October Witnessed Record Crypto Liquidations, Analysts Describe It as a ‘Minor Miracle’ – Are Bulls Victorious?

Bitcoin has withstood the largest liquidation event in cryptocurrency history, with October (Uptober) remaining in positive territory, leading analyst Scott Melker to describe it as “a small miracle.”

The $21 billion deleveraging event eliminated leveraged positions across the top 100 cryptocurrencies, yet Bitcoin is trading around $113,000 after briefly dipping to $102,000 during Friday’s crash, which was triggered by escalating trade tensions between the U.S. and China.

Melker noted on Tuesday that although he anticipated “October to be deep in the red” following the unprecedented liquidation, the market’s resilience has altered his perspective.

“I don’t think we’re entering a bear market,” he remarked, adding, “this isn’t 2017. Nor is it 2021. What occurred last week was purely structural.“

After the largest liquidation in crypto history, I expected October to be deep in the red. Somehow, it’s still holding on. Which honestly feels like a small miracle.
Let’s get this out of the way: I don’t think we’re entering a bear market.
If I wanted to argue that, I could -…

— The Wolf Of All Streets (@scottmelker) October 14, 2025

The liquidation prompted a reassessment of risk as Bitcoin declined by 7% and Ethereum fell by 12%.

The rise of gold past $4,100 supports Melker’s assertion that “investors aren’t panicking, they’re reallocating.”

On-chain metrics indicate that 97% of the circulating supply is profitable, with short-term holders representing 44% of realized capitalization, the highest level ever documented.

Bitcoin Market Enters Speculative Phase as New Whales Dominate

A CryptoQuant analyst reported that Bitcoin’s Net Unrealized Profit/Loss (NUPL) is currently at +0.52, a range historically linked to the transition from optimism to euphoria.

Source: CryptoQuant

In previous cycles during 2017 and 2021, NUPL values exceeding 0.5 indicated that most investors were in profit, fueling speculative behavior prior to corrections.

The analyst noted that short-term holders currently control 44% of Bitcoin’s realized capitalization while long-term holders are realizing profits, shifting dominance to “new whales.”

Source: CryptoQuant

This transition typically aligns with the final expansion phase of bull markets.

However, ETF inflows, increasing stablecoin liquidity, and institutional involvement are effectively absorbing selling pressure.

According to CryptoQuant’s report from October 14, the stablecoin market capitalization increased by $14.9 billion over 60 days, marking the fastest growth since January, providing capital capacity to support the recovery.

XwinFinance analysts observed that “the key signal to monitor next will be a decline in STH share, which would indicate the beginning of a renewed accumulation phase led by long-term investors.“

Bitcoin’s Bull Score Index fell from 80 to 20 following the liquidation, while Apparent Demand shows a 30-day decline of 111,000 BTC, the steepest since April.

Despite weakened fundamentals, whale accumulation remains robust, with the 1-year holdings change surpassing its moving average on October 8.

Infrastructure Expansion Supports Bull Case Despite Structural Weakness

Melker highlighted that infrastructure development is ongoing despite market volatility.

“Public companies are adding BTC to their balance sheets. Luxembourg has just made Eurozone history. CME is preparing for 24/7 trading. States are gearing up to purchase Bitcoin.“

He referenced Howard Marks: “Valuations are high but not crazy. Expensive and going down tomorrow are not synonymous.”

This viewpoint acknowledges elevated prices while dismissing the notion of an inevitable correction.

Bitcoin surged from $114,000 to $117,000, reaching $126,000 prior to the liquidation, driven by record ETF inflows exceeding $2.2 billion.

The breakout converted 190,000 BTC into support, adding structural depth.

Notably, rising leverage preceded the crash.

A Glassnode report earlier this month indicated that Futures open interest reached new highs while funding rates surpassed 8% annualized.

Options markets also displayed crowded positioning, with the 25-Delta Skew narrowing from 18 volatility points to just 3, a 21-point shift in under a week.

While Uptober has experienced both positive and negative developments, data from Timothy Peterson suggests that “Bitcoin’s most explosive Uptober moves generally happen in the second half of the month,” indicating that historical trends support continued strength.

October has consistently yielded gains in 10 of the past 12 years.

Technical Outlook: Wick Fill Expected Before Recovery Attempt

Bitcoin is currently trading at $112,600 after the flash crash to $102,000, with analysts anticipating a wick fill toward $109,513, which represents the 50% retracement level.

Similarly, MVRV analysis from Ali Martinez indicates Bitcoin is approximately 19.4% above the Mean fair value band at $96,526, creating a risk of correction if the +0.5σ resistance at $119,018 cannot be reclaimed.

Bitcoin $BTC must reclaim $119,000 to maintain bullish momentum! Otherwise, the Pricing Bands signal a correction toward $96,530. pic.twitter.com/I7IGhKcXjX

— Ali (@ali_charts) October 15, 2025

The current positioning between the Mean and +0.5σ suggests a greater downside risk toward fair value than upside potential.

Bitcoin has stabilized above the 135-day moving average, while the Young Supply MVRV has reset toward 1.0, a level that often indicates the market is cooling from speculative extremes while retaining its structure.

Looking ahead, Bitcoin faces a likely downside toward the $109,500 wick-fill target and potentially $105,000-$107,000 if selling pressure escalates.

The crucial test remains whether these levels will provide recovery support or merely pause a deeper correction toward the $96,500 MVRV fair value.

Failure to reclaim $115,000 Traders’ Realized Price confirms weakened momentum, while breaking above $119,000 would validate the “small miracle” narrative and resume bullish structure toward year-end.

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