The October 10th crash is still killing institutional demand and its getting worse

Bitcoin is back around the 90k level after dipping below it again this week and honestly the damage from that October 10th liquidation event is still haunting the market. We are down nearly 30 percent from the roughly 126k high and the move has basically erased this years gains.

That crash triggered over 19 billion dollars in forced liquidations over roughly a 24 hour window the largest wipeout the crypto market has ever seen. Since then institutional style demand has clearly weakened. Spot bitcoin ETFs flipped from steady inflows to heavy outflows with BlackRocks iShares Bitcoin Trust seeing about 523 million dollars leave in a single day this week its biggest daily outflow since launch.

What makes this worse is people are still using high leverage trying to time the bottom. Open interest in bitcoin perpetual futures on major venues like Binance jumped by more than 36k BTC last week worth over 3.3 billion dollars the biggest weekly increase since April 2023 according to K33 Research.

K33 is warning that perp open interest has reached its October peak again which systematically increases the risk of another squeeze. They argue a lot of this leverage came from resting limit orders to buy the dip near the recent lows that got filled as price slid with no real bounce leaving traders in leveraged positions they werent really prepared for. Historically when this kind of setup shows up bitcoin tends to lose more ground K33 notes that in six out of seven similar regimes over the past five years BTC went on to fall over the next month with average 30 day returns around minus 16 percent.

Until institutional buyers actually come back were probably gonna keep bleeding.