The recent surge in forced liquidations has driven Bitcoin down to its lowest level in five weeks, with the current uptick appearing to be more about sellers running out of steam than enthusiastic buyers entering the market. The key to whether the price maintains above $76,600 remains unanswered by current charts.
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Bitcoin (CRYPTO:BTC) is currently priced at $77,309, representing a 3.3% decline over the past 24 hours. A recent wave of liquidations has pushed Bitcoin’s price to its lowest point since early September. The closing price of $77,839 on October 29 marked the lowest daily close since September 17, positioning Bitcoin 38.7% below its record high of $126,080.
On October 29, Barchart pointed out this downturn on X, stating, “Bitcoin $BTC falls to lowest price in more than 5 weeks.” The market saw numerous traders with borrowed funds liquidated, resulting in a significant sell-off that impacted the price severely.
$1.29 Billion in Liquidations Pull Bitcoin Lower
According to CoinGlass, crypto exchanges liquidated $1.49 billion in leveraged positions within a single day, with long positions comprising about $1.29 billion (86.8%) and Bitcoin positions alone responsible for $475 million. Long positions profit from rising prices, and leveraging allows traders to control larger amounts than their own capital would enable.
A liquidation occurs when an exchange forcibly closes a leveraged position due to a drop in the trader’s margin collateral. Each liquidation acts as a sell order, further driving down prices and triggering subsequent liquidations just below the current market price. This chain reaction is known as a liquidation cascade, which can lead to sharper price declines than ordinary sell-offs.
Bitcoin’s intraday trading exemplifies this cascade clearly. On October 30, Bitcoin started at $77,783 (UTC) and quickly fell to $76,600 within the first hour, eventually bottoming at $76,301 two hours later during a period of heavy trading volume. While a security breach at Binance coincided with this decline, the selling started prior to any wallet alerts, indicating that traders had already begun exiting leveraged positions.
This cascade raises questions about the sustainability of Bitcoin’s rebound from $76,301. Liquidation events cease once all leveraged positions are closed, which mitigates forced selling, but this doesn’t mean fresh buyers are entering the market. The current bounce seems driven more by exhausted sellers than by significant buying interest.
Bitcoin Below Short-Term Averages and Cost Basis
Bitcoin is now trading below its 20-day moving average of $81,618 and its 50-day moving average of $81,887, yet remains above the 200-day average of $73,107. Being priced lower than short-term averages indicates current buyers are at a loss, while maintaining above the 200-day average suggests the long-term upward trend is still in play.
According to Glassnode, the “true market mean”—the average price paid by active holders—stands at approximately $77,600, which is above Bitcoin’s current trading price. This implies that many holders are experiencing losses and may opt to sell into any price increase to recuperate funds. Bitcoin has not closed below this level since September 17, when it finished at $76,371 but rebounded to $80,874 the following day and peaked at $86,597 by September 21, its highest close in three months.
Immediate resistance begins at $77,699, a price level where sellers have historically emerged, and where the price previously paused during its drop on October 29. The next resistance is noted at $79,107. Conversely, $76,600 acts as a support level where buyers typically start to engage, and Bitcoin has recently traded back above this threshold.
Volume data adds to the cautious view. The highest volume was recorded during the sell-off, but the subsequent rebound occurred on diminished volume, with the most recent trading showing even less engagement, indicating buyers are not rushing in at current prices.
Bitcoin Outperforms Peers in the Last 30 Days
During the recent sell-off, major cryptocurrencies experienced similar declines. Ethereum (CRYPTO:ETH) decreased by 3.9% to $2,229, while Solana (CRYPTO:SOL) also saw a 3.9% drop to $97. Similarly, XRP (CRYPTO:XRP) fell by 3.3% to $1.25, which is slightly below Bitcoin’s drop. All three cryptocurrencies recorded their lowest closures in 30 days on October 29, coinciding with Bitcoin’s decline.
In the month leading up to now, statistics reveal a stark contrast. Bitcoin is down 7.5%, whereas Ethereum has faced a 17.0% decline, with Solana at 18.2%, and XRP down by 16.1%. The entire crypto market, now valued at $2.6 trillion, dropped 6.5% over 24 hours, while Bitcoin commands a market dominance of 59.8%.
One reason Bitcoin has fared better is its diverse ownership. U.S. spot Bitcoin ETFs control $104.27 billion in net assets, and these funds purchase actual Bitcoin upon investor contributions. In contrast, smaller cryptocurrencies often involve higher leverage and thinner order books, making them more susceptible to greater price fluctuations during liquidation events.
Despite the market downturn, spot Bitcoin ETFs continue to receive inflows, with a net addition of $17.2 million on October 29, as reported by Farside. The leading fund, iShares Bitcoin Trust, attracted $12.8 million, followed by Fidelity Wise Origin Bitcoin Fund with $10.5 million and Bitwise Bitcoin ETF with $8.8 million, whereas Grayscale Bitcoin Mini Trust saw a loss of $15.3 million.
Will Bitcoin Maintain $76,600?
Bitcoin is barely holding above the crucial $76,600 mark. It briefly dipped below this level earlier today but managed a recovery. This rebound seems driven more by the conclusion of liquidations than by fresh buying interest. The price is now above support levels on low volume and still below Glassnode’s true market mean of $77,600, as indicated by a cautious Crypto Fear & Greed Index reading of 41.
To affirm this recovery, Bitcoin must close above $79,107, breaking through the initial resistance and surpassing the true market mean. Conversely, a drop below $76,600 would suggest a failure of support, potentially leading to a decline towards $73,107. New buyers need to outnumber forced sellers; while a $17.2 million inflow into ETFs is encouraging, it does not yet confirm that fresh demand is responsible for the bounce.
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