Key insights:
Bitcoin experiences its most significant weekly drop since March, falling below $110,000.
More than $15 billion in leveraged positions were liquidated, indicating a shift in risk tolerance.
Historically, October has been a month of substantial Bitcoin gains.
Bitcoin (BTC) is facing its steepest weekly decline since March 2025, with a drop exceeding 5% and prices falling beneath $110,000. This downturn has severely impacted short-term traders, leading to the liquidation of over 60,000 BTC sent to exchanges at a loss this week.
This marks the first instance in five months where Bitcoin has dropped below the short-term holder (STH) cost basis of $109,700, a threshold that may indicate pressure among speculative traders.
Additionally, the drawdown has revealed the extent of risk-on positioning in the crypto market. Analyst Maartunn observed that $11.8 billion in leveraged altcoin investments and $3.2 billion in speculative Bitcoin trades were eliminated, highlighting a notable reset in risk appetite. The analyst suggested that this cleansing could mitigate market instability, setting the stage for a healthier recovery.
Market sentiment has undergone a sharp transformation. 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% often trigger technical recoveries, Adler Jr. emphasized that a sustained rebound will depend on sentiment climbing back above 40%–45%, with the 30-day moving average increasing.
Long-term holders (LTH) appeared resilient as distribution remained steady at $76.7 million weekly. Additionally, only 1.5% of STH are at a loss, with most still profiting, which reduces the risk of forced liquidations.
Nonetheless, Adler Jr. warned that the risk of capitulation could increase if STH losses surpass 10% and the market value falls below the realized value.
Related: Bitcoin experiences heightened fear since $83K, with analysis highlighting a ‘turning point’
Can October’s seasonality save the day?
Despite a fragile short-term outlook, Bitcoin’s trajectory aligns closely with historical seasonal trends. September generally results in negative returns, averaging −3.43%, yet BTC has thus far stayed slightly positive at +0.68%.
Bitcoin network economist Timothy Peterson suggested that the recent pullback fits well within established patterns. “This is the September capitulation,” Peterson said, “On my daily tracking sheet, Sept. 25 is the lowest median value. Bitcoin tends to finish the next five days higher 80% of the time, with an average gain of 1.7%.”
Peterson also pointed out that 60% of Bitcoin’s yearly performance occurs after October 3, with a high chance of gains extending into June. He even forecasted a 50% likelihood of Bitcoin reaching $200,000 by mid-2026, referencing seasonality-driven bull phases between October and June.
Historical data also supports optimism. Since 2019, Bitcoin has closed October positively every year, averaging returns of 21.89%. Even during the 2022 bear market, BTC managed a 5.53% gain that month. If trends continue, the current wave of negativity might soon transition into renewed growth as the market enters its most seasonally favorable period.
Related: Bitcoin falls below $109K, yet data reveals buyers re-emerging
This article does not provide investment advice or recommendations. All investment and trading actions carry risk, and readers should perform their own research when making decisions.
