Bitcoin Struggles in October: What's Causing the Weakness?

Bitcoin (CRYPTO: BTC) is showing weakness after its run to $87,000, with futures traders and ETF withdrawals driving the selloff, even as fresh money kept flowing in.

Why Bitcoin Pulled Back

Glassnode wrote in its Oct. 12 Weekly Market Pulse that Bitcoin briefly dipped below $81,000 Thursday before a weekend rebound trimmed the loss. 

Momentum cooled sharply, with the 14-day RSI falling from 57.80 to 44.92, confirming buyers had lost control heading into the weekend.

Two signals drove the pullback:

1. Perpetual futures traders turned sharply bearish as traders opened fresh short positions rather than closing out existing longs.
2. Spot ETFs mirrored that shift on the institutional side, with weekly flows flipping from $117.95 million in inflows to $701.57 million in outflows—a 695% reversal. Glassnode links that swing to institutional investors turning more risk-averse and locking in profits.

Why Capital Is Still Flowing In

Despite the pullback, Glassnode’s capital-flow indicators moved higher, not lower:

• Monthly realized-cap growth rose to 1.23% from 1.14%, meaning coins are getting revalued at higher prices as new money enters the market
• Hot capital share climbed to 20.26% from 19.56%, above its statistical band, showing more short-term, price-sensitive money flowing in
• Short-term holder supply ratio rose to 14.52%, reflecting a growing share of coins held by newer buyers

Options traders grew more cautious at the same time, with open interest rising 3.3% to $37.38 billion while the 25-delta skew more than doubled to 4.46%, both pointing to stronger demand for downside protection.

More On Bitcoin From Benzinga Today

• Strategy Adds 250 Bitcoin: Can MSTR Break Through $160?
• Bitcoin Will Hit $1M ‘Much Quicker’ Than Anticipated, Binance Founder Predicts
• Peter Schiff ‘Surprised’ by Bitcoin’s Resilience but Expects New Lows
• Can the Midterms Trigger a Bitcoin Rally? 3 Factors Suggest Yes

Where Profitability Stands

Metric	Reading	What It Means
Supply in profit	Fell to 71.41% from 74.47%	Most Bitcoin holders are still sitting on unrealized gains, even after the pullback
Net unrealized profit/loss	Slipped to 11.12% from 13.02%	Short-term holders still sit on net gains despite thinner margins
Realized profit/loss ratio	Dropped to 0.96 from 1.46	Glassnode calls this cooling profit-taking relative to losses, though a reading below 1 technically falls into the report’s bearish range by its own glossary

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