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Market snapshot: Bitcoin slips but accumulation continues
Bitcoin (BTC) dropped below $113,000 after a weekend sell-off tied to tariff headlines, erasing roughly 9% from its Oct. 6 record high near $126,080. Over the past week prices oscillated between approximately $109,883 and $125,023, while daily spot volume cooled by about 25% to roughly $69 billion. Derivatives activity painted a nuanced picture: CoinGlass data shows derivatives volume edged up slightly to $109.97 billion, but open interest fell 1.8% to $73.36 billion — a mix that often signals deleveraging.
Why the on-chain picture is bullish despite price weakness
Exchange reserves at decade lows
On-chain metrics reveal a strengthening supply-side narrative. CryptoQuant contributor Chairman Lee reports that Bitcoin held on centralized exchanges has declined to around 2.4 million BTC — the lowest level since 2015 and a steep drop from the more than 3.5 million BTC seen in 2020. This prolonged withdrawal trend reduces immediate selling pressure, an important structural factor for future rallies.
Accumulation from long-term holders and institutions
Flows into regulated custody, institutional wallets, and ETF holdings continue to siphon coins off exchanges and into cold storage. Historically, shrinking exchange reserves have preceded major upside moves (notably in 2020–2021), as reduced tradable supply amplifies buying pressure when demand returns.
Liquidations and a market reset
Leverage cleared after tariff-triggered volatility
Research from XWIN Research Japan shows October 10th’s tariff news wiped out roughly $19 billion of leveraged positions, briefly pushing BTC down toward $104,000. While painful in the short term, such large liquidation events have often acted as market resets rather than catalysts for extended declines. When forced leverage exits, open interest drops and funding rates tend to normalize.
On-chain signals point to renewed accumulation
XWIN’s on-chain analysis notes funding rates have returned to equilibrium and the adjusted Spent Output Profit Ratio (aSOPR) has crossed above 1.0 — an indication that selling pressure has eased and participants are shifting from panic to accumulation. Combined with ETF inflows and lower exchange balances, the data suggest a constructive medium-term setup for Bitcoin.
Bitcoin technicals: cautious but intact
Momentum and moving averages
Technically, Bitcoin sits in a cautious zone. The 14-day relative strength index reads around 44, implying neutral momentum. Shorter moving averages (10–50 day) show modest selling bias and MACD momentum leans slightly bearish, but the longer-term trend remains supported.
Bitcoin daily chart
Key levels to watch
The 200-day moving average is near $108,000 and remains a critical support band — holding this area preserves the long-term bullish structure. On the upside, a sustained break above $116,000–$118,000 would signal renewed strength and could clear the way back toward $125,000. Conversely, a drop below $110,000 would expose a nearer-term test around $105,000.
Outlook and what traders should monitor
Focus on supply, leverage, and macro context
Short-term price action may remain choppy, influenced by macro headlines and risk-on/risk-off flows. Traders and investors should monitor exchange reserves, funding rates, and open interest for signs of renewed buying or fresh deleveraging. Institutional ETF flows and long-term accumulation will be key drivers for tightening supply and supporting higher prices over time.
Conclusion
What appears as a price setback could be the beginning of a healthier base-building phase: persistent withdrawals from exchanges, normalized funding rates, and cleared leverage create conditions that historically precede rallies. While technical indicators warrant caution in the near term, the broader on-chain picture remains constructive for Bitcoin’s next leg higher.
Source: crypto
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