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The two-way price movement of Bitcoin is causing strain for both bullish and bearish traders, highlighting the tough conditions in the market.
In just the last day, BTC fluctuated between $107,000 and $113,000, leading to about $600 million lost in both bullish and bearish futures trades. This liquidation wave occurred as traders reduced their leverage on major exchanges, with CoinGlass reporting approximately $355 million in long positions and $301 million in shorts liquidated over 24 hours.
Bitcoin was responsible for the majority of these losses, exceeding $340 million, while ether experienced around $200 million in losses. Solana , , and experienced significant losses, all in the tens of millions.
Liquidations like these often follow substantial price changes. Leveraged positions on perpetual futures exchanges get automatically closed if traders’ margin falls below certain levels, causing significant price movements as positions are sold in illiquid markets.
Large liquidations are vital indicators of quick changes in market sentiment.
“Even with Bitcoin’s steep drop in the last 24 hours, our futures platform shows that positioning is stabilizing,” mentioned Alexia Theodorou, head of derivatives at Kraken. “After hitting a local low on October 6, the long/short ratio for Bitcoin perpetuals has been moving back towards a balanced state.”
“The volatility has led to record levels of derivatives activity on Kraken, but our data indicates that traders are considering the sell-off as overdone and are cautiously preparing for potential rebounds. Sentiment remains tenuous, but a more balanced market seems to be forming following an initial capitulation wave,” added Theodorou.
Sentiment remains tenuous
Bitcoin’s rapid drop from peaks above $113,000 reflects a sudden halt to the recovery observed from the lows of October 10, indicating how tenuous sentiment is as we approach the end of October.
It seems the market is still absorbing the effects from earlier deleveraging events this month.
“The bulls have been unable to push prices above recent peaks, leading to the development of a short-term downtrend,” stated Alex Kuptsikevich, chief market analyst at FxPro.
“With Bitcoin at $108K, it has once again touched its 200-day moving average. The scenario of lengthy consolidation around this average followed by a breakout now appears to be the optimistic view for bulls,” he added.
Major altcoins have also followed BTC’s descent, with ETH holding close to $3,870 and SOL dropping 9% over the week. BNB and XRP recorded slight gains after initially outperforming, while memecoins like DOGE experienced sharper declines amidst dwindling speculative activity.
“The significant intraday fluctuations among Bitcoin, Ethereum, and major altcoins signify a cautious sentiment in the market,” shared Wenny Cai, co-founder and COO at SynFutures. “After yesterday’s brief rebound, traders are again responding to macroeconomic cues, such as rising bond yields, geopolitical tensions, and low liquidity. In such conditions, even minor shifts in risk appetite can trigger large movements.”
Despite the overall downturn, data from Glassnode and ETF flow analyses indicate that structural demand remains intact. Spot ETF inflows are stable, exchange balances are at cycle lows, and long-term holders continue to accumulate assets.
Traders are currently focused on the Federal Reserve meeting scheduled for October 29, with many expecting a 25 basis point reduction in borrowing costs. The central bank cut rates by 25 basis points in September.
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