Bitcoin rebounded to $116,000 and gold hit new all-time highs as bulls woke up to face what could be their ultimate test this week.
Bitcoin starts a key week of October with the fate of the bull market at stake — what comes next?
Bitcoin stages a solid rebound from its biggest-ever liquidation cascade, reaching a high of $116,000 so far.
Traders are divided over where the market will head from here — there are even doubts that the bull market will ever return.
A giant reset in leverage offers potential relief for bulls, but shorts remain a concern.
US inflation data continues to be delayed due to the government shutdown, with Fed Chair Powell due to speak.
The crypto “debasement trade” is in focus as gold hits new all-time highs.
“Game over” as Bitcoin, crypto rebound
Bitcoin managed to return to $116,000 to start the week as weekly close volatility came in right on cue.
That represents a 5.7% rebound versus Friday’s lows of $109,700 that followed the largest liquidity wipe-out in crypto market history, data from Cointelegraph Markets Pro and TradingView confirms.
A single tariff announcement as part of the US-China trade war was all it took to create unprecedented panic.
Even stocks and gold joined the mayhem — but by Monday, the latter had already seen new all-time highs of $4,078 per ounce.
“If you include the after hours drop in futures, the S&P 500 is up +120 points at the open,” trading resource The Kobeissi Letter noted in ongoing coverage on X.
“This has effectively erased 50% of the decline seen late-last week. Now, we await more guidance from the Trump Admin.”
Crypto, in turn, added more than half a billion dollars to its market cap after Friday’s lows. Given that some short traders had timed the market a little too well, co-founder Adam Kobeissi described the comeback as “game over.”
“This was one of the largest and fastest wealth transfers in crypto history,” he said.
US President Donald Trump, whose message on Truth Social started the rout, aided the recovery in the same way.
“Don’t worry about China, it will all be fine!” he wrote on Sunday.
As a result of the past days’ events, one BTC price chart stands out: volatility. As noted by crypto quant analyst Frank A. Fetter, whose X account is named after a famous economist, implied volatility is now at its highest levels since April — the height of the tariffs debacle.
“BTC implied volatility just spiked: the market is now pricing in larger potential moves ahead. Finally,” he told X followers.
Fetter appeared to refer to the lackluster nature of what should be the climax year of Bitcoin’s latest bull market. As Cointelegraph reported, concerns are mounting that BTC/USD may not repeat history with a blow-off top in Q4.
Bitcoin bull market hinges on key trendline
Traders face a dilemma this week: is the worst over, or just the start of a major BTC price correction?
For trader Roman, who has long been suspicious of the bull market’s strength, the choice is clearly the latter.
“Last week’s flash crash perfectly bounced off our diagonal uptrend support from August 2024 at 40k,” he wrote alongside a chart on X.
“I’m looking for at least a retest of 108 but as many of you know, HTF has bearish indications. Will check 1D when we get an intra support retest at 107-108.”
Roman added that a break below the diagonal trend line “would ‘officially’ confirm a new macro downtrend and likely confirm the bear market.”
More hopeful market takes came from trader Skew, who observed that “large players” were entering as the BTC price retook $115,000.
$BTC
Looks like $115K was a key trigger for some large players too (likely a firm) pic.twitter.com/ta9w5iafia
— Skew Δ (@52kskew) October 12, 2025
“Looks pretty alright as long as price doesn’t close below $112K on 1D & next 1W,” he said about the daily and weekly charts, putting the bulls’ key challenge at $120,000.
Others used exchange order-book liquidity to identify key price levels going forward.
“Respect the liquidation hot spots,” trader SuperBro told X followers on the day.
“Tradfi may need a chance to retest the lows, and there is liquidity from 108.5 to 113 with concentration near the mid 111's. The hot spot overhead is from 123-128 with concentration around the $126K ATH.”
Analyst: “Stay cautious” after crypto liquidity flush
The shock of last week’s liquidity cascade has delivered a crypto market reset of record proportions.
The latest market data from onchain analytics platform Glassnode reveals that funding rates across derivatives exchanges collapsed to bear-market lows.
“Funding rates across the crypto market have plunged to their lowest levels since the depths of the 2022 bear market,” it told X followers Sunday.
“This marks one of the most severe leverage resets in crypto history, a clear sign of how aggressively speculative excess has been flushed from the system.”
Open interest (OI) tells a similar story. Between Friday and Sunday, over $20 billion in assets disappeared from exchanges, according to data from CoinGlass, before rebounding from $69 billion to $74 billion.
“We saw the largest open interest wipe-out in history. For BTC alone, over $10B in open interest was erased across all major exchanges,” Glassnode co-founder Rafael Schultze-Kraft confirmed on X.
Schultze-Kraft said that liquidations were “almost certainly larger” thanks to incomplete reporting by market sources.
“Our BTC Long/Short Bias chart, tracking the aggregate net positions of the largest BTC traders on Hyperliquid, showed a steep rise in net shorts starting in Oct 6th, well before Friday's events,” he added.
“While levels have since recovered, they remain deeply negative. Stay cautious.”
Missing data puts focus on Fed’s Powell
Two key US inflation gauges may have to wait this week thanks to the ongoing government shutdown.
The September print of the and Producer Price Index (PPI), along with initial jobless claims, was originally due for release on Oct. 16.
The shutdown refocuses attention elsewhere, notably on senior Federal Reserve officials with public speaking dates in the coming days. These include Chair Jerome Powell, who will deliver a speech on “Economic Outlook and Monetary Policy” at the National Association for Business Economics (NABE) Annual Meeting in Philadelphia.
Markets will be eyeing Powell’s language for confirmation of future interest-rate cuts — something risk-asset traders want to see as a liquidity tailwind.
Expectations remain almost unanimous that the Fed will cut rates by 0.25% at its Oct. 29 meeting, per data from CME Group’s FedWatch Tool.
Commenting, trading resource Mosaic Asset Company noted “deep divisions” among officials regarding the timing and extent of future cuts.
“The minutes of the most recent rate-setting meeting shows that the Federal Reserve is staying on the easing path for now,” it wrote in the latest edition of its regular newsletter, “The Market Mosaic.”
“Comments from the Fed shows there’s deep divisions at the central bank, and whether the full employment or price stability mandate carries greater importance.”
As Cointelegraph reported, labor-market weakness is a particular priority for the Fed.
All aboard the “debasement trade” train
Amid the short-term chaos, crypto and risk assets may be at the beginning of a much larger uptrend, thanks to shifting attitudes toward the US dollar and fiat currencies.
Related: ‘Debasement trade’ will pump Bitcoin, Ethereum DATs will win: Hodler’s Digest, Oct. 5 – 11
Bitcoin’s latest bull market has accompanied the rise of the so-called “debasement trade” — a giant hedge against currency devaluation worldwide.
“Bitcoin started moving out to record highs in 2024, which has taken Bitcoin as high as $125,000,” Mosaic Asset Company wrote.
“Similar to gold leading new highs in precious metals, Bitcoin is leading the way among cryptocurrencies.”
With gold at new all-time highs as of Monday, Mosaic turned to what could become a fresh challenge to risk-asset bulls in the coming months: inflation.
“Precious metals and popular cryptocurrencies have seen a boost over currency debasement concerns following an increasing global money supply and surging government debt levels. Another symptom of currency debasement could be an inflationary wave in the months ahead,” it continued.
Mosaic referenced the “prices paid” component in the Fed’s recent business surveys, which it says is often a leading indicator for inflation trends.
“While the increase in prices paid indicators aligns with the start of the trade war, currency debasement could be an underlying driver of inflation as well,” it added.
Markets’ overall character this year could compound any future surprises in the macroeconomic story.
The Kobeissi Letter used last week’s snap US-China trade war response as a prime example of the new reality.
“The -$19.5 billion crypto liquidation and -$2.5 trillion equity market crash on October 10th have highlighted a crucial point. Markets in 2025 have evolved to their most reactionary form in history,” it wrote on X.
“When you couple this with record levels of leverage, a FOMO-inducing market, and heavy participation by algorithmic traders, it becomes violent.”
