Bitcoin Rebounds After Record Liquidation Event

Market Overview

The cryptocurrency market is showing signs of recovery following what has been described as the "largest single-day wipeout in crypto history" on Friday, October 11. Bitcoin has rebounded to approximately $115,000 after briefly falling below $105,000 during the market crash that was triggered by President Trump's announcement of potential 100% tariffs on Chinese imports.

Despite the significant market turbulence that resulted in approximately $19 billion in liquidations affecting 1.6 million traders, Bitcoin has demonstrated remarkable resilience. The recovery has been supported by steady ETF inflows, with Bitcoin and Ethereum ETFs attracting $3.17 billion last week alone, pushing the year's crypto fund flows above last year's mark.

Institutional interest remains strong, with Strategy Inc. acquiring 220 Bitcoin for $27.2 million last week, and MARA Holdings purchasing $46 million worth of Bitcoin following the market tumble. Additionally, BlackRock CEO Larry Fink has significantly shifted his stance on Bitcoin, now viewing it as a legitimate alternative asset that serves a similar purpose to gold, further validating Bitcoin's position in the financial ecosystem.

Major Negative News

• Record Liquidation Event: Friday's market crash triggered by Trump's China tariff announcement resulted in approximately $19 billion in liquidations, the largest single-day wipeout in crypto history, with Bitcoin briefly falling below $105,000.
• Potential Insider Trading Concerns: A significant Bitcoin short position was reportedly opened minutes before Trump's tariff announcement, raising questions about market manipulation and insider information.
• Continued Bearish Positions: A whale who previously profited from shorting Bitcoin before Friday's crash has opened a new $340 million Bitcoin short position, suggesting potential for further downside.
• Analyst Warnings: Some analysts, including Capo, predict that the Bitcoin price crash may not be over, suggesting a potential further 30% drop to the $60,000-$70,000 range for a complete market correction.
• Regulatory Concerns: The European Banking Authority has warned that crypto firms are exploiting MiCA loopholes, leading to increased cross-border risks and misuse of customer funds, highlighting significant threats to the EU.
• Fed Chair Speech Risk: Jerome Powell's upcoming speech could potentially trigger another market crash, with analysts noting high probability of interest rate hikes in October and December.

Major Positive News

• Bitcoin Price Rebound: Bitcoin has reclaimed key price levels, rising back above the short-term holder's realized price to approximately $115,000, with analysts suggesting the bull run may continue with targets of $150,000 still in play.
• Strong ETF Inflows: Bitcoin and Ethereum ETFs attracted $3.17 billion last week, pushing the year's crypto fund flows above last year's mark, indicating robust investor demand despite market volatility.
• Institutional Buying: Strategy Inc. acquired 220 Bitcoin for $27.2 million, while MARA Holdings purchased $46 million worth of Bitcoin following the market tumble, demonstrating continued institutional confidence.
• BlackRock CEO Endorsement: Larry Fink has significantly shifted his stance on Bitcoin, now viewing it as a legitimate alternative asset that serves a similar purpose to gold, marking a major validation from one of the world's largest asset managers.
• UK Political Support: Nigel Farage has proposed a comprehensive pro-crypto plan for the UK, including cutting crypto capital gains tax to 10%, establishing a £5B Bitcoin reserve, and allowing tax payments in BTC, aiming to strengthen Britain's position in digital finance.
• Winklevoss Twins Prediction: Gemini's Winklevoss twins have made a bold forecast of Bitcoin reaching $1 million, exciting investors and global markets, further solidifying Bitcoin's perceived status as "gold 2.0."
• Institutional Adoption: Citi plans to introduce crypto custody services in 2026, joining other mainstream financial institutions in expanding into the cryptocurrency sector, signifying growing institutional interest and infrastructure development.

Key Risk Factors

• Potential escalation of US-China trade tensions following Trump's tariff threats could trigger further market volatility
• Federal Reserve interest rate decisions, with high odds of 25 basis point moves in October and December
• Regulatory concerns, particularly in the EU where the European Banking Authority has warned about firms exploiting MiCA loopholes
• Large whale movements, including a dormant Bitcoin stash from Mt. Gox moving $33 million to an exchange after 13 years
• Leverage in the market remains a concern, with analysts warning that bears may sell at higher levels, limiting sustained rallies
• Government shutdown in the US entering its third week, potentially delaying crypto ETF approvals
• Security threats, including the Astaroth Banking Trojan targeting crypto credentials

Conclusion and Outlook

Bitcoin has demonstrated remarkable resilience in the face of significant market turbulence, rebounding to $115,000 after experiencing what has been described as the largest single-day liquidation event in crypto history. This recovery suggests strong underlying demand and confidence in Bitcoin's long-term value proposition, despite short-term volatility.

The market appears to be following a predictable cycle in response to the tariff announcements, with initial shock giving way to stabilization and potential recovery. Institutional interest remains robust, as evidenced by significant purchases from Strategy Inc. and MARA Holdings, as well as continued ETF inflows. BlackRock CEO Larry Fink's endorsement of Bitcoin as "gold 2.0" further validates its position as a legitimate alternative asset.

However, several risk factors remain on the horizon, including potential further escalation of US-China trade tensions, upcoming Federal Reserve interest rate decisions, and regulatory concerns in various jurisdictions. The presence of large short positions and analyst warnings of potential further downside suggest that market participants should remain cautious in the near term.

*Key Monitoring Points*: Investors should closely watch Jerome Powell's upcoming speech for indications of Federal Reserve policy direction, developments in US-China trade relations, ETF inflow/outflow patterns, and whale activity that could impact market liquidity. Additionally, the resolution of the US government shutdown could accelerate pending ETF approvals, potentially providing a positive catalyst for the market.

※ This report is provided for informational purposes only and is not investment advice or a recommendation. Investment decisions should be made at your own discretion and risk.

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