1.6M Traders Liquidated in Record Cascade, Analyst Calls It a 'Perfectly Executed' Trade

After historic liquidation, bulls and bears now appear to be balanced. All eyes are on Monday’s stock market open.

Bitcoin and altcoins experienced the largest-ever liquidation cascade this past week, which has now reshaped positions across retail and institutional traders alike. Over 1.6 million leveraged traders were wrecked during the event, highlighting just how crowded the long side had become.

While the extreme bearish sentiment has dissipated as Bitcoin and altcoins staged a recovery, experts caution that this does not automatically signal a return to full bullishness and that the market remains in a transitional phase where careful analysis and risk management are essential.

Bitcoin and Altcoins Reset

The liquidation event, described by market analyst Doctor Profit as a “perfectly executed trade,” wiped out nearly all leveraged positions on altcoins, as liquidation rates approached 99% in several pairs. Doctor Profit pointed to a broader distribution phase in the market since August, during which major market makers quietly sold BTC and altcoins while retail traders continued to buy into short-term bounces.

The analyst observed that such a cleansing event has historically led to either fresh accumulation or a major market reversal. Technical patterns, including what some traders have dubbed the “Blood Moon effect,” indicate the crash followed a predictable post-event cycle that occurs roughly 33 days after a significant astronomical marker. Combining both market psychology and technical trends, this phase may act as a reset, helping crypto portfolios recover and prepare for the next directional shift.

While crypto markets digest the aftermath, attention has shifted to broader macroeconomic factors. Despite the Columbus Day holiday, US equity markets will operate on Monday, but important federal infrastructure closures could restrict liquidity and make markets more prone to sharp reactions and price fluctuations.

Zooming out, tensions in the semiconductor sector are intensifying across the world. China’s ban on NVIDIA GPU purchases, impacting roughly 40% of the company’s revenue, coupled with reduced American demand and efforts to pivot to domestic chip alternatives, is indicative of a potential slowdown for one of the major drivers of technology markets.

Bulls and Bears Are Now Even

Doctor Profit recommends holding current BTC and altcoin positions while monitoring Monday’s stock market open for directional clarity. Some experts anticipate a renewed bullish phase for Bitcoin, potentially reaching new all-time highs near $130,000, if key support levels hold. Others maintain caution and believe that equities and crypto may diverge in short-term performance.

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“Now let the dust settle, we prepare for the next major move. It’s still early to call the next direction with certainty, but one thing is already clear: the max-bearish scenario is off the table. The market has reset. Bulls and bears now stand on equal ground in crypto, the imbalance is gone.”

While equities have yet to catch up, the analyst stated that the stock market opening and the Japanese Yen’s movement remain some of the crucial signals to watch.