The Tariff Tsunami Hits Bitcoin

So, there we were, just minding our own business, when President Trump dropped the October 10 tariff bombshell, and suddenly, the cryptocurrency world was in chaos! Bitcoin (BTC) went belly-up, nosediving to about $102,000—a price we hadn’t seen since way back in August. Whoa! Talk about a party pooper! The market took a hit, losing a staggering $800 billion in value while positions worth $19.2 billion were vaporized, making it one of the biggest liquidations ever. Yikes!

Finding Stability?

As of now, it looks like Bitcoin is trying to find its feet around the $111,000 mark, but hold your horses! New data has come to light that might make you clutch your Bitcoin tightly. That’s right, it seems our little friend may not have hit rock bottom just yet.

Rewind: A Look Back at Bitcoin’s Behavior

In a spicy post by XWIN Research Japan on CryptoQuant, they drew some eyebrow-raising comparisons to previous Bitcoin crash scenarios. You see, Bitcoin has this weird thing where it goes through psychological resets, and right now, we might just be in another one of those messy phases. But hey, don’t panic just yet!

The Bitcoin Net Unrealized Profit/Loss (NUPL) metric says it all. This nifty little tracker measures how profitably BTC holders are sitting by looking at their unrealized gains and losses. Flashback to March 2020—when BTC was down in the dumps—and NUPL dropped below zero. Flash forward to November 2022, same vibe. During those thrilling times, everyone was bummed out, holding BTC at a loss. But guess what? Those moments marked the start of epic bull runs that followed a gloomy spell!

Are We Out of the Woods Yet?

Now, here’s the kicker: in our current slump, Bitcoin’s NUPL is still hanging around the 0.5 mark. That means a good chunk of holders are still making profit! What’s going on, right? To untangle this head-scratcher, XWIN dug into Bitcoin Long Liquidations metrics. They measure how much leveraged long positions got wiped out due to the market’s nasty tantrums.

When the latest market tantrum struck, yes, the overly leveraged long positions were taken out—surprise, surprise! But it wasn’t just that; as BTC’s price dipped, the Open Interest also took a tumble, which is helping the derivatives metrics breathe a little easier.

Historical Insights: Lessons from the Past

Let’s take a quick trip down memory lane. In the crashes of 2018-2019 and 2022, the initial plummets cleared out a lot of leverage. But hold onto your wallets; the real bottoms came much later, during periods stuffed with panic and losses. Based on this juicy historical data, our current setup suggests we’re still in a pre-capitulation phase, meaning the stability we’re feeling is a bit like a flimsy house of cards.

The Investor Sentiment Saga

As it stands, investor sentiment is holding strong—like a superhero in a cape! But if fear creeps back into the market and that pesky NUPL dips closer to zero, we could be gearing up for a fresh and exciting rally. Buckle up, folks!

As of now, Bitcoin is lounging at around $111,110, showing no drastic change in the last 24 hours. The plot thickens!