Key insights:
Bitcoin experiences its most significant weekly drop since March, falling below $110,000.
More than $15 billion in leveraged positions have been liquidated, indicating a reset in market risk appetite.
Historically, October has tended to show strong gains for Bitcoin.
Bitcoin (BTC) is facing its sharpest weekly decline since March 2025, with prices decreasing over 5% and dropping below the $110,000 threshold. The correction has adversely affected short-term traders, as over 60,000 BTC were sent to exchanges at a loss this week.
This marks the first occasion in five months where Bitcoin dipped below the short-term holder (STH) cost basis of $109,700, a threshold that could indicate stress among speculative traders.
Concurrently, the drawdown has unveiled the extent of risk-on positions throughout the crypto market. Analyst Maartunn pointed out that $11.8 billion in leveraged altcoin trades and $3.2 billion in speculative Bitcoin positions have been eliminated, suggesting a notable reset in risk appetite. He argued that this “cleanup” may reduce market fragility and create conditions for a more stable recovery.
Market sentiment has dramatically shifted. Bitcoin researcher Axel Adler Jr. remarked that the Advanced Sentiment Index plummeted from 86% (extremely bullish) to just 15% (bearish) over a two-week span. Though levels below 20% often lead to technical rebounds, Adler Jr. emphasized that a sustained recovery will necessitate sentiment rising back above 40%–45% with the 30-day moving average trending upwards.
Long-term holders (LTH) seemed stable, with distribution remaining low at $76.7 million weekly. Additionally, only 1.5% of STH are in a loss, most still showing profits, which mitigates the risk of forced liquidations.
However, Adler Jr. warned that capitulation risks could rise if STH losses surpass 10% and market value falls below realized value.
Related: Bitcoin experiences significant fear since $83K as analysis points to a ‘turning point’
Can October seasonality provide relief?
While the short-term outlook appears precarious, Bitcoin’s current trajectory aligns with historical seasonality trends. September generally exhibits negative returns, averaging −3.43%, but BTC has so far managed to remain slightly positive at +0.68%.
Bitcoin network economist Timothy Peterson suggested that the recent downturn fits well into historical patterns. “This is the September capitulation,” Peterson stated, “According to my daily tracking, Sept. 25 is the lowest median value. Bitcoin tends to finish the subsequent five days higher 80% of the time, with an average gain of 1.7%.”
Peterson also pointed out that 60% of Bitcoin’s annual performance occurs after Oct. 3, with a strong likelihood of gains extending into June. He even predicted a 50% chance of Bitcoin reaching $200,000 by mid-2026, citing seasonality-driven bull phases occurring between October and June.
Historical patterns also support the optimism. Since 2019, Bitcoin has closed October with gains every year, averaging a return of 21.89%. Even during the 2022 bear market, BTC posted a 5.53% increase that month. If this trend continues, the current period of hardship may soon transition into renewed gains as the market enters its most seasonally bullish period.
Related: Bitcoin tumbles below $109K, but data indicates buyers are stepping in
This article does not constitute investment advice or recommendations. All investments and trading moves carry risk, and readers should conduct their own research prior to making decisions.
