BITCOIN – THE REAL REASON BEHIND THE FALLWhen I started trading someone told me something I’ll never forget: “If you can predict tomorrow’s newspaper headline, you understand the market.”
He didn’t mean I should chase news. He meant I should read structure so well that I know what kind of headline the market is already writing, before the mass even see it.
And now, looking around online, I see the complete opposite. Everywhere you look, there’s another “confluencer” talking about crypto with big words and zero understanding.
People selling dreams, memberships, and indicators, while they don’t even know what open interest or CVD means.
I’m not here to sell anything. I’m here to help people actually learn how to read data and see through the noise. Because what most of these so-called experts call “analysis” is just emotional guessing wrapped in confidence.
What I called and what happened
Last week I posted my “Big Dump” thesis.
I said Bitcoin would swing fail above the highs, then drop into the 104K region. That is exactly what happened.
Price ran the sweep into 126K, trapped the late buyers, and dumped straight into 104K.
People blamed tariffs. The tariff headline was the spark. The fuel was crypto’s own positioning.
Why the structure was ready to snap
Before the crash, the data told the story clearly.
Stablecoin OI went from 257K to 285K contracts (+10.9%). That is new leveraged exposure.
Coin-margined OI dropped during the breakout, then rose again near the highs. Shorts were fading strength.
Spot CVD stayed flat to slightly negative. Real buyers were missing.
The long/short ratio fell from 2.05 to 1.02 even while price kept climbing.
That’s what distribution looks like. Buyers on leverage pushing price up while stronger hands sell into them. No real spot demand, just futures exposure.
You don’t need a macro event to fall. You only need a reason for those leveraged buyers to stop bidding. Think of it like a crowded elevator. Everyone keeps piling in as it moves up, feeling safe because it hasn’t stopped yet. But the moment one person hesitates, the weight shifts. When the next person panics, the whole thing drops.
That’s what happens when a market is driven by leverage instead of conviction. You don’t need bad news, you just need hesitation.
Look back at similar events.
In May 2021, funding rates were insane, perps overloaded, and spot volume thin. Elon Musk tweeted about Bitcoin’s energy use. That tweet didn’t cause the dump. It just made leveraged longs pause. The bids disappeared and the cascade started.
In August 2023, Evergrande headlines hit. Bitcoin was sitting at resistance with flat spot CVD and rising OI. Equities wobbled, crypto longs hesitated, and the structure collapsed within hours.
In March 2020, when COVID panic hit, Bitcoin had already been stretched thin. Funding was high, leverage was heavy, and liquidity was weak. The virus didn’t break the market, leverage did.
Leverage creates confidence until it doesn’t. Price doesn’t fall because people start selling. It falls because nobody steps in to buy. Headlines decide when the drop starts. Structure decides how far it goes.
Why 104K was my first target
I didn’t pick 104K out of thin air. That level was built on confluence.
1) AVWAP from the April 7 auction
That swing low kicked off with massive volume. When a move starts with that kind of participation, the anchored VWAP becomes a key reference for institutional flow. It represents the average cost of that whole auction, and when extended forward, it acts as a dynamic area where liquidity and algorithms interact.
That blue AVWAP line from April has been running right through the 104K region.
It’s not that price revisited that auction, it’s that the anchored VWAP from that event still marks the fair value area for that entire move.When price traded back down into that region, it met that same volume-weighted anchor, creating a major confluence zone that algos and larger players watch closely.
2) The June 22 breakout left an LVN
A new auction started on June 22 and pushed higher, leaving a Low Volume Node behind.
An LVN is a thin zone on the volume profile where the market moved quickly with little trade.
Markets often revisit these thin areas later to find balance or test unfinished business.
3) HTF Fibonacci cluster
Multiple higher timeframe Fibonacci retracements and extensions overlapped near the same 104K area. When several fib levels align with structure, that’s a strong confluence zone watched by both human traders and algorithms.
The 104K region was where the AVWAP line, LVN, and fib cluster all met. That’s not a random target. It’s a structurally defined area where liquidity concentrates and where markets tend to react sharply. And that’s exactly what happened.
The spark versus the structure
The tariff headline didn’t cause the drop. It triggered it.
The structure was already unstable. Leverage was maxed. Spot demand was flat. Funding was positive and rising. When the tariff news hit, traditional markets pulled back and crypto followed instantly. It wasn’t correlation, it was liquidity contagion.
Traders managing multiple books de-risk across assets when volatility spikes. That creates a gap in liquidity. When the bids vanish, the market falls into the first real pool of resting orders — in this case, the 104K zone.
You saw the same mechanics during the March 2020 crash and the 2021 deleverage. External shocks trigger internal liquidation cascades. That’s why saying “this had nothing to do with crypto is completely wrong.
This had everything to do with crypto. It’s like blaming the thunder for breaking a window when the glass was already cracked. Or saying the iceberg sank the Titanic when the captain was already steering through a sea of warnings.
Crypto was structurally weak. Leverage was stretched, spot demand was gone, and funding was positive. When the headline hit, it didn’t cause the collapse. It just gave the market permission to do what it was already set up to do — unwind.
Crypto is built on leverage.
Perpetual futures dominate volume.
Stablecoin collateral drives exposure.
When external risk events change funding conditions or risk appetite, the crypto market reacts instantly because its structure is fragile by design.
Example:
When yields spike, the dollar strengthens and funding costs rise. Leveraged longs become more expensive to hold, so traders unwind positions.
When equities dump, cross-asset desks reduce risk globally, which pulls liquidity out of crypto perps too.
Intermarket correlation always matters. Macro sets the mood. But the speed and violence of crypto moves always come from leverage inside the system.
How you can spot it next time
Compare Spot CVD vs Stablecoin CVD. If stablecoin CVD rises while spot stays flat or negative, the rally is leverage-driven.
Track Open Interest vs Price. Both rising together usually means exposure is building. Confirm with spot flow.
Watch the Long/Short ratio. If it drops while price rises, shorts are entering and the move may be getting absorbed.
Anchor VWAPs to real pivots like swing lows, breakouts, or liquidation spikes. Those levels attract institutional flow.
Study Volume Profiles. LVNs are thin and often retested. HVNs are balance zones that attract price.
Map HTF fib clusters for confluence. Reactions are stronger when multiple timeframes agree.
Note single prints and thin brackets on TPO or volume profiles. These often act as magnets.
When these factors line up, you don’t need to predict headlines.
You’ll already most likely know which headline will break the market.
TLDR
The rally was leverage-driven: Stablecoin OI up 10.9%, Spot CVD flat, Long/Short ratio down from 2.05 to 1.02
The swing fail at 126K was the final liquidity grab
104K was the target due to AVWAP + LVN + HTF fib cluster
The tariff headline was the spark, not the cause
The crash was caused by leverage and missing spot demand
Crypto didn’t fall because of politics. It fell because the market was already begging for an excuse to reset.
The data showed it clearly weeks before the drop.
If this helped you see the market a little clearer or made you think differently about how price really moves, please leave a like and drop a reaction. It keeps me motivated to keep posting real analysis, not the copy-paste bullshit hype that floods your feed every day.
Check the Order Flow Data from 6 October here: ibb.co
