Bitcoin fell below $81,000 early Thursday before recovering above $82,000, after a leverage-driven sell-off liquidated roughly 180,000 traders and nearly $1.1 billion in positions over 24 hours. Long positions accounted for about $935 million of the total, showing that traders positioned for further gains absorbed most of the losses.
The largest cryptocurrency touched approximately $80,400 before rebounding to around $82,500. Ether followed the move lower, falling near $2,400 and then recovering to just below $2,500. The rapid reversal offered some relief, but trading data points to a market where derivatives positions and short-term selling have had greater influence than fresh spot-market demand.
Glassnode estimated that the seven-day average volume across Bitcoin spot markets and US-listed Bitcoin ETFs was about $6.8 billion, a level lower than roughly 90% of readings since January 2024. Thin trading conditions can magnify price moves because fewer buyers and sellers are available to absorb large orders or forced liquidations.
Short-term holders sent bitcoin to exchanges at losses
CryptoQuant analyst Darkfost reported that short-term holders transferred more than 50,000 BTC to exchanges during the day’s peak selling period. More than 29,500 BTC of that total, or about 59%, moved at a loss.
According to Darkfost, it was the largest realized-loss transfer volume from short-term holders in nearly four months. Such flows typically indicate that recently acquired coins are being sold or positioned for sale as prices move against their holders, increasing immediate pressure on exchange order books.
The liquidation figures show how quickly that pressure spread through futures markets. Traders using leverage can be automatically closed out when prices cross exchange-set thresholds, creating market orders that push prices further in the same direction. Thursday’s move appears to have followed that pattern: a spot decline was followed by substantial long liquidations, then a partial rebound once selling eased.
Glassnode’s Oct. 7 liquidation heatmap placed a large nearby band of potential liquidations between $81,700 and $83,300. The research firm said only about 17% of tracked liquidation levels sat above the prevailing price, while support below spot had expanded by around half over the previous week.
The next major liquidation area was near $75,000, Glassnode said, followed by the largest cluster between $60,000 and $63,000. These levels do not predict where Bitcoin will trade, but they can become relevant when markets are heavily leveraged, since a break through a crowded range can trigger forced buying or selling.
Government wallet transfers add to supply concerns
On-chain tracker Lookonchain reported that US government-linked wallets moved 17,733 BTC, valued at about $1.48 billion, and 750 WBTC worth roughly $62 million to Coinbase Prime over the past three days. Bitcoin declined 6.9% over the same period.
The timing has drawn attention because large transfers to a platform offering custody and trading services can precede asset sales. A deposit alone does not establish that coins were sold, and the transfers cannot by themselves explain Bitcoin’s price move. Yet the activity adds a potential source of supply during a period when spot trading volume has been subdued.
Galaxy Research estimated that the US government holds about 319,100 BTC. Roughly 71% of that amount is associated with Bitcoin connected to the LuBian case and Bitfinex recovery proceeds, according to the firm. The scale of those holdings means government wallet activity can affect market expectations even before any confirmed disposal takes place.
A separate on-chain transaction tracked by analyst Yu Jin showed Fishpool co-founder Wang exchanging 235.5 WBTC, valued at about $19.31 million, for 7,848.5 ETH after the market drop. The transaction implied an Ether price near $2,460 and an ETH/BTC rate of 0.03. The swap represented a shift between major cryptoassets rather than a direct exit into cash, but it reflected active repositioning during the decline.
Demand indicators remain mixed
Recent data suggests selling pressure is not coming uniformly from every major holder group. Glassnode said on Oct. 5 that the net trend of Bitcoin whale deposits to exchanges had turned negative after more than three months of positive deposits that ended in late August. Negative exchange flows can indicate that large holders are moving coins away from venues where they could be readily sold.
CryptoQuant also reported that miners have not resumed the large-scale Bitcoin selling seen before Bitcoin reached $76,000 on Aug. 21. The firm said miner economics had shifted from “extremely underpaid” to “fairly paid,” reducing the immediate incentive for distressed selling. Miner outflows have not returned to extreme levels since that change, CryptoQuant said.
Darkfost added that total Bitcoin demand had returned to positive territory at more than 14,000 BTC, while average futures demand stood near 32,000 BTC. Spot demand had improved sharply from minus 207,000 BTC on Sept. 20 to around minus 17,000 BTC. The improvement suggests selling conditions have eased from late-September levels, although spot demand remained slightly negative in the analyst’s measure.
Higher prices have relied partly on existing supply turnover
Glassnode’s assessment of capital flows provides a more cautious backdrop for the recent market structure. Over the 30 days through Oct. 5, realized crypto market capitalization rose by about $12.8 billion, while combined buying by ETFs, stablecoins and corporate treasuries totaled approximately $4.9 billion.
The gap indicates that a significant portion of the rise in realized capitalization came from existing supply changing hands at higher prices rather than identifiable new demand from those buyer categories. That structure can leave prices more exposed when short-term holders begin selling and leveraged positions are crowded.
Chris Kuiper, vice president of research at Fidelity Digital Assets, wrote on Oct. 7 that Bitcoin’s post-August movement could represent either the beginning of a renewed advance or a rebound within a bear market. Kuiper cited November as a reference point in discussions of Bitcoin’s four-year cycle, while cautioning that prior cycles have never repeated with exact timing.
TD Cowen separately raised its longer-term Bitcoin forecast, projecting a price of roughly $109,000 by the end of 2026 and $280,000 in 2029. Those estimates sit alongside a market facing nearer-term pressure from weak spot turnover, forced derivatives selling, and uncertainty around the destination of large government-controlled Bitcoin balances.
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