
Over $15 billion in leveraged crypto positions were liquidated, resetting risk appetite.
Market sentiment plunged, but extreme bearishness often precedes technical bounces.
Long-term holders remain calm, with minimal selling pressure.
October seasonality favors a rebound, with BTC showing strong gains in past years.
Bitcoin (BTC) is currently trading at $109,292, marking a significant correction that pushed the price below the Short-Term Holder (STH) cost basis of $109,700 for the first time in five months.
This drop indicates increased stress among speculative traders, many of whom exited at a loss.
According to crypto analyst Maartunn, the sharp decline triggered a massive purge in leverage:
$11.8 billion in altcoin leverage was wiped out
$3.2 billion in speculative Bitcoin positions were liquidated

Bitcoin & Altcoin OI Leverage Flush
Source: Maartunn
This flush may seem dramatic, but it serves a critical function: resetting the market’s risk appetite. With excessive speculation cleared out, conditions may be ripe for a more sustainable recovery.
According to Maartunn:
“This kind of cleanup reduces market fragility, and could pave the way for more balanced upside.”
Market sentiment has taken a nosedive. Analyst Axel Adler Jr. noted that the Advanced Sentiment Index plummeted from 86% (extremely bullish) to just 15% (bearish) in a span of two weeks.
While this suggests a loss of confidence, it also opens the door to technical bounces. Historically, readings below 20% have led to short-term recoveries. However, Adler Jr. cautioned that:
Sustained recovery depends on the sentiment index rising back above 40–45%
The 30-day moving average of sentiment needs to trend higher to confirm momentum
On the bright side, Long-Term Holders (LTH) appear unfazed. Distribution is steady at around $76.7 million per week, and only 1.5% of STH are at a loss, a reassuring signal that panic hasn’t yet taken hold.
But there’s a caveat, as Adler Jr. warns:
“If short-term holder losses exceed 10%, or if market value dips below realized value, capitulation risk rises sharply.”
Historically, October has been one of Bitcoin’s strongest months. Since 2019, Bitcoin has closed October in the green every year, averaging +21.89% returns. Even during the 2022 bear market, BTC gained 5.53% in October.
Bitcoin economist Timothy Peterson suggests the recent pullback is part of the usual September weakness. In fact, his data shows:
September 25th is historically the median low for the month
Bitcoin finishes the next 5 days higher 80% of the time, with +1.7% average gain

10-year Bitcoin Seasonality Trend
Source: Timothy Peterson
Peterson also highlighted a compelling trend:
60% of Bitcoin’s annual performance typically occurs after October 3rd
There is a 50% probability BTC hits $200K by mid-2026, driven by seasonal momentum from October to June
“This is the September capitulation,” said Peterson. “We could be at the turning point for the next leg up.”
Given historical performance, current sentiment resets, and long-term holder stability, October could be the launchpad for the next bullish phase, but it’s not without risks.

Bitcoin’s Historical Returns
Source: CoinGlass
Here’s a quick snapshot of the outlook:
Historical October gains average +21.89%
Leverage flush reduces market risk
Long-term holders remain steady
Technical setups favor a bounce at extreme sentiment lows
Short-term holder losses creeping up
Sentiment remains fragile
Failure to reclaim $110K could invite more downside
Yes, based on historical trends, October is typically a strong month for Bitcoin, averaging over 21% returns in recent years.
A combination of excessive leverage, speculative trading, and typical September seasonality led to the recent correction.
The short-term holder cost basis at $109,700 is a critical support. A break below this level with rising losses could trigger capitulation.
According to analyst Timothy Peterson, there’s a 50% chance BTC hits $200K by mid-2026, driven by seasonal trends between October and June.
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