Bitcoin Rally Reverses on October 21, Extending Pattern of 21st Peaks

Bitcoin (BTC) bulls have seen the 21st become a challenging date. On October 21, the rally was halted, and long positions were liquidated.

Over the previous day, the biggest digital asset declined 0.28%, reaching $82,486, BeInCrypto Markets reported. According to analyst Benjamin Cowen, the same date was the peak for July and September, and the key question is whether October will do the same.

Leverage Amassed and Then Liquidated

Last week, Bitcoin dropped near $80,000 after US inflation data was reported as hot. The price then recovered, bringing derivatives traders back.

According to Santiment data from October 21, Bitcoin open interest was about $23.4 billion and increasing. Open interest is the total value of open futures positions. The company alerted that rapid leverage growth could make liquidation waves worse when price trend changes.

The following day, trader Ted Pillows stated that the breakout had not succeeded, and recent long positions were liquidated during the night. He also noted that funding rates—the fees that longs pay to shorts when demand for leverage is elevated—had fallen to almost zero.

CoinGlass data indicates that long positions experienced the greatest losses recently. In the previous four hours, they represented $91.19 million of the $95.22 million in total crypto liquidations. This occurred while Bitcoin fell below $83,000.

The biggest individual liquidation in a 24-hour period was a Bitcoin long position worth $11.78 million on Binance, settled at a price of $83,526. But across the entire 24 hours, shorts accounted for 53.1% of the total $355.73 million in liquidations.

The 21st Pattern Returns

The flush came after a rally that hit its high point on the 21st, the date at the core of a pattern identified by analyst Cowen. Cowen has noted Bitcoin's price on the 21st of every month from July onward.

The 21st was the local high in July and September. August was different, with Bitcoin rising only a little after that date and reaching its top on September 3.

Cowen also outlined other turning points if the pattern persists, but he cautioned that it might not hold.

“Either way, if the pattern continues the next low would be around mid-November (big if of course) and the next local high is between October 21st (today) and November 3rd (midterms),” he said.

Price Thresholds Traders Are Monitoring

Whether October mirrors the pattern will depend on Bitcoin's price leading up to November 3. For the immediate term, Pillows identified $82,600 as the level that must hold for a rebound. Currently, Bitcoin is below that level.

Should the price stay, Pillows said his next focus would be $81,900, and a return to $83,700 would restore bulls' control.

Looking ahead, Glassnode locates the next resistance zone between $85,000 and $87,500, an area where sell orders and liquidation groups are gathered.

Further down, Glassnode points to $80,000. If Bitcoin closes below that in a day, the typical US spot Bitcoin ETF and treasury holder would be at a loss. The True Market Mean, which is the average purchase price of active participants, is around $77,600.

If Bitcoin can push past the resistance zones before November 3, it will reveal whether October deviates from or replicates Cowen's pattern.