On-chain data shows short-term traders driving panic selling, while long-term holders and whales quietly accumulate Bitcoin during market turbulence.
Federal Reserve Chairman Jerome Powell’s speech during the mid-week FOMC meeting sent bearish signals to the crypto market that caused about $300 million in liquidations and dragged Bitcoin down below $108,000. According to Binance founder Changpeng Zhao – CZ, more “dips are coming along the way.”
Powell’s speech during the conclusion of the Wednesday Federal Open Market Committee (FOMC) meeting rattled global markets, including digital assets. The US central bank announced a 0.25 percentage point reduction to its key lending rate to between 3.75% and 4%, the lowest level in three years.
Two members of the Fed’s committee dissented, with Kansas City Fed President Jeffrey Schmid voting to hold rates steady and Stephen Miran, currently on leave from the White House Council of Economic Advisers, pushing for a deeper 0.5% point cut.
The decision followed last month’s rate cut and was expected to fuel optimism in risk assets like Bitcoin, but it led to a hemorrhage that saw investors lose $377 million through liquidations within 24 hours, as Cryptopolitan reported.
Bitcoin falls below $107,000, is the market buying the dip?
The largest coin by market cap Bitcoin led the market selloff, plunging under $107,000 on Thursday in one of its steepest weekly slumps in months. The crypto hit a low of $106,993 before slightly recovering above $107,300 and moving slowly above $109,000 early Friday morning.
According to market enthusiast Immortal Crypto, 2025’s October is Bitcoin’s worst-performing “Uptober” in the last 7 years, with prices dropping 6.8% overall. Ethereum also declined, slipping 1.7% to around $3,850. The broader crypto market capitalization fell 0.46% to roughly $3.69 trillion, according to CoinMarketCap data.
On-chain data from Binance revealed that the bulk of Bitcoin’s Thursday’s selloff came from short-term holders, not long-term investors. Over 10,000 BTC flowed into Binance wallets during the volatility spike, a signal of incoming sell orders that could prolong a bearish phase.
According to CryptoQuant analyst CryptoOnChain, almost all of that Bitcoin, precisely 10,009 BTC, came from coins held for less than 24 hours. “This is the signature of hot money,” the analyst said, referring to fast-moving speculative capital that reacted instantly to the Fed’s speech.
Long-term holders, which he referred to as “diamond hands,” showed little activity when short-term traders were selling to stop the bleeding. Coins aged over six months were reportedly largely unmoved, and the data points to a “shakeout of weak hands” rather than the start of a structural downturn.
“So, is winter coming? The on-chain evidence from Binance overwhelmingly suggests no. This was a textbook shakeout of weak hands, not a loss of conviction from long-term players. The underlying structure remains strong,” CryptoOnChain surmised.
Trump’s tariff threats maul Uptober trend
October has been a painful month for the broader crypto market with a much larger market crash that took place on October 10. Bitcoin lost more than $19 billion in open positions during what analytics firm CoinGlass coined as the largest liquidation event on record.
That crash coincided with US President Donald Trump’s announcement threatening a 100% tariff on Chinese goods, causing Bitcoin’s market capitalization to drop by more than $200 million, with prices falling nearly 10%.
According to CryptoQuant, citing data from Binance, retail traders sold another 9,200 BTC on Wednesday, equivalent to about $1 billion at the time. Short-term traders using leverage are seemingly rushing to exit during downturns while long-term investors quietly accumulate.
Binance’s Retail Traders Daily Buy/Sell chart has shown repeated spikes in selling activity throughout October, each corresponding with intraday drops in Bitcoin’s price.
According to Arab Chain, the rise in the scarcity index could mean whales and long-term holders are withdrawing Bitcoin from Binance to private wallets. This effectively reduces the amount of BTC available for sale, which could limit future downside pressure and take the market sentiment to neutral levels.
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