Bitcoin Longs Absorb $403.58 Million Liquidation Flush as Leverage Rebuilds

Wednesday's Flush Stayed Inside the Normal Band

Wednesday's session gave the leveraged side of the crypto market its first real test in weeks, and the cleanup that followed stayed far smaller than the October 10 crash it keeps being compared to. Bitcoin (BTC) price slid 1.7% during the session to about $84,100, while Ethereum (ETH), the largest proof of stake network, dropped 3.5% alongside it. The damage concentrated in long positions: $403.58 million in leveraged buy-side bets were wiped out within a single hour, and across the 24 hours to Wednesday morning the total reached $487.02 million as Bitcoin (BTC) fell 1.96%. The flush naturally revived memories of 10-10, when a rally built on borrowed money rather than fresh buying collapsed and almost $17 billion in longs were liquidated.

The comparison, however, runs in the market's favor. Wednesday's liquidation works out to roughly $248 million of forced selling for every 1% of downside. On 10-10 the same measure reached about $2.2 billion per 1%, nine times heavier, while ordinary 2025 corrections ran between $157 million and $504 million per percentage point. Forced selling of that size absorbs easily; a cascade requires selling that feeds on itself, and nothing in the tape suggests it did. As of this writing, Bitcoin, the largest proof of work asset, trades near $84,000, down 2.1% over 24 hours, and Ethereum sits at $2,615, down 3.6%, both roughly flat since the morning readings.

Leverage Rebuilt at a Lower Price

The more uncomfortable part is what sat underneath the dip. Open interest, the value of futures bets still open, rose 4.0% this week to 650,480 Bitcoin (BTC), a pace that mirrors the run-up ahead of the October 10 collapse, when it grew 4.1% in five days. Measured against market size, the load is a shade lighter than before the crash: Bitcoin's open interest now equals 3.2% of its market value against 3.7% then, and Ethereum's sits at 10.4% versus 11.3%. Dollar totals hide much of that adjustment, because since October 10, 2025, Bitcoin's open interest has fallen 38.6% in dollar terms but only 12.7% in coins, a gap explained mostly by the lower price. In other words, the market carries nearly as much leverage for its size as it did before 10-10.

What has changed is the cost of carrying it. Funding rates, the small payments long traders make to shorts to keep positions open, show how crowded the buy side is. They topped 8% annualized on 18 of 32 exchange-days on Binance and Bybit before the crash; this week they cleared 8% just once in 28 days and turned negative three times. Deribit's readings match, with daily Bitcoin (BTC) funding at 26.9% before 10-10 against 7.1% this week. A major fuel source has drained as well: Ethena's USDe, a dollar token backed by hedged derivatives trades rather than liquid staking collateral, has shrunk 66% to $4.99 billion, fitting the broader deleveraging since October. Positions are growing again, but no crowd is paying up to hold them, which leaves fewer stretched longs to topple at once.

Fed Meeting on Oct. 27-28

The dip also had a macro trigger, and the selling side was met with accumulation. Iran's expanded attacks on tankers in the Strait of Hormuz pushed Brent crude up about 1% to $101.50 a barrel and lifted the 10-year US Treasury yield 3 basis points to 5.31%, while the dollar gained against every G10 currency. On-chain data from Santiment recorded a net 24,073 BTC leaving centralized exchanges on Monday, the largest daily outflow since March 1, and wallets holding 10 to 10,000 BTC added 86,702 BTC over three weeks, their highest balance since April 23. US spot ETF products took in $118.8 million on the latest session, including $122 million into BlackRock's IBIT, and Robinhood said it added $25 million in Bitcoin to its balance sheet.

Updated liquidation readings from Coinglass show the flush extended through the day. In the 24 hours to 11:00 UTC on Tuesday, October 7, leveraged positions worth $473.45 million were closed out, with longs accounting for 92.28% of the total, more than 11.9 times the $36.57 million taken off shorts. Ethereum, not Bitcoin, bore the largest single-asset loss at $216.59 million, of which longs made up 95%, followed by Bitcoin at $154.05 million (92% long), Solana at $13.85 million, XRP at $13.33 million and Dogecoin at $10.83 million. Spot prices tracked lower on the newer reading: Bitcoin at $83,723, down 2.77% over 24 hours, and Ethereum at $2,579, down 4.90%, with XRP off 3.78% and Solana down 2.18%.

Bitcoin still reads as an uptrend on the composite scoring, but a soft one: spot sits at $83,268.01, down 2.90% in 24 hours, with the RSI at 53.72 and the MACD signal bearish. The nearest support is $82,489.77, a moderate shelf at 53/100 built from the swing low, the LVN200, a 1.5x ATR band and S4. Below it the levels harden: $79,400.18 at 62/100 (BB Lower, EMA 50, Supertrend, Keltner Lower), $75,763.46 at 72/100 (EMA 100, EMA 200, Fibo 0.382, Ichimoku Cloud Top) and $72,032.63 at 63/100 (SMA 100, SMA 200, Fibo 0.500, Ichimoku Cloud Bottom), with $68,894.27 at 49/100 as the deeper moderate layer. Resistance clusters overhead, with $87,566.38 the strongest at 88/100 (BB Upper, R2, Fibo 0.000, Keltner Upper) and $86,233.80 just beneath at 57/100. Derivatives show a market leaning long and paying a little for it: funding sits at 0.0026%, open interest stands at $16.09 billion, and 63.5% of accounts are long for a 1.74 long/short ratio. Sentiment runs hot at 71/100 (Greed) on the Fear & Greed Index, so a break under $82,489.77 would clear the way for the stronger $79,400.18 floor; a push through $87,566.38 would confirm the uptrend intact (as of 18:07 UTC).