Bitcoin Wipes Out $771M in Leveraged Longs Before Rebound
By @sharedot · · 7 pages
- Finance
- Crypto
- Bitcoin
- Markets
Bitcoin slid below $81,000 Monday as $771 million in leveraged longs were liquidated, then rebounded above $83,000.
What Happened: A Monday Flash Cascade
Bitcoin dropped below $81,000 on Monday, October 13, before rebounding above $84,000 and settling just above $83,000, according to CoinDesk.
The Block, citing CoinGlass, reported $771 million in crypto derivatives liquidations in the 24 hours through October 12, when Bitcoin briefly fell under $82,000.
Longs bore the brunt: The Block reports $685.6 million of those liquidations were bullish positions, nearly 89% of all losses, with $631.8 million concentrated in the final 12 hours of the window. Ether fell as low as $2,400 before recovering near $2,500.
Why It Surprised: 'Uptober' Let Traders Down
October had been expected to be a strong month, but Decrypt's Morning Minute reports BTC is down 3.2% on the week after topping out near $87K early last week, a roughly 7% drawdown to Monday's low. The Crypto Fear & Greed Index fell to 56, down from 67 a week ago and well off its August peak of 82.
Only 4 of the top 100 coins were in green as alts fell 5-12%, per Decrypt. The surprise is that the damage came from leverage being flushed out rather than new selling: CoinDesk notes open interest fell 1.58% while 24-hour futures volume rose 66% to $212 billion.
The Evidence: Liquidations, Outflows and Asia's Chip Rout
Three data points corroborate the cascade. First, CoinDesk reports liquidations rose 284% to $813 million, with the long/short taker ratio flipping to 48%/52% in favor of sellers.
Second, spot ETFs keep bleeding: The Block reports US spot Bitcoin ETFs saw $679 million in outflows in the week ending October 9, with Bitcoin and Ethereum ETFs combined at $1.22 billion in net weekly outflows, ending three consecutive weeks of inflows.
Third, South Korea's KOSPI plunged 5.46% to 6,035.35 on chip-stock weakness, with foreigners selling roughly $3.35 billion in Korean stocks, per Yonhap as cited by The Block.
The Stakes: Macro Pressure on Risk Assets
The backdrop explains why a price dip turned into forced selling. Decrypt adds that the 30-year Treasury hit 5.70%, its highest since 2002, and Brent oil topped $101 on Strait of Hormuz attacks.
The KOSPI slide, led by Samsung Electronics down 7% and SK Hynix down 10%, reflected AI-trade anxiety after Broadcom's CEO called current AI investing 'casino-like', according to CoinDesk. CoinDesk also notes a direct causal link between Korean stock declines and Bitcoin has not been established.
What Comes Next: CPI Is the Next Catalyst
All eyes turn to the September US CPI report, scheduled for October 14 at 8:30 a.m. Eastern.
The Block reports annual CPI is expected to rise to 3.7% from 3.4%, mainly on energy costs, while CoinDesk cites forecasts of 3.6% headline and 2.5% core inflation.
A cool print could pull yields lower and give risk assets room to run, whereas a hot one, with oil elevated, reopens the rate-hike conversation, per Decrypt.
Notably, CoinDesk reports options markets remain calm, with implied volatility indexes near year-to-date lows, though traders keep buying downside protection in puts. A move below $80,000 is now priced at 56% odds on Myriad, according to Decrypt.