Key Takeaways
Is Bitcoin’s Recent Dip a Signal for Capitulation?
Bitcoin’s on-chain metrics and $2.75 billion in realized losses suggest weak hands are folding, indicating a bear-controlled shakeout.
Could the $110k bounce be trusted?
Low spot demand and declining bids turned it into a bull trap, making a sub-$100,000 breakdown increasingly likely.
In crypto, every “dip” is usually an opportunity. However, that does not seem to be the case for Bitcoin [BTC]. After four straight days of losses, BTC looks on track to retest the $100,000 level for the first time in four months.
On-chain data flashes full capitulation signals. Short-term holders (hold > 155 days) are now break-even/capitulate after BTC fell below their level cost basis from $113k on October 14th.
This move suggests that weak hands are starting to fold. Bitcoin’s Net Realized Gain/Loss (NRPL) turned over red this week, as total realized losses rose to $2.75 billion in just 72 hours, marking the steepest spike since April.
Source: Glassnode
In short, Bitcoin is deep in a shakeout phase.
Notably, this exit liquidity is now contributing to BTC’s price action. Last week’s sudden crash sparked a 4% bounce that briefly contained $110,000 as support, but the subsequent 8% weekly pullback highlights declining bid depth.
Simply put, BTC is firmly in a bear-controlled market. Supply is recovering, but the bidding wall is struggle to absorb it, thus maintaining downward pressure on the price. Given this context, is Bitcoin now in full FUD territory?
By thinning out the bids, Bitcoin turns into a bull trap
Bitcoin’s break below $110,000 caused a textbook long squeeze.
On October 13, CoinGlass data shows that Binance’s Long/Short ratio shot above 60% long, creating a dense cluster of overleveraged positions that exceeded the 70% threshold.
Whales were clearly looking at a strong rise above $110,000, switching from short to long. However, when the market turned against them, these long positions were liquidated, leading to nearly $1 billion in market-wide liquidations.
Source: CoinGlass
Simply put, demand at the weak spot turned the rebound into a classic bull trap.
When the capitulation set in, the bid wall was not strong enough to absorb the pressure, showing that bulls are still not viewing the BTC “dip” as a buying opportunity. This makes a sub-$100,000 breakdown increasingly likely.
Against this backdrop, it makes sense to view the 8% weekly price decline as the beginning of a full FUD-driven capitulation rather than a “healthy reset,” given declining bids and ongoing liquidation stress.