Mike Smith
6 hours ago
The unexpected fall that cost the digital asset market $20,000,000,000,000 nearly knocked the ground out from under the feet of the bulls, but the panic did not last long. By Tuesday morning, bitcoin quotes were already rising to $113,000, and the fear-hunger index jumped from an extreme 24 to 38 points, showing that participants are gradually returning to the game. Analysts interviewed called what happened an “emotional sweep” - the forced liquidations powerfully shook off the increased leverage and cleared space for a new wave of interest.
The technical picture also added optimism. Friday's movement pushed the price below the 50- and 200-day averages, literally repeating the scenarios of March 2020, May 2021 and August 2024. Back then, such “drawdowns through two moving averages” turned into a jumping-off point for subsequent rallies. Traders looking at longer-term charts are now noting similar reversal candles and support levels: short-term panic could form a local bottom if volatility remains moderate.
A shift in the geopolitical arena is also supporting sentiment. Washington and Beijing have toned down the rhetoric, while Polymarket has lowered the probability of 100% tariffs being imposed by November 1 to 15%. The weakening threat of a trade war has returned risk appetite to equity markets, and bitcoin is once again moving in sync with the major indices, repeating the correlation that has characterized much of 2025.
Despite the sharp pullback, the crypto market's total capitalization remains just 6% below pre-crisis levels and is already up 4.4% from Sunday's lows. The bullish sentiment is fueled by the opinions of major observers: FxPro experts call it a “classic weak-handed selloff,” while The Kobeissi Letter emphasizes that the market is far from overheating. If the outbreaks of volatility subside, there will be room for a recovery rally.
The focus now is on whether bitcoin will hold above the vacated $109,000-$110,000 levels. Closing the week above these marks will strengthen the argument of supporters of the continuation of the growth cycle, because historical calculations show that after large-scale liquidations accompanied by a decrease in leverage, the market often turns upwards faster than skeptics expected.
