Signals Before Bitcoin’s October 10 Liquidation Cascade

On October 10, 2025, more than $19 billion in leveraged positions were wiped out, nearly $17 billion of them long. The collapse followed weeks of structural stress: a rapid price extension from roughly $109,000 to tests of $126,000, open interest climbing from about $38 billion to over $47 billion, and exchange inflows sliding from roughly 68,000 BTC to near 26,000 BTC.

On-chain and derivatives metrics showed early warning signs. Spent Output Profit Ratio rose from about 1.00 to 1.04 with repeated spikes, while short-term holder NUPL flipped from roughly -0.17 to +0.09 in days. Momentum also weakened: a bearish RSI divergence built from mid-July into October, and funding rates stayed positive as traders defended positions by adding margin—amplifying systemic fragility.

Earlier in the year, a sharp short squeeze on April 23, 2025, triggered more than $600 million in short liquidations. That move followed a bullish RSI divergence amid falling exchange outflows (from near 348,000 BTC to about 285,000 BTC), then a local low on April 8.

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