After the great liquidation event, Bitcoin had initially rebounded, but it has continued to fall in recent days, especially due to the tightening of credit in U.S. regional banks, leading Bitcoin to face another "Black Friday", with prices dropping to $104,000 at one point. Initially, in early October, influenced by the U.S. government shutdown, the price of coins reached a new high driven by funds seeking fiat hedging, in sync with gold. However, since this week, while gold continues to reach new highs, Bitcoin's trend has diverged from it. Given the continuous decline in the prices of mainstream crypto assets, there are increasing voices in the market discussing whether the crypto bull run has ended and if a bear market is imminent.

Support for the view that the bull run will continue:
1. The market structure remains a bull run, with the key support of Bitcoin's 10-day moving average crossing below the 20-day moving average, but the 50-day and 200-day moving averages, which are commonly used to judge golden crosses or death crosses, have not crossed. In the short term, Bitcoin's price is under pressure, but there is no clear signal indicating a sustained fall. The chip structure remains very stable, with no signs of collapse. This time it stabilized around $104,000, which is exactly the support level, once again validating the effectiveness of the support level. The liquidation map also shows that the liquidation pressure is greatest between $104,000 and $107,000. If it does not continue to fall below $104,000, it indicates that the market is stabilizing.
2. The price is falling, but the exchange's position shows a net outflow. When the net inflow of funds in the exchange wallet increases, it may indicate that investors are transferring large amounts of Bitcoin into the exchange. This is usually interpreted as investors possibly preparing to sell Bitcoin, which is a potential bearish signal. Conversely, when the net outflow of funds in the exchange wallet increases, it may indicate that investors are withdrawing Bitcoin from the exchange to their own cold wallets. This is generally interpreted as investors leaning towards holding for the long term, which is a potential bullish signal. Currently, although the price has decreased, the positions exiting the exchange are at their highest in nearly a year. This indicates that when the price falls, a large number of investors are still buying BTC, rather than engaging in massive panic selling, which is a typical strong accumulation signal, meaning that long-term holders are using the dip to continue increasing their positions.
3. Whales are buying up
From the perspective of coin distribution, whales holding 1k-10k Bitcoins and giant whales holding over 10k Bitcoins have been continuously offloading this year, while sharks holding 100-1k Bitcoins have been steadily increasing their Bitcoin holdings. However, from a weekly perspective, both whales and sharks significantly offloaded last week, while giant whales basically acquired all these Bitcoins, going against the trend and increasing their Bitcoin holdings.
4. The market is in the fear zone, which may be a suitable buying position. The current Fear and Greed Index has dropped to a low level, falling to around 22 as of October 19, but has not entered the extreme fear green zone. The recent events that have continuously remained in the extreme fear zone are the COVID-19 pandemic in 2020, the Luna and FTX collapses in 2022, and the hedging behavior triggered by Trump's tariff policy in 2025.
5. The macro environment remains favorable.
The Federal Reserve has restarted interest rate cuts, and the market currently prices in two more cuts by 2025. Additionally, Powell's recent statements indicate that QT will end in the coming months, which are all macro-positive signals. Moreover, the U.S. government is currently in a shutdown state, and most of the funds accumulated in the TGA account from previous bond issuances are frozen, making it difficult to release liquidity into the market. If the government shutdown ends, this liquidity will enter the market and support asset performance. Gold has hit a new high during recent panic events, and with the improvement in liquidity, this portion of funds may flow into crypto assets in the future. As sentiment in the crypto market stabilizes after the major liquidation events, Bitcoin is expected to rebound again. However, this is on the condition that there are no systemic risks in the U.S.
Believing that a Bear Market is about to begin:
1. The crypto market may enter a deleveraging process.
After this liquidation event, many institutions and high-risk contract players were severely injured, and the market as a whole will undergo a deleveraging process. It can be seen that the contract open interest has significantly decreased, and market makers will also reduce their market-making scale after suffering severe injuries in the short term. The overall market is in a deleveraging process. 2. The bull run phase after the halving has ended.
The Bitcoin market has historically followed a roughly four-year halving cyclical pattern, which is typically divided into four phases: accumulation (Bear Market bottom), uptrend (bull market), distribution (top oscillation), and downtrend (Bear Market). Historical data shows that 12-18 months after the halving usually marks the peak of a bull run, followed by a Bear Market. October 2025 (about 18 months after the halving) is within this window. This major liquidation is also seen as a sign of the cycle's peak, suggesting that the momentum for subsequent Bitcoin price increases may be insufficient.
3. The current macro environment is not as favorable as the bull run of 2020-2021, which benefited from the Federal Reserve's massive QE ($4 trillion) and low interest rate environment, driving up risk assets such as BTC. In 2025, although the Federal Reserve may lower interest rates, the overall monetary policy is relatively cautious, lacking similar large-scale stimulus.
4. The possibility of systemic risk in the United States has increased. During the trading session on Thursday, two regional banks in the U.S.: Zions Bancorp (Zions) and Western Alliance Bancorp (Western Alliance) disclosed bad loan issues related to alleged fraud, leading to a collective decline in regional bank stocks, raising market concerns. Coupled with two significant bankruptcy events in September: subprime auto lender Tricolor and large auto parts supplier First Brands. Investors are worried about the deteriorating credit status of commercial clients. Jamie Dimon stated, "When such incidents occur, my vigilance increases. I shouldn’t say this, but when you see one cockroach, there are likely more hiding. Everyone should remain alert to this." In terms of liquidity, the reserves of commercial banks at the Federal Reserve fell below $3 trillion in late September, a threshold regarded by several Federal Reserve officials as the dividing line between "ample reserves" and "tight reserves," indicating rising liquidity pressure. As liquidity pressure builds, regionally-based small and medium-sized banks with weak risk resistance are naturally the first to be affected. Currently, the balance in the Treasury General Account (TGA) is close to $850 billion, with funds overflowing (replenishment completed in mid-September), but due to the government shutdown starting October 1, the Treasury TGA account has money that cannot be spent. Although the government shutdown will eventually end, and the Federal Reserve will still initiate interest rate cuts, the market has already priced in a considerable amount of rate cut expectations, so the further positive effects may be limited. If subsequent rate cuts are less than expected, the market may experience a price correction, putting further pressure on Crypto Assets.
5. The US stock market faces a risk of correction. The cash holding ratio of US fund managers fell to 3.8% in October, hitting a nearly 12-year low. Generally speaking, a ratio above 5% indicates a low risk appetite, suggesting the market is nearing the bottom, while a ratio below 4% implies that positions are full and funds are tight, often signaling a short-term peak or correction. The current 3.8% indicates that fund managers have little cash on hand, and the short-term US stock market may enter a profit-taking phase. A correction in the US stock market may further impact Crypto Assets.
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