Bullish Bitcoin bets unraveled below $110K: Will October revive risk-on sentiment?

Key takeaways:

• Bitcoin suffers its steepest weekly decline since March, slipping under $110,000.
• Over $15 billion in leveraged positions were flushed out, signaling a reset in risk appetite.
• October seasonality has historically delivered strong Bitcoin gains.

Bitcoin (BTC) is enduring its sharpest weekly decline since March 2025, with prices dropping over 5% and sliding below the $110,000 mark. The correction has hit short-term traders hard, as more than 60,000 BTC were sent to exchanges at a loss this week.

This marked the first time in five months that Bitcoin fell under the short-term holder (STH) cost basis of $109,700, a level that could signal stress among speculative market participants.

At the same time, the drawdown has exposed the scale of risk-on positioning across the crypto market. Crypto analyst Maartunn noted that $11.8 billion in leveraged altcoin bets and $3.2 billion in speculative Bitcoin positions have been flushed out, pointing to a significant reset in risk appetite. The analyst argued that this cleanup could help reduce market fragility, paving the way for a more balanced recovery.

Bitcoin and Altcoin open interest leverage flush. Source: Maartunn/XMarket sentiment has also shifted sharply. Bitcoin researcher Axel Adler Jr. noted that the Advanced Sentiment Index plunged from 86% (extremely bullish) to just 15% (bearish) in two weeks. While zones below 20% often trigger technical bounces, Adler Jr. stressed that sustained recovery will require sentiment to climb back above 40–45% with the 30-day moving average trending higher.

Bitcoin Advanced Sentiment Index. Source: Axel Adler Jr./XLong-term holders (LTH) appeared stable as distribution remained subdued at $76.7 million per week. Meanwhile, only 1.5% of STH are at a loss, with most still in profit, limiting the risk of forced liquidations

However, Adler Jr. cautioned that capitulation risks would rise if STH losses exceeded 10% and market value dipped below the realized value.

Related: Bitcoin sees most fear since $83K as analysis eyes ‘turning point’

October seasonality to the rescue?

While the short-term picture looked fragile, Bitcoin’s current path is not far off from historical seasonality. September typically delivers negative returns, averaging −3.43%, and BTC has so far managed to remain slightly positive at +0.68%.

Bitcoin network economist Timothy Peterson suggested the latest pullback fits neatly into past patterns. “This is the September capitulation,” Peterson said, “On my daily tracking sheet, Sept. 25 is the lowest median value. Bitcoin finishes the next five days higher 80% of the time, with an average gain of 1.7%.”

10-year Bitcoin seasonality trend by Timothy Peterson. Source: XPeterson also highlighted that 60% of Bitcoin’s annual performance occurs after Oct. 3, with a high probability of gains extending into June. The economist even projected a 50% chance of Bitcoin hitting $200,000 by mid-2026, citing seasonality-driven bull phases between October and June.

History also lends weight to optimism. Since 2019, Bitcoin has closed October in the green every year, averaging returns of 21.89%. Even during the bear market of 2022, BTC posted a 5.53% gain that month. If the pattern holds, the current wave of pain may soon give way to renewed upside as the market enters its most seasonally bullish stretch.

Bitcoin historical returns data. Source: CoinGlassRelated: Bitcoin crumbles below $109K, but data shows buyers stepping in

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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