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The steep losses were not driven by sentiment alone. Heavy liquidations amplified the fall. Over $19 billion in leveraged positions had been wiped out earlier in the week. When prices began to drop again, more traders faced margin calls, triggering a cascade of forced sales.
This feedback loop created additional selling pressure, worsening the already fragile market environment. Each liquidation cycle fueled more declines, revealing how dependent the market remains on leveraged bets and speculative activity.
There was also increasing caution on institutional flows. US-listed spot Bitcoin exchange-traded funds registered outflows of $536 million on October 16. Another withdrawal of $56.9 million was made by Ethereum ETFs, which suggests risk aversion by the large investors.
After such dramatic changes, analysts and traders now await confirmation that the situation is stabilizing. Others believe that the market may undergo a period of consolidation, where volatility remains high but the direction is unclear. In the case of Bitcoin, the price field between $104,000 and $108,000 has become a significant area of support.
The only factor that will determine whether the $150 billion wipeout is a one-time shock or the beginning of a long-term downturn is the rate at which investor confidence is regained.
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