Bitcoin briefly climbed above $83,000 on October 20, repeating a rally seen earlier in the week. The cryptocurrency appeared to find support above $81,000, but analysts warned that rising leverage could trigger another wave of liquidations.
Before the rally, Bitcoin traded between $81,750 and $82,000 on Monday afternoon. It then fell below $81,200 in less than two hours shortly before 8 p.m. EST on October 19. A short recovery pushed prices above $82,000 before sellers dragged them below $81,500 again.
Bitcoin began climbing around 9:45 a.m. ET on Tuesday, reaching a daily high of $83,335 more than an hour later. Its market capitalization briefly approached $1.67 trillion, bringing the price closer to its opening-month level above $83,400. By 12:45 p.m. ET, Bitcoin had settled near $82,500.
Despite the price swing, Bitcoin liquidations barely exceeded $76 million, around $9 million less than Monday’s total. However, short positions accounted for nearly 60% of Tuesday’s liquidations, or $45.7 million. Long positions contributed nearly $31 million, reversing Monday’s more balanced split.
The wider crypto market showed a similar trend. Short positions accounted for $171 million in liquidations, compared with more than $125 million in long positions.
Analysts Warn of Another Bitcoin Sell-Off
Bitfinex analysts warned that Bitcoin could face a third liquidation wave this month as traders rebuild leveraged positions despite weak spot demand. They pointed to a 4.3% increase in futures open interest between October 12 and October 15, even as Bitcoin’s price declined.
The analysts said this pattern suggests that the market remains vulnerable to another sharp drop. They identified $79,821 as a key level that could trigger further long liquidations and push prices lower.
“If open interest has not fallen with price, the fuel for a third flush remains in place,” the analysts wrote. They added that a break below $79,821 could accelerate Bitcoin’s decline toward the $77,600 to $80,400 accumulation range.
According to the analysts, traders are increasingly reacting to price movements rather than driving a sustained recovery. Short positions are growing during declines, while leveraged long positions return during rebounds. This activity does not provide the steady spot-market demand needed to support a stronger recovery.
New Bitcoin Whales Grow Despite Weak Demand
Meanwhile, new Bitcoin whale entities now account for 33% of total whale realized capitalization, up from 18% at the start of 2026. Bitfinex analysts said the increase points to an early structural recovery in the market.
However, overall net 30-day apparent demand remains slightly negative at approximately -50,000 BTC. This suggests that estimated demand has remained below available supply over the past month.
The analysts expect $81,300 to serve as the center of Bitcoin’s weekly trading range rather than a firm price floor. They also believe a further decline is more likely than a sustained recovery.
Bitcoin has also lagged the decline in AI-linked stocks. The cryptocurrency has a 0.78 correlation with the Nasdaq 100 over 20 days, according to the analysts.
They warned that another drop in technology stocks could push Bitcoin below $79,821 and into the $77,600 to $80,400 accumulation range. Such a move could happen before the Federal Open Market Committee’s October 28 decision, adding another test for the cryptocurrency’s recent price recovery.
