Bitcoin (BTC) begins a critical week in October with the fate of the bull market hanging by a thread—what will happen next?
Bitcoin has rebounded strongly from the largest liquidation wave in history, reaching a peak of $116,000.
Traders are divided on the future direction of the market—some even question whether the bull market can re-emerge.
Leverage has been significantly reset, easing bullish sentiment, but bearish pressure remains.
U.S. inflation data has been delayed due to the government shutdown, and Federal Reserve Chairman Powell is set to speak.
With gold hitting new highs, the "devaluation trade" in the crypto market is drawing attention.
Bitcoin successfully rose back to $116,000, entering a new week, with weekly closing volatility occurring as expected.
Data from Cointelegraph Markets Pro and TradingView shows that Bitcoin rebounded 5.7% from a low of $109,700 on Friday, following a rare liquidity liquidation in the crypto market.
A tariff announcement in the U.S.-China trade war triggered unprecedented market panic.
Stocks and gold were also impacted—but by Monday, gold had reached a new high of $4,078 per ounce.
According to trading information account The Kobeissi Letter's ongoing reports on X platform, "If including after-hours futures declines, the S&P 500 opened up 120 points."
The crypto market's market capitalization has increased by over $500 million since Friday's low. Some bearish traders have accurately timed the market rhythm, with co-founder Adam Kobeissi stating that this rebound is "game over."
He said, "This is one of the largest and fastest wealth transfers in crypto history."
U.S. President Trump’s remarks on Truth Social triggered a market crash, and similarly helped the market recover.
On Sunday, he wrote on social media, "Don't worry about China, everything will be fine!"
The events of the past few days have made Bitcoin's price volatility particularly pronounced. According to crypto quantitative analyst Frank A. Fetter, implied volatility has risen to its highest level since April—right at the peak of the tariff crisis.
He told his followers on X platform, "BTC implied volatility just skyrocketed: the market is currently pricing in greater potential volatility. Finally, this moment has arrived."
Fetter seems to suggest that the performance, which should have marked the peak year of Bitcoin's latest bull market, has been lackluster. Cointelegraph previously reported concerns that BTC/USD may not be able to replicate its historic peak in the fourth quarter.
Trader Roman, who has long been skeptical about the strength of the bull market, believes the latter is clearly the case.
He posted with an accompanying image on X platform, "Last week's flash crash just rebounded at the diagonal uptrend support level of 40,000 since August 2024."
Roman added that breaking below the diagonal trendline "will 'officially' confirm a new macro downtrend and may confirm a bear market."
A more optimistic market view comes from trader Skew, who observed that "large players" entered the market when Bitcoin's price returned to $115,000.
$BTC Looks like $115K was a key trigger for some large players too (likely a firm) pic.twitter.com/ta9w5iafia
He stated, "As long as the price does not close below $112,000 on the 1D and the next 1W, the overall performance is still quite good." He set the key challenge for bulls at $120,000.
Trader SuperBro reminded his followers on X platform that "liquidation hotspots should be monitored."
According to the latest market data from on-chain analysis platform Glassnode, the funding rates on derivatives exchanges have dropped to bear market lows.
It stated on X platform on Sunday, "The funding rates in the crypto market have fallen to their lowest level since the depths of the 2022 bear market."
According to CoinGlass data, over $20 billion in assets disappeared from exchanges between Friday and Sunday, before rebounding from $69 billion to $74 billion.
Glassnode co-founder Rafael Schultze-Kraft confirmed on X platform, "We witnessed the largest scale of liquidated contracts in history. Just Bitcoin alone saw over $10 billion in open contracts wiped out across all major exchanges."
Schultze-Kraft noted that due to incomplete market data reports, the actual scale of liquidation "is almost certainly larger."
He added, "Our Bitcoin long-short preference chart tracks the net positions of Hyperliquid's largest Bitcoin traders. Since October 6, net shorts have risen significantly, and this was before Friday's event."
Due to the government shutdown, two key U.S. inflation indicators may be delayed this week.
The September Producer Price Index (PPI) and initial jobless claims were originally scheduled for release on October 16.
The shutdown has shifted focus to other areas, particularly senior Federal Reserve officials who have public speaking engagements in the coming days. This includes Chairman Powell, who will deliver a speech on "Economic Outlook and Monetary Policy" at the National Association for Business Economics (NABE) annual meeting in Philadelphia.
The market will closely watch Powell's words to gauge whether there are any signals for future interest rate cuts—something that risk asset traders are hoping for in terms of liquidity benefits.
According to CME Group's FedWatch tool, the market almost unanimously expects the Federal Reserve to cut rates by 0.25% at the October 29 meeting.
According to trading information agency Mosaic Asset Company in the latest issue of "The Market Mosaic" newsletter, officials have "deep divisions" regarding the timing and magnitude of future rate cuts.
It wrote, "The minutes from the last rate decision meeting show that the Federal Reserve is still committed to an accommodative policy."
Cointelegraph previously reported that the weak labor market is currently a focus for the Federal Reserve.
Amid short-term market turbulence, crypto and risk assets may be at the starting point of a larger upward trend, closely related to a shift in attitudes towards the dollar and fiat currencies.
Mosaic Asset Company stated, "Bitcoin will reach a new high in 2024, peaking at $125,000."
With gold hitting a historic high on Monday, Mosaic turns to the new challenges that may face bullish risk asset traders in the coming months: inflation.
"In the wake of increased global money supply and soaring government debt levels, precious metals and popular cryptocurrencies have been buoyed by concerns over currency devaluation. Another symptom of currency devaluation may be an inflation wave in the coming months," it continued.
Mosaic cited the "payment prices" component from the Federal Reserve's recent business survey, stating that it is typically a leading indicator of inflation trends.
"While the increase in the payment price index coincides with the start of the trade war, currency devaluation may also be a potential driver of inflation," it added.
The overall characteristics of this year's market may exacerbate any future surprises in the macroeconomic narrative.
The Kobeissi Letter highlighted the rapid response to the U.S.-China trade war last week as a typical example of the new reality.
"The $19.5 billion cryptocurrency liquidation on October 10 and the $2.5 trillion stock market crash highlight a key point. The market in 2025 has evolved into one of the most reactive forms in history," it wrote on X.
Related: U.S. Senate passes GAIN Act, prioritizing domestic AI and HPC chip sales
Original article: “$120,000 or the end of the bull market? Five key points for Bitcoin (BTC) this week”
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