Panic struck the Bitcoin market last week as a sharp sell-off pushed BTC’s price from $121.5K to just above $102K in a matter of hours. This dramatic drop triggered a spike in the number of wallets sending Bitcoin to exchanges — a classic indicator of traders looking to exit positions amid fear. On October 14th alone, a staggering 64,000 unique addresses transferred their BTC to Binance, marking the highest exchange inflow level since July, when Bitcoin briefly surged past $120K.
However, the tide appears to be shifting. Over the following days, the number of active deposit addresses steadily declined. By October 18th, only 30,850 addresses were seen transferring BTC to exchanges — less than half of the peak seen just a few days prior. This drop suggests that the immediate panic may be abating, and with it, the intense selling pressure.
This shift in exchange activity signals a potential stabilization in the market. Reduced inflows typically mean fewer investors are looking to liquidate their holdings, potentially indicating that BTC is settling into a new price range. Still, the broader market sentiment remains cautious, and a bullish recovery is far from guaranteed.
From a technical standpoint, Bitcoin’s price activity has formed a zone of compression between $106.2K and $108K. According to recent liquidation data, these levels have become heavily populated with stop-losses and leveraged positions. If BTC can decisively break above $108K, it could trigger a cascade of short liquidations, pushing the price toward higher liquidity concentrations at $114K and $116.5K.
These upper levels represent potential targets if momentum builds, but traders are urged to approach any breakout with caution. History shows that premature bets on a bullish reversal often lead to losses, especially when the broader trend remains unclear.
Adding another dimension to the outlook is macroeconomic data from China. A recent increase in the country’s M2 money supply — a measure of the total money in circulation — has historically correlated with Bitcoin’s upward movements. If this pattern holds, it could provide a tailwind for BTC, potentially aiding a recovery toward the $117K mark.
Yet, not all signs point toward optimism. Spot Bitcoin ETF flows turned negative at the end of last week, reflecting bearish sentiment among institutional investors. If ETF inflows begin to trend positively again, it could serve as a signal that market confidence is returning, possibly paving the way for a stronger rebound.
In the meantime, most analysts agree that Bitcoin is in a transitional phase — neither fully bearish nor convincingly bullish. The recent cooling in volatility and withdrawal of panic-selling could mark the beginning of a consolidation period, during which the market seeks direction.
Long-term bulls may view this as an accumulation opportunity, especially if on-chain metrics such as exchange reserves continue to decline and holding behavior increases. Conversely, those expecting further downside warn that macroeconomic uncertainties — including interest rate decisions and regulatory developments — could still weigh heavily on crypto assets.
For traders, the key lies in watching the $108K resistance level. A confirmed breakout above this zone, ideally with strong volume support, could ignite a rally toward the $117K target. However, failure to hold this level might signal a deeper retracement or continued sideways movement.
Additionally, it’s important to consider the role of leverage in current market conditions. High leverage ratios tend to amplify both gains and losses, often resulting in sharp liquidations during volatile periods. This makes the market more vulnerable to sudden moves, particularly around key price thresholds.
Another factor worth tracking is miner behavior. During periods of high selling pressure, miners sometimes offload their holdings to cover operational expenses. A reduction in miner outflows could be another indication that the market is regaining balance.
Moreover, demand from long-term holders continues to be a stabilizing force. If wallets holding BTC for more than six months increase their accumulation, it may signal growing confidence in Bitcoin’s long-term value, despite short-term turbulence.
In conclusion, while the recent decline in Bitcoin inflows to exchanges suggests that panic may be fading, the market remains at a crossroads. A breakout above $108K could open the path to $117K, but without strong confirmation signals, traders and investors should stay cautious. The next few days will be critical in determining whether Bitcoin is merely pausing before another plunge — or preparing for a meaningful recovery.