Bitcoin (BTC USD) experienced a surge in long liquidations on Wednesday as its price extended its bearish momentum, following a speech by Federal Reserve Chairman Jerome Powell. The market faced downside pressure despite a confirmed rate cut, and the subsequent sell-off triggered a significant liquidation event.
According to data from Coinglass, Bitcoin long liquidations surpassed $307 million on Wednesday, marking another instance of leverage shakeout. Many traders had anticipated a bullish move, especially with a high degree of certainty regarding further Federal Reserve rate cuts. Analysts had previously predicted at least three rate cuts before the end of the year.
However, Powell's speech highlighted concerns related to the recent government shutdown, persistent inflation, and the impact of tariffs. While these observations may have dampened investor sentiment, recent market activity indicated weak demand from whales. Furthermore, an increased appetite for leveraged longs and prevailing bullish expectations contributed to the latest liquidation scenario.
Negative Bitcoin ETF Flows Contributed to Bearish Momentum
Bitcoin Exchange-Traded Funds (ETFs) played a role in the downward price movement, registering approximately $470 million in net outflows on Wednesday. This contributed to the overall bearish momentum observed in the market.
In line with this bearish trend, the Bitcoin (BTC USD) price slid by over 7% from its weekly high of $116,381 to a low of $107,948 on Thursday morning. The bearish momentum also pushed the price below BTC’s two-week ascending support line. However, the price recovered and moved back above its opening price for the day, indicating that the support structure remained intact.
The bearish Bitcoin (BTC USD) price momentum was accompanied by over $77 million in net spot flows. Analysis of large order-book data revealed that whales on major exchanges such as Binance and Coinbase were significant contributors to this bearish trend.
A subsequent wave of demand emerged shortly after Wednesday's dip, enabling the price to recover above $111,000 at the time of observation. Large order book statistics also indicated that whales were positioning themselves for a rebound. For instance, Binance whales executed $1.2 billion worth of long positions in the derivatives segment, while OKX whales held $213 million in net longs. Although Binance and Coinbase spot flows were relatively subdued, OKX whales acquired over $17 million worth of spot BTC.
What’s Next for Bitcoin (BTC USD) Price Action in November?
Many prominent industry figures maintained a bullish outlook in October, with some still anticipating significant price action in the coming months. Among them is Eric Trump, who recently noted a global shift in the regulatory landscape favoring cryptocurrencies.
Market data also indicated a continued decline in Bitcoin (BTC USD) balances on exchanges, reaching their lowest levels in the past 12 months.
These declining exchange balances suggest that the market retains long-term bullish expectations. However, October presented its share of challenges, particularly at the macroeconomic level. It was therefore not surprising that Bitcoin experienced a decline despite the Federal Reserve rate cut announcement. Powell’s post-rate-cut speech may have added to the prevailing uncertainty.
Nevertheless, the markets have been closely watching the meeting between President Trump and China's President Xi Jinping. The markets are awaiting official confirmation of the cessation of the tariff war between China and the U.S. Bitcoin (BTC USD) and other risk-on assets could potentially see a softer landing in November.
Recent reports indicated that the meeting between Trump and Xi Jinping was successful.
An improvement in public relations between China and the U.S. could serve as a foundation for enhanced macroeconomic conditions. This, in turn, may boost market sentiment and set the stage for a more stable market performance over the next four weeks.