Friday, October 10, will likely be remembered as one of the most turbulent days in cryptocurrency history. Within minutes, more than $19 billion in derivative positions were liquidated, and the overall cryptocurrency market capitalization fell by over $500 billion. This dramatic event has left traders and analysts questioning what triggered the crash — and what could follow next.

Bitcoin technical analysis

BTCUSD - 1 Day Time Frame

After reaching its April low, the price of Bitcoin climbed from around $75,000 to over $126,000, marking a 70% increase. As the world’s largest cryptocurrency, this strong growth attracted large numbers of retail traders, many of whom traded with leverage through derivatives.

To limit losses, traders typically place Stop Loss orders, which often act as liquidity targets for the market. The recent rapid sell-off confirmed this pattern — once these stops were triggered, a cascade of liquidations followed, erasing billions in open positions.

Bitcoin’s price dropped below the lows from August, September, and July, eventually finding temporary support at the 50% Fibonacci retracement level within a key support zone on the four-hour timeframe, shown in blue on the accompanying chart.

Bitcoin price target

BTCUSD - 4 Hour Time Frame

This correction also created a new daily resistance zone, along with two important liquidity levels — Buy-Side and Sell-Side Liquidity. These areas now hold the key to determining Bitcoin’s next move. The central question is whether the price will first drop further to clear remaining Sell-Side Liquidity and then close above the orange resistance zone, or whether the bearish momentum could continue from current levels.

While there is no certainty in predicting market direction, the coming days are expected to be decisive. Traders could monitor how Bitcoin interacts with both the resistance and liquidity levels to assess whether a shift in momentum occurs.

Remaining adaptable and focusing on confirmation signals rather than speculation could help maintain a disciplined approach as volatility continues across the broader crypto market.