Crypto Bulls Experience Heavy Losses Amid October’s Second Largest Liquidation Day

• Crypto bulls suffered significant losses on October 23, with $261 million in liquidations which was largely driven by Bitcoin’s price drop and heavy long positions in ETH.
• Despite the market’s volatility, institutional interest in Bitcoin remains strong as Bitcoin ETFs saw a net inflow of $198.5 million.

Crypto bulls who were betting on a continued market rally experienced a setback after undergoing significant losses on October 23. This came after the crypto markets experienced the second-largest liquidation day of the month.

The collapse of Bitcoin, the crypto king, sent shockwaves through the market, causing other tokens to follow suit. Notably, this decline summed up $261 million worth of liquidations. 

According to data from Coinglass , a substantial $203.5 million of the total liquidations stemmed from long positions. This figure marks the second-largest liquidation event, trailing only the $450.8 million loss incurred in long bets on October 1, when Bitcoin experienced a sharp decline of approximately 5%.

The market sell-off hit Ether particularly hard, with long positions totaling more than $77 million liquidated over the last 24 hours, marking the largest ETH liquidation day in October. Bitcoin call options also faced significant losses, with approximately $58.3 million worth of liquidations.

It is worth mentioning that these liquidations came after Bitcoin hit a three-month high trailing close to the $70,000 mark. This impressive price surge left Bitcoin enthusiasts thinking that the rally would continue but the bullish sentiment was short-lived.

Shockingly, Bitcoin struggling to keep its head afloat, dropped to a low of $65,000 before rebounding.

At the time of writing, BTC is swapping hands with $67,401.12 marking a 1.48% and 0.44% surge in the past 24 hours and past week respectively. Additionally, stopping at 1.33 Trillion, Bitcoin’s market cap has undergone a 1.43% surge. 

On the other side, ETH is also underperforming.  According to the daily and weekly charts, ETH is swapping hands with $2,526.58 marking a 1.80% and 3.13% decline. Also, its market cap has recorded a 1.80% decline stopping at 304.13B.

Playing as a catalyst to the poor performance, Onchain data shows that high transaction fees on the Ethereum network are discouraging activity, which in turn may be reducing demand for ETH staking. This disincentive is likely contributing to declining investor confidence, leading to reduced interest in long bets on Ether.

While retail traders were feeling the pain, institutional investors appeared largely unfazed. Bitcoin exchange-traded funds in the United States continued to attract interest, with a net inflow of $198.5 million. 

This was driven by a significant $323.6 million inflow into BlackRock’s iShares Bitcoin Trust ETF, though it was tempered by outflows of $99 million and $25.2 million from ARK 21Shares Bitcoin ETF and Bitwise Bitcoin ETF, respectively.

Despite the market’s volatility, institutional interest in Bitcoin remains strong. Between October 11 and October 21, U.S. Bitcoin ETFs saw seven consecutive trading days of inflows, adding nearly $2.7 billion to these funds.