Bitcoin’s trading activity has spiked, reaching a weekly volume of $3.68 billion, marking the highest level since March, even as its price falls to below $106,000.

Liquidity Returns as BTC Drops to $105K

Data from analyst Arab Chain revealed that Bitcoin’s 7-day moving average of trading volume has surged to approximately $3.68 billion based on figures from Binance, showing the strongest volume in seven months. Despite this increased liquidity, BTC’s value has decreased to around $104,900 at the writing of this article. This trend hints at the return of larger traders to the market, suggesting a possible reaccumulation phase, where institutional players reposition after recent price drops.

On October 10, Bitcoin experienced a sharp decline of over $17,000, nosediving from $122,000 to around $105,000 amidst tensions related to new tariffs between the U.S. and China. Reports indicated as much as $19 billion in leveraged positions were lost during this crash, while Carmelo Alemán later revised the losses to approximately $2.31 billion.

BTC managed to bounce back to around $116,000, although subsequent dips led it back down just below $105,000, resulting in numerous liquidations worth approximately $1.1 billion.

Market Analysis and Outlook

According to analysis from CryptoQuant, some market vulnerabilities can be traced back to Binance-led sell-offs and a negative funding rate lasting four days. Nevertheless, strong buying activity from U.S. traders, reflected in a positive Coinbase Premium, is countering futures-selling pressures.

Despite minor setbacks, Bitcoin’s underlying market structure remains bullish. Axel Adler Jr. indicated that a critical support level lies between $106,000 and $107,000, which, if sustained, could maintain the broader bullish trend. Jose’s analysis shows Bitcoin dropped 4% in the last 24 hours and 12% this week, yet it retains a 58% annual gain.

Historically, October is favorable for BTC, often witnessing strong recoveries as part of the seasonal trend known as ‘Uptober’. Data suggests that reserve levels on exchanges typically fall this month as traders shift coins into long-term storage, which restricts supply and potentially aids in price rebounds.