Bitcoin briefly moved above $83,000 on October 20, mirroring an earlier weekly rally. Market observers noted that while support held past $81,000, growing financial leverage could spark another round of forced sell-offs.
On Monday afternoon, the cryptocurrency traded between $81,750 and $82,000 before dropping under $81,200 in less than two hours right before 8 p.m. EST on October 19. A brief bounce pushed values past $82,000, though sellers soon pulled them beneath $81,500.
An upward climb began around 9:45 a.m. ET on Tuesday, hitting a peak of $83,335 over an hour later. The market value briefly neared $1.67 trillion, bringing the asset near its opening-month mark above $83,400. By 12:45 p.m. ET, Bitcoin hovered around $82,500.
Total liquidations stayed just above $76 million during the price fluctuation, coming in roughly $9 million lower than Monday. Short positions made up nearly 60% of Tuesday liquidations at $45.7 million, while long positions accounted for close to $31 million, flipping Monday's balanced distribution.
Across the broader cryptocurrency market, short positions totaled $171 million in liquidations against more than $125 million for long positions.
Analysts Warn of Another Bitcoin Sell-Off
Bitfinex experts cautioned that Bitcoin might face a third wave of liquidations this month because traders keep building leveraged positions despite sluggish spot market demand. They highlighted a 4.3% rise in futures open interest from October 12 to October 15 despite falling prices.
Such behavior indicates the market stays exposed to a steep decline, according to the analysts, who pointed to $79,821 as an important threshold that could spark more long liquidations and drive values down.
"If open interest has not fallen with price, the fuel for a third flush remains in place," the analysts wrote, adding that falling past $79,821 might speed up a drop toward the $77,600 to $80,400 accumulation band.
Traders currently chase price swings instead of fueling a lasting recovery, the analysts noted. Short positions expand during drops, and leveraged long positions reappear during rebounds, failing to supply the steady spot demand required for a robust recovery.
New Bitcoin Whales Grow Despite Weak Demand
At the same time, new Bitcoin whale entities now represent 33% of total whale realized capitalization, rising from 18% at the start of 2026. Bitfinex representatives stated this growth indicates an early structural market turnaround.
Even so, net 30-day apparent demand sits slightly negative at approximately -50,000 BTC, meaning estimated demand stayed under available supply over the past month.
Experts anticipate $81,300 will act as the midpoint for the weekly trading range instead of a solid price floor, leaning toward a continued drop over a lasting rebound.
Additionally, Bitcoin lagged behind the drop in AI-linked equities, showing a 0.78 correlation with the Nasdaq 100 over a 20-day span.
A further drop in tech stocks could push Bitcoin under $79,821 into the $77,600 to $80,400 accumulation zone before the Federal Open Market Committee meeting on October 28, presenting another hurdle for the recent price recovery.
