Bitcoin spot trading volume reached its highest level in October, with over $300 billion in total, making it the second-highest monthly volume of the year, according to data from CryptoQuant. This surge was largely driven by traders moving away from leveraged positions following a historic liquidation event on October 10, where more than $19 billion in derivatives positions were wiped out in the single biggest crypto market wipeout.
The liquidation was triggered by geopolitical tensions after U.S. President Donald Trump threatened new tariffs on China, causing Bitcoin's price to plummet from $122,000 to as low as $101,000 on some exchanges. This event forced over 1.6 million traders to sell, with long traders losing nearly $17 billion, and one trader reportedly losing $19 million on Hyperliquid. In response, spot trading dominance increased, with Binance leading at $174 billion in BTC spot trades, highlighting the exchange's market share.
Analysts, including Darkfost from CryptoQuant, noted that this shift indicates a cooling off of speculation and a focus on long-term accumulation. "A market driven more by spot trading rather than derivatives is generally healthier, more stable, as it is less vulnerable to extreme volatility driven by excessive open interest expansion," Darkfost stated. This trend suggests greater organic demand and market resilience, potentially signaling a maturing market with reduced volatility due to lower leverage exposure.
Despite the positive signs, some analysts caution that the current stability may be fragile. Santiment reported heightened retail optimism, often a precursor to declines, while Ali Martinez highlighted a TD Sequential sell warning and concerns over tight global liquidity, even after the Federal Reserve's recent 25-basis-point rate cut, which caused an additional $700 million in liquidations. As of late October, Bitcoin's price hovered around $110,800, with a tight trading range between $108,000 and $116,000, indicating potential stabilization after a turbulent month.
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