Something Broke on October 10th: The Hidden Bitcoin Liquidation That Triggered a Historic Flush Out

For Bitcoin investors, the last month has been brutal.
After hitting a fresh all-time high just weeks earlier, Bitcoin plunged more than 30%, sending shockwaves through the market and raising one question:

What exactly happened on October 10th — and why is Bitcoin behaving in a way it has never behaved before?

Because what we’re seeing now isn’t a normal correction…
It isn’t the typical bull-market shakeout…
And it isn’t driven by fundamentals.

Something broke. Someone blew up. And the ripple effect is still unwinding.

If you hold crypto — or you know someone who does — the story below affects you.

Crypto Hodlers: I Don’t Want To FRIGHTEN You But Please PREPARE YOURSELF

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The Crypto Market Is Showing Something We’ve Never Seen Before

A 30–35% correction in Bitcoin is normal, even in strong bull markets.

But here’s what’s not normal:

When Bitcoin crashes, Bitcoin dominance always goes up.
Money flows OUT of altcoins and INTO Bitcoin — the “safer” asset.

This time?
Bitcoin dominance initially spiked… then collapsed.

This tells us one thing:

✔ The selling pressure isn’t hitting the entire crypto market

✘ It’s hitting Bitcoin specifically

✔ And it’s coming from a very large entity

Someone big — a fund, market maker, institution, or trading desk — is aggressively unloading BTC.

And according to multiple analysts, the chain reaction all started on:

October 10th.

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October 10th: The Day the Market Broke

On October 10th, Bitcoin suddenly fell from ~$122K to nearly ~$106K in a matter of hours.

That single flush-out liquidated around:

$19–20 billion of leveraged positions

— More than during the FTX collapse
— More than any liquidation event in Bitcoin history

As analyst Anthony Pompliano described:

“Somebody blew up. Who is it? How much? What’s the contagion? Something broke on October 10th.”

This wasn’t organic selling.
This wasn’t panic retail behavior.
And it didn’t come from altcoins or stablecoins.

This was institutional.
Large.
Targeted.
And controlled.

Because normally, when someone blows up, the liquidation cascade is fast — violent, but over quickly.

Not this time.

This drawdown has been:

• Slow

• Relentless

• One-directional

• Without a meaningful bounce

That’s highly unusual.

Someone is intentionally exiting over time — likely through OTC desks that execute orders throughout the trading day.

This is not natural market flow.
This is forced selling.

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Why This Pullback Is Different From Every Other Crash

Here’s what makes this crash so strange:

1. It didn’t happen at the end of a cycle

FTX collapsed at the bottom of a bear market.
This blowup happened at the top — right after new all-time highs.

2. It’s lasted more than a month

Liquidations are usually fast.
This is slow-motion and steady.

3. Bitcoin dominance is falling during the crash

This implies:

• The crypto market isn’t collapsing

• The rest of crypto isn’t being liquidated

• Only Bitcoin is experiencing pressure

4. Fundamentals have not deteriorated

If anything, fundamentals have never been better:

• ETFs have record inflows

• Hashrate is near ATH

• Network usage is strong

• Institutional adoption is accelerating

So if nothing is wrong with Bitcoin, and nothing is wrong with crypto…

What is wrong?

A single large entity.

A liquidation.
A trading desk collapse.
A market maker gone sideways.

Something broke on October 10th — and the market is still unwinding it.

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Bitcoin Is Now Extremely Oversold — Only 6 Times in History Has This Happened

Despite the fear, the charts tell a very different story.

Bitcoin’s Weekly RSI (Relative Strength Index) is now:

🟥 “Extremely Oversold”

🟥 Only the 6th time ever

🟥 Historically followed by major rebounds

Past readings this low triggered:

• +200% rebounds

• Bottom formation

• Major macro reversals

We’re at ~35 RSI on the weekly — previous major bounces formed between 25–35.

Could we go lower? Yes.
Could this be bottoming behavior? Also yes.

But here’s the key:

Bitcoin has now dropped 35% without a single meaningful bounce.
That is rare.
That is unusual.
And that typically marks exhaustion.

Buyers simply haven’t stepped in yet.

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Three Scenarios: Bullish, Neutral, and Worst-Case

Now that Bitcoin has broken below the 50-week moving average, we can outline the most probable scenarios.

These are the three paths the market can take from here.

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1. The Bullish Scenario

(The “Hopium” Case — But Still Possible)

• Bitcoin has already bottomed

• Price reclaims the 50-week MA in coming weeks

• The liquidation pressure ends

• The bull market resumes

• New all-time highs come back into focus

But this scenario only becomes valid if Bitcoin can:

✔ Break back above the 50-week moving average

If we reclaim that level, the crash was just a controlled wipeout — not a trend reversal.

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2. The Neutral Scenario

(Sideways Chop / “Mini Bear”)

• Bitcoin bounces up toward the 50-week MA

• Gets rejected

• Spends 3–4 months consolidating

• Range between $100K and $60K

• Market sentiment turns bored and exhausted

This is the most “time-based” pain scenario.

People don’t capitulate from price — they capitulate from waiting.

Institutions (Saylor, ETFs, sovereigns) reduce the downside, making a long deep bear market less likely.

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3. The Worst-Case Scenario

(Full Bear Market Retest)

This is where things get severe but historically reliable.

Bitcoin could:

• Drop to the 200-week moving average

• Currently around $55,000

• Spend months accumulating

• Then grind upward toward recovery

This level marked bottoms during:

• 2020 COVID crash

• 2022 FTX collapse

• Prior macro capitulations

Breaking below it is extremely rare.

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The Most Important Bitcoin Chart Almost Nobody Is Watching

There’s one chart that might be the key to the entire market.

It’s not:

• RSI

• Dominance

• Moving averages

• Fibonacci levels

It’s the Production Cost Floor — the estimated cost to mine one Bitcoin.

Historically:

• Bitcoin rarely falls below this line

• When it does, it’s brief and explosive

• It has marked every major bottom

Today’s estimated production cost floor:
≈ $70,000 BTC

This means:

• Miners are unlikely to sell below $70K

• Miners historically create the floor

• Bitcoin is nearing its “commodity floor value”

• Market price tends to revert above this level

Even during:

• FTX

• COVID

• China mining ban
  …Bitcoin respected its production cost floor.

This is true commodity behavior — something mainstream media never acknowledges.

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So What Really Comes Next?

If the fundamentals haven’t changed…

If Bitcoin is historically oversold…

If production cost is acting as support…

And if the selling pressure all traces back to a single blown-up entity on October 10th…

Then the bull case becomes surprisingly plausible:

✔ A rebound back above the 50-week MA

✔ Capitulation ending

✔ Slow grind upward

✔ Bull market continuation

But the key is time.

This wasn’t a natural market correction.
It wasn’t sentiment-driven.
It wasn’t fundamental.

It was forced selling — and forced selling always ends.

When it does, buyers will step in.
Miners will defend the floor.
Institutions will continue accumulating.

And the long-term trend — which hasn’t changed — will resume.

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Final Thoughts

Bitcoin didn’t fall because something is wrong with Bitcoin.

Bitcoin fell because something is wrong with someone who held Bitcoin.

The fundamentals are stronger than ever:

• Hashrate ATH

• ETFs buying billions

• Sovereign adoption increasing

• On-chain metrics robust

• Liquidity expanding over the cycle

But forced liquidations don’t care about fundamentals.

They simply unwind — until they stop.

We’re closer to that end than most realize.

As new information emerges, the picture will become clear.
But for now, the charts, the data, and the fundamentals all point toward one conclusion:

This is not the end of the bull market.
This is the storm before the next leg.