Bitcoin plunges after briefly breaking above $113,000…"Two-way liquidations amid high volatility"

Bitcoin (BTC) briefly surpassed $113,000 and then gave back all gains, causing large losses for investors on both sides. With market-wide confidence still fragile, volatility is expected to continue through the end of October.

On the 22nd (local time), CoinDesk reported that over the past 24 hours Bitcoin traded between $107,000~$113,000 and roughly $600 million worth of leveraged positions were liquidated. According to CoinGlass data, $355 million of long positions and $310 million of short positions were liquidated, respectively. These liquidations are analyzed as the result of cascading position unwinds in a market with thin liquidity following the sharp swings.

Alexia Theodorou, head of derivatives at Kraken, said, "Despite the plunge, the long-short ratio in the Bitcoin futures market is recovering to neutral levels," and added, "This adjustment shows traders who judged the drop to be excessive are gradually preparing for a rebound."

After a sharp rise the previous day, Bitcoin was pushed back from the $113,000 level and fell toward the 200-day moving average ($108,000). Alex Kuptsikevich, FxPro's chief analyst, analyzed that "Bitcoin has entered a short-term downtrend and is likely to remain in a long-term consolidation phase near the 200-day line."

Wenny Cai, co-founder of SynFutures, said, "The market is reacting sensitively to macro variables such as interest rates and geopolitical risks," adding, "In an environment with thin liquidity, shifts in investor sentiment immediately lead to sharp price movements."

Meanwhile, data show that buying by long-term Bitcoin holders has been maintained, and inflows into spot exchange-traded funds (ETFs) have also remained steady.