1.6 million traders liquidated in record cascade, analyst calls it a ‘perfectly executed’ trade

After a historic liquidation, the bulls and bears now appear to be in balance. All eyes are on Monday’s stock market open.

Bitcoin and altcoins have experienced the largest liquidation cascade ever in the past week, which has now reshaped the positions of both retail and institutional traders. More than 1.6 million leveraged traders went bankrupt during the event, highlighting how busy the long side had become.

Although the extreme bearish sentiment has dissipated as Bitcoin and altcoins have recovered, experts warn that this does not automatically mean a return to full bullishness and that the market remains in a transition phase where careful analysis and risk management are essential.

Bitcoin and Altcoins reset

The liquidation event, described by market analyst Doctor Profit as a “perfectly executed trade,” wiped out almost all leveraged positions on altcoins as liquidation rates in several pairs approached 99%. Doctor profit be to a broader distribution phase in the market since August, during which major market makers quietly sold BTC and altcoins while retail traders continued to buy in short-term upswings.

The analyst noted that such a purge event has historically led to new accumulation or a major market reversal. Technical patterns, including what some traders call the “Blood Moon Effect,” indicate that the crash followed a predictable post-event cycle that occurs about 33 days after a major astronomical milestone. Combining both market psychology and technical trends, this phase can act as a reset, allowing crypto portfolios to recover and prepare for the next change in direction.

As crypto markets deal with the aftermath, attention has shifted to broader macroeconomic factors. Despite Columbus Day, U.S. stock markets will be active again on Monday, but major federal infrastructure shutdowns could limit liquidity and make markets more susceptible to sharp reactions and price swings.

Zooming out, tensions are increasing in the semiconductor sector around the world. China’s ban on NVIDIA GPU purchases, which affects about 40% of the company’s revenue, coupled with reduced U.S. demand and efforts to shift to domestic chip alternatives, is indicative of a potential slowdown for one of the key drivers of the technology markets.

Bulls and bears are now even

Doctor Profit recommends holding current BTC and altcoin positions while keeping an eye on Monday’s stock market for price clarity. Some experts expect a new bullish phase for Bitcoin, which may reach new all-time highs near $130,000 if key support levels hold. Others remain cautious and believe that stocks and crypto could diverge in the short term.

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“Now let the dust settle, we are preparing for the next big move. It is still early to take the next direction with certainty, but one thing is already clear: the max-bearish scenario is off the table. The market has reset. Bulls and bears are now on equal footing in crypto, the imbalance has disappeared.”

While stocks still have some catching up to do, the analyst said the opening of the stock market and the movement of the Japanese yen remain some of the crucial signals to watch.