‘Uptober’ Saw Crypto’s Biggest Liquidation Ever, Yet Analysts Call It a ‘Small Miracle’

Core Insights - Bitcoin has shown resilience by surviving the largest liquidation event in crypto history, with a total of $21 billion in leveraged positions wiped out, yet it trades around $113,000 after a brief dip to $102,000 [1] - Analyst Scott Melker suggests that the market's recovery indicates that it is not entering a bear market, contrasting the current situation with previous years like 2017 and 2021, attributing the recent events to structural changes rather than panic selling [2] - On-chain data indicates that 97% of Bitcoin's circulating supply is in profit, with short-term holders representing 44% of realized capitalization, marking a historical high [2][4] Market Dynamics - Bitcoin's Net Unrealized Profit/Loss (NUPL) is currently at +0.52, a level historically linked to a shift from optimism to euphoria, suggesting a speculative phase in the market [3] - The dominance of short-term holders, now controlling 44% of Bitcoin's realized capitalization, indicates a transition to "new whales," which typically occurs during the final expansion phase of bull markets [4] - The stablecoin market capitalization has increased by $14.9 billion over the past 60 days, the fastest growth since January, providing necessary capital to support Bitcoin's recovery [5] Market Indicators - Following the liquidation event, Bitcoin's Bull Score Index dropped from 80 to 20, while Apparent Demand has seen a 30-day decline of 111,000 BTC, the steepest drop since April [5] - The market is currently absorbing sell pressure due to ETF inflows, expanding stablecoin liquidity, and increased institutional participation [4]