Bitcoin (BTC-USD) Crashes to $110,843 in $380B Shakeout as ETF Inflows Defy Panic

Bitcoin (BTC-USD) Slides to $110,843 After $380B Wipe-Out as Fed Cut Bets, ETF Inflows, and Trade War Volatility Collide

Bitcoin (BTC-USD) faced one of its most dramatic weeks of 2025, plunging from an early-October record of $126,000 to a low of $107,486 before rebounding near $111,000–$114,000. The move erased roughly $380 billion in market capitalization in a single day, the largest liquidation event in digital-asset history. The drop followed President Trump’s 100 % tariff threat on China and new export controls on critical software, which ignited a full-scale trade war panic that spilled into every risk asset.

Historic Liquidation and Volatility Surge Shake the Market

Implied volatilities across 14-, 30-, and 90-day Bitcoin options jumped to their highest levels in 30 days, showing traders are bracing for major swings. Coinglass data reveals dense short positioning around $121,000–$123,000, setting the stage for forced liquidations if prices rebound. The Kobeissi Letter reported that the day’s $20 K candlestick was “nine times larger than any previous liquidation event,” confirming extreme leverage across derivatives desks.

Despite the crash, the spot ETF complex absorbed the shock. U.S. Bitcoin ETFs saw $2.72 billion in net inflows for the week ending Oct 10, led by BlackRock’s iShares Bitcoin Trust (IBIT) with $2.63 billion. Fidelity’s FBTC added $88.9 million, while Grayscale’s GBTC and ARK 21Shares ETF lost just $105 million combined. Those flows prevented a decisive break below the psychological $100,000 support.

Institutional Flows Defy Panic as ETFs Hold Nearly 4 % of Supply

Institutional appetite remains extraordinary. IBIT now controls roughly 800,000 BTC (≈ 4 % of circulating supply) and nearly $100 billion AUM, making it the fastest-growing ETF in U.S. history. Total Bitcoin ETF assets stand near $159 billion, representing 7 % of the network’s market value. Monday alone saw $1.21 billion of fresh inflows, the second-largest daily total ever recorded. Even after Trump’s tariff shock, BlackRock logged $74.2 million in new IBIT subscriptions on Friday, signaling deep-pocketed conviction.

Bloomberg’s James Butterfill noted that institutional investors are using every dip to re-enter, betting on Fed easing and dollar weakness. Polymarket odds price a 90 % chance of a 25-bp rate cut this month, a backdrop historically supportive for Bitcoin’s momentum.

Macro Tensions Tie Bitcoin to Safe-Haven Rotation

As risk appetite collapsed, gold soared to $4,050 per ounce, its highest price on record, while Bitcoin slid 8 % to $110,982. The 40-day rolling correlation between Bitcoin and the S&P 500 remains elevated at 0.73, proving that digital assets still behave like high-beta risk plays. Treasury yields reflected the rush to safety—1-year U.S. notes fell to 3.61 %, the lowest since 2022—while the PCE inflation index climbed 2.7 % YoY, the strongest in six months.

Bond markets now price multiple rate cuts through Q4, a scenario that could reignite Bitcoin once fiscal stability fears cool. Billionaire Ray Dalio warned that U.S. debt levels threaten “the monetary order,” a comment widely cited as validation for Bitcoin’s store-of-value thesis.

Derivatives Flash Defensive Signals Amid ETF Strength

Bitcoin’s 30-day options delta-skew spiked to +8 %, indicating traders are paying a heavy premium for downside protection. At the same time, monthly futures trade at a 7 % premium to spot—healthy, but below the 10 % typical of strong bull phases. This implies professional traders remain cautious despite nine consecutive days of ETF inflows.

China-based USDT premiums, a barometer of liquidity stress, slipped below parity during the worst of the crash but normalized after Bitcoin’s dip under $120 K, suggesting that selling pressure has begun to ease.

“Uptober” ETF Frenzy and the Expanding Product Pipeline

October’s seasonal rally—nicknamed “Uptober”—is still alive. The SEC has received 31 new crypto ETF applications in the past two months, 21 filed in just eight days, underscoring institutional demand beyond Bitcoin and Ethereum. Analysts call this wave “the opening of the floodgates.” Bloomberg’s James Seyffart expects approval for additional altcoin ETFs before year-end, which could further amplify liquidity across the crypto complex.

Technical Landscape: Key Levels at $100 K and $125 K

Bitcoin currently trades below its 50-day EMA (~ $115 K) but comfortably above its 200-day EMA (~ $98 K), forming a short-term bearish yet long-term bullish structure.

• Upside: A sustained break above $115 K would expose resistance at $121.6 K, then $125.7 K, the previous record.

• Downside: Losing $110 K risks a retest of the 200-day EMA near $98 K; a close below that level would shift momentum firmly bearish.

RSI sits near 43, signaling neutral momentum after last week’s oversold reading of 37. Trading volumes remain elevated—roughly $70 billion daily, double September’s average—confirming active accumulation on dips.

Global Policy and Political Risk Keep Traders Alert

The U.S. Senate returns Oct 14 to vote on a stopgap funding bill that could end the government shutdown. A successful vote would likely lift Bitcoin alongside broader markets. Conversely, a continued fiscal impasse may drag BTC toward the $100 K floor. The upcoming APEC Summit also matters: further tit-for-tat tariffs from China could spark another wave of liquidations, while any sign of diplomacy may fuel a rebound.

Institutional Targets and Forecast Divergence

Major houses remain broadly bullish despite short-term chaos.

• Standard Chartered: base $135 K target; bull case $200 K.

• JPMorgan: sees $165 K by year-end.

• Morgan Stanley: projects a multi-quarter climb as liquidity returns.

• Bloomberg Intelligence: flags ETF penetration nearing 10 % of circulating BTC within 12 months.

Each forecast leans on expanding ETF ownership and reduced miner selling, with on-chain data showing miner reserves at a five-year low (1.82 M BTC) as transaction fees offset block rewards.

Emerging Narrative: Institutional Control of Bitcoin Supply

The new dynamic is structural. ETFs now command liquidity once held by retail exchanges. BlackRock, Fidelity, and ARK collectively hold more Bitcoin than any single miner or exchange wallet cluster. This consolidation has tightened available float, magnifying volatility around macro events. Analysts describe this phase as “the institutionalization of scarcity.”

Broader Crypto Context: Ethereum and Altcoins Track BTC

While Bitcoin held the $100 K line, Ethereum (ETH-USD) dipped under $4,000, closing at $3,752 after a 12 % drop. ETH-spot ETFs attracted $488 million in the same week, reinforcing a broad-based appetite for digital assets despite equity turmoil. The ETH/BTC ratio slipped to 0.034, its lowest in eight months, showing Bitcoin’s relative dominance during high-volatility periods.

On-Chain Health and Long-Term Fundamentals

Glassnode metrics indicate exchange outflows of 27,000 BTC in five days, the largest withdrawal streak since March 2024, often a sign of long-term accumulation. Wallets holding > 1,000 BTC rose 3.8 % week-over-week, while active addresses stabilized near 1.14 million daily. These figures show that conviction remains intact even as short-term traders reduce leverage.

Market Psychology: From Capitulation to Strategic Accumulation

Friday’s V-shaped bottom—sparked by record short-covering—marks a textbook capitulation phase. Funding rates flipped from +0.06 % to –0.03 %, meaning shorts now pay longs, a condition historically preceding medium-term rebounds. Options data reveal renewed interest in $125 K and $150 K calls for December expiry, echoing trader confidence in a year-end recovery.

Macro Tailwinds: Rate Cuts and Liquidity Return

If the Fed confirms a 25-bp cut later this month, real yields will compress, pushing capital toward high-conviction assets like Bitcoin. The dollar index already slid to 98.7, its weakest in 18 months. A dovish pivot would also ease funding conditions for crypto miners and ETF issuers, sustaining inflow momentum into Q4.

Final Outlook: Structural Bull Case Intact Despite Volatility

Despite the historic liquidation, the convergence of institutional demand, dovish policy expectations, and tightening supply supports a long-term bullish bias. Technically, maintaining closes above $110 K keeps the trend constructive; reclaiming $125 K would resume the broader bull market.

Verdict: Buy Bias — Short-term range $110 K–$125 K; mid-term target $150 K; long-term objective $200 K within 2026 cycle.
Bitcoin’s volatility remains extreme, but every correction continues to reinforce its evolution from speculative asset to globally institutional store of value.

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