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Bitcoin’s four-day drop to $104,000 triggered what analysts call a “defensive rotation” among crypto investors, but onchain data suggests the correction was a healthy reset rather than the start of a broader market crash.
Bitcoin (<a href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow">BTC</a>) experienced a four-day crash last week, falling from $115,000 on Oct. 14 to a four-month low of $104,000 by Friday,&nbsp;a level last seen in June, <a href="https://www.tradingview.com/chart/JBpUV8Q8/?symbol=BITSTAMP%3ABTCUSD" rel="noopener noreferrer nofollow" target="_blank">TradingView </a>data shows.
Despite the decline, analysts said the correction <a href="https://cointelegraph.com/explained/leveraged-etfs-explained-how-do-they-work" rel="noopener noreferrer nofollow" target="_self">flushed out excess leverage</a>, prompting investors to shift from chasing gains to protecting capital. In a <a href="https://insights.glassnode.com/btc-market-pulse-week-43/" rel="noopener noreferrer nofollow" target="_blank">report</a> Tuesday, blockchain analytics firm Glassnode said short-term Bitcoin holder supply has risen, signaling that “speculative capital” is taking a larger share of the market.
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 <img src="https://s3.cointelegraph.com/uploads/2025-10/019a0687-0daf-7462-a0ff-88f106704de4" title="" alt="Bitcoin crash to $104K was ‘flush,’ not crypto cycle ‘failure’">
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 BTC/USD, 1-day chart, Source: Cointelegraph/TradingView&nbsp;
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“Onchain, the short-term holder supply share continues to rise, suggesting that speculative capital is becoming more dominant,” Glassnode said, adding:
<blockquote>
 “This combination of signals points to a market shifting into protection mode, with traders prioritizing capital preservation over directional bets.”
</blockquote>
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2025-10/019a0687-1055-7ba9-9e3f-a4f01a71da82" title="" alt="Bitcoin crash to $104K was ‘flush,’ not crypto cycle ‘failure’">
 <figcaption style="text-align: center;">
 Bitcoin weekly options metrics changes. Source: Glasnode
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Meanwhile, Bitcoin’s open interest fell by about 30%, signaling that the crypto market is “far less vulnerable to another liquidation cascade,” said Glassnode in a Tuesday X <a href="https://x.com/glassnode/status/1980569106509082727" rel="noopener noreferrer nofollow" target="_blank">post</a>.
Related: <a href="https://cointelegraph.com/news/elon-musk-bitcoin-fiat-ai-arms-race" rel="noopener noreferrer nofollow">Elon Musk touts Bitcoin as energy-based and inflation-proof, unlike ‘fake fiat’</a>
<h2 id="bitcoin-s-rise-to-0-2-million-spells-hard-time-for-paper-hand-investors-samson-mow">Bitcoin’s rise to $0.2 million spells “hard time” for “paper hand” investors: Samson Mow</h2>
Glassnode’s report comes amid a period of growing uncertainty related to the continuation of the cryptocurrency market cycle.&nbsp;
“This $0.1M to $0.2M range is a hard time for those with weak conviction to HODL Bitcoin,” the Jan3 CEO, Samson Mow, wrote in a Monday X <a href="https://x.com/Excellion/status/1980360173165351403" rel="noopener noreferrer nofollow" target="_blank">post</a>, adding:
<blockquote>
 “They’re uncertain because the “cycle” didn’t happen like before, and also because other assets like gold are rallying.”
</blockquote>
Mow predicted that Bitcoin “will add a zero soon enough,” but warned that “paper hands” investors with weak conviction should not get shaken out by the temporary correction.
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 <img src="https://s3.cointelegraph.com/uploads/2025-10/019a0687-121b-75b9-b647-d2302069f568" title="" alt="Bitcoin crash to $104K was ‘flush,’ not crypto cycle ‘failure’">
 <figcaption style="text-align: center;">
 Source: Samson <a href="https://x.com/Excellion/status/1980360173165351403" rel="noopener noreferrer nofollow" target="https://x.com/Excellion/status/1980360173165351403">Mow</a>
 </figcaption>
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Related: <a href="https://cointelegraph.com/news/defi-booming-11b-bitcoin-whale-uptober-hopes-finance-redefined" rel="noopener noreferrer nofollow">DeFi booming as $11B Bitcoin whale stirs ‘Uptober’ hopes: Finance Redefined</a>
Meanwhile, long-term Bitcoin holders continue selling to institutional investors, according to Glassnode analyst Chris Beamish.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2025-10/019a0687-144e-7354-98fd-98b96d8fbfcb" title="" alt="Bitcoin crash to $104K was ‘flush,’ not crypto cycle ‘failure’">
 <figcaption style="text-align: center;">
 Source: Chris <a href="https://x.com/ChrisBeamish_/status/1980249117310808289" rel="noopener noreferrer nofollow" target="https://x.com/ChrisBeamish_/status/1980249117310808289">Beamish</a>
 </figcaption>
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Digital asset treasuries (DATs) and exchange-traded funds (ETFs) have absorbed an “incredible amount” of the long-term holder supply, but Bitcoin’s upside will remain limited until this cohort stops selling, the analyst wrote in a Monday X <a href="https://x.com/ChrisBeamish_/status/1980249117310808289" rel="noopener noreferrer nofollow" target="_blank">post</a>.
Bitcoin ETFs have also been hit by the political turmoil surrounding President Donald Trump’s renewed tariff threats against China.
On Monday, the <a href="https://cointelegraph.com/news/spot-bitcoin-ethereum-etfs-extend-outflows-amid-us-political-turmoil" rel="noopener noreferrer nofollow">Bitcoin ETFs recorded</a> $40 million worth of net outflows, marking their fourth consecutive day of selling, Cointelegraph reported.<iframe width="100%" height="315" src="https://www.youtube.com/embed/haInlj7rTSs?start=" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen loading="lazy" sandbox="allow-scripts allow-same-origin allow-popups allow-forms"></iframe>
Magazine: <a href="https://cointelegraph.com/magazine/tezos-blockchain-arthur-breitman-calls-bitcoin-funny-internet-money/" rel="noopener noreferrer nofollow">Bitcoin is ‘funny internet money’ during a crisis: Tezos co-founder</a>

Bitcoin crash to $104K was ‘flush,’ not crypto cycle ‘failure’

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