The cryptocurrency market experienced a significant downturn in October, with a decline of nearly 3%. Bitcoin fell beneath the $110,000 mark, while Ethereum dipped below $3,900. This downturn resulted in a substantial negative impact across many altcoins, as a cautionary sentiment spread through the digital asset landscape.
This recent slump follows one of the toughest months for the crypto world, eliminating around $370 billion in market capitalization. Leveraged trading saw $19 billion in positions liquidated, and a staggering $65 billion was lost in futures open interest, returning trading activity levels to early 2025.
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Institutional involvement has also decreased, with Bitcoin ETFs facing approximately $1.23 billion in weekly net outflows. This included a notable $366 million outflow on Friday, significantly impacting buying pressure during this sell-off.
Moreover, a major outage at AWS affected prominent trading platforms, such as Coinbase and various DeFi applications. This disruption led to increased price spreads and forced liquidations. Within a short period, more than $240 million in long positions were liquidated, which included major holdings in Bitcoin and Ethereum, pushing Bitcoin momentarily down to approximately $107,500.
Market Reactions: Implications of Major Wallet Transfers
The market’s anxiety amplified after reports highlighted significant transfers from SpaceX wallets, involving 2,395 BTC valued at approximately $268 million. Although analysts propose these transfers might be internal adjustments, the timing ignited speculation with headlines questioning whether Musk was liquidating assets, adding to market volatility.
The economic backdrop was already fragile, with heightened U.S.–China trade tensions, a robust dollar, and uncertainty over U.S. fiscal policies driving investors to seek safety in cash and traditional assets.
Furthermore, minor issues such as a Paxos operational blunder that mistakenly minted an excessive quantity of PYUSD tokens (which was swiftly retracted) highlighted infrastructure vulnerabilities, discouraging traders at a time when liquidity was already thinning.
In parallel, altcoins suffered more than major cryptocurrencies, experiencing an average drop of 4%. Notable declines were seen in SOL, BNB, ADA, and DOGE, while XRP maintained a degree of resilience based on recent institutional developments. This situation illustrates the classic flight to quality dynamic: when Bitcoin struggles, smaller cryptocurrencies often see larger declines.
Future Projections and Considerations
From a technical standpoint, Bitcoin is facing key resistance levels between $112,000 and $115,500, while critical support lies around $108,000, $105,000–$102,000, and the significant $100,000 mark.
A stable closure above the 50-day average at $113,000 could help regain positive momentum; however, falling below $101,700 poses risks for a more pronounced bearish trend, leading to potential stop-loss activations and further auto-deleveraging.
Related Reading: Evaluating the Bitcoin Supercycle: Insights into Future Trends
On the Ethereum front, bulls are focused on reclaiming the $4,000 level and the $4,050–$4,150 range; failure to do so could lead to downward pressure towards $3,700–$3,600.
In the near term, macroeconomic factors are set to play a pivotal role, with the upcoming U.S. CPI data and any Federal Reserve announcements regarding potential rate cuts or quantitative tightening expected to significantly impact market liquidity. Additionally, investors should closely watch ETF flows for any signs of reduced outflows, as well as exchange availability and behaviors among large holders.
Cover image from Proprietary Sources, BTCUSD chart from TradingView
