed due to the ongoing government shutdown.
The September print of the Consumer Price Index (CPI) and Producer Price Index (PPI), alongside initial jobless claims, were initially scheduled for release on October 16.
The shutdown places an emphasis on leading Federal Reserve figures, including Chair Jerome Powell, who will be addressing “Economic Outlook and Monetary Policy” at the National Association for Business Economics (NABE) Annual Meeting in Philadelphia.
Market participants will scrutinize Powell’s remarks for hints about future interest-rate cuts — something that equity traders are keen to see as a source of liquidity support.
Expectations are almost uniform that the Fed will lower rates by 0.25% at its meeting on October 29, according to data from the CME Group’s FedWatch Tool.
Commenting on the situation, trading resource Mosaic Asset Company pointed out “significant divisions” among officials concerning the timing and extent of future rate cuts.
“The recent minutes from the latest rate-setting meeting indicate that the Federal Reserve is currently maintaining its easing trajectory,” it mentioned in its latest newsletter, “The Market Mosaic.”
“Fed comments reflect deep divisions within the central bank regarding the prioritization of full employment versus price stability.”
As previously reported by Cointelegraph, labor market weakness remains a high priority for the Fed.
All aboard the “debasement trade” train
Amid short-term turbulence, crypto and risk assets could be on the verge of a significant uptrend, driven by changing perceptions about the US dollar and fiat currencies.
Related: ‘Debasement trade’ is set to boost Bitcoin, Ethereum DATs will prevail: Hodler’s Digest, Oct. 5 – 11
Bitcoin’s latest bull market has coincided with the emergence of the so-called “debasement trade” — a substantial hedge against global currency devaluation.
“Bitcoin began rising to record highs in 2024, elevating it to as high as $125,000,” noted Mosaic Asset Company.
“Just as gold has led the way in precious metals, Bitcoin is at the forefront among cryptocurrencies.”
With gold achieving new all-time highs as of Monday, Mosaic highlighted a potential fresh obstacle for risk-asset bulls in the forthcoming months: inflation.
“Precious metals and popular cryptocurrencies got a boost amid currency devaluation fears, fueled by a growing global money supply and increasing government debt levels. Another potential consequence of currency debasement could be the emergence of inflationary trends in the coming months,” it added.
Mosaic referred to the “prices paid” data from the Fed’s latest business surveys, noting it is often a leading inflation indicator.
“The rise in prices paid indicators aligns with the onset of the trade war; currency devaluation could also be an underlying inflation driver,” it indicated.
The overall market sentiment this year could exacerbate any unexpected turns in the macroeconomic narrative.
The Kobeissi Letter referenced last week’s swift response to the US-China trade war as a glaring example of this new reality.
“The -$19.5 billion crypto liquidation and -$2.5 trillion equity market tumble on October 10 have underscored a vital point. Markets in 2025 have become more reactionary than ever before,” it shared on X.
“When combined with record leverage levels, a FOMO-driven market, and significant algorithmic trader participation, it can result in volatility.”
This article does not constitute investment advice or recommendations. Every investment and trading activity carries risk, and readers should perform their own research before making any decisions.
