Bitcoin experienced a thrilling roller coaster market in early October 2025, with investor sentiment rapidly switching between greed and fear. On October 11, the market had just gone through an "epic crash" from a high of $122,000 to $101,500, with a single-day drop of over 17%, triggering $19.1 billion in liquidations across the network. Just a few days later, the price quickly rebounded above $110,000, leading many to speculate whether a bull market had truly returned. In the short term, this is not a healthy rise but rather a violent fluctuation driven by high leverage trading and market sentiment.
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Three major drivers behind the wild price swings
The severe fluctuations in this market are not coincidental; there is a clear logical chain behind them:
High leverage as an "amplifier": Data shows that over 80% of accounts in the crypto space use leverage of more than 5 times. When prices pull back, programmatic stop-loss orders are triggered en masse, causing sell orders to snowball, directly leading to flash crashes. The flash crash that occurred after breaking $100,000 on October 6 was due to the same reason.
Macroeconomic sentiment affecting capital flow: Trump's comments on tariffs raised market concerns about economic risks, causing some funds to shift from cryptocurrencies to traditional safe-haven assets like U.S. Treasuries and gold, exacerbating selling pressure.
Increased correlation with U.S. stocks: The correlation between Bitcoin and U.S. stocks is growing. When U.S. stocks decline, the crypto market often faces pressure simultaneously, indicating that it is increasingly influenced by overall financial market sentiment.
The current market is at a critical game stage
Currently, the competition between bulls and bears is very intense, and the market structure is showing divergence:
On-chain data shows that whales and medium holders are net flowing out, indicating that large holders are wary of high-level risks; meanwhile, small and medium investors' positions remain relatively stable.
In the derivatives market, although the scale of liquidations has narrowed, the proportion of long liquidations still stands at 80.45%, indicating that long positions are generally under pressure.
From a technical perspective, prices have fallen below short-term moving averages, and upward momentum has weakened. $109,500 has become a key support level; if lost, it may test the psychological level of $100,000 again.
The market sentiment indicator "Fear and Greed Index" is at 71, in the "Greed" range, contrasting with a "Neutral" reading from a month ago, reflecting that investors remain optimistic in the long term but face extremely high short-term risks.
How should ordinary investors respond?
In the face of such a volatile market, staying calm is more important than chasing profits:
Do not blindly "catch the bottom." In the current market, it is extremely difficult to determine the so-called bottom, and chasing highs and cutting losses can lead to significant losses.
Strictly control leverage. High leverage can amplify profits during surges but can instantly go to zero during crashes; the $19.1 billion in liquidations is a bloody lesson.
Focus on core support levels. Pay close attention to the defense of the $100,000 and $109,500 positions, as this will determine the direction of short-term trends.
Be aware of policy risks. Except for the Hong Kong region, our country explicitly prohibits cryptocurrency trading, and participating in such activities carries legal and regulatory risks.
That's basically it. This round of market activity resembles a severe adjustment within a bull market rather than a stable start to a new bull market. High volatility will become the norm, and it is crucial to carefully assess one's risk tolerance.