Bitcoin Falls Below $108K Amid $320M Liquidations as Excess Leverage Gets Flushed Out

Market Overview - Bitcoin was trading below $108,000, specifically at $107,779, reflecting a 2.8% decline in the last 24 hours, with a market drop of 3.2% due to $320 million in liquidations and spot crypto ETF outflows [1][2] - Ether (ETH) and Solana (SOL) both experienced declines exceeding 3.5%, while many altcoins saw losses greater than 4% [1] - The CoinDesk 20 Index (CD20) indicated a decrease of approximately 3.5% [1] Liquidation and ETF Flows - A total of 122,919 traders were liquidated in the past 24 hours, amounting to $320.32 million, including a notable $2.98 million ETH-USDT order on Binance [2] - U.S. spot bitcoin ETFs recorded a net outflow of $40.4 million on October 20, with BlackRock's IBIT contributing $100.7 million to this outflow [2] Market Sentiment and Open Interest - The Crypto Fear & Greed Index indicated a sentiment level of "Fear" at 34 [2] - Open interest (OI) fell by about 30%, indicating a reduction in excess leverage, with funding rates approaching neutrality, suggesting a more balanced market positioning [3] Future Market Outlook - The reduction in leverage and near-neutral funding conditions may lower the likelihood of another forced-selling event, even amidst volatile price movements [4] - Analyst Michaël van de Poppe noted that Bitcoin's monthly chart is currently moving sideways, indicating a pause that may allow for the elimination of excess leverage before a potential upward movement [4]