A violent liquidity vacuum hit Bitcoin on October 10—yet the market’s core plumbing didn’t break. According to Galaxy Digital CEO Mike Novogratz, the wipeout was a painful but healthy deleveraging: leverage cleared, weaker hands flushed, and now order books are quietly rebuilding. With price stabilizing above $107,500 and a bounce toward the $111,260 zone, traders face a pivotal question: is this a fragile pause, or the base for a new leg higher as liquidity and confidence return?

What just happened?

Bitcoin slid to roughly $107,500 during the October 10 shock as market makers stepped aside and order-book depth thinned. Since then, BTC has recovered about 7.5%, consolidating while larger participants re-enter and depth improves. Novogratz argues the market’s structure remains intact—suggesting the selloff reset risk rather than broke the system.

Why it matters for traders

Thin books amplify slippage, widen spreads, and increase the risk of stop-driven wicks. Post-deleveraging phases often see a shift from leverage-led to spot-led flows, shallower liquidity pockets, and more selective momentum. Add in potential regulatory clarity from upcoming U.S. market-structure legislation, and asymmetric upside can reappear once depth normalizes.

Key levels and market tells

Watch $107,500 as near-term support and reactions around $111,000–$112,000. Confirmation comes from: - Rising order-book depth at 1% and 2% bands - Stabilizing basis (perp funding and futures spreads) without overstretched longs - Sustainable open interest growth alongside improving spot volumes - Narrowing spreads during U.S./EU sessions (sign of maker return)

Actionable plan (next 1–3 weeks)

• Trade with limit orders to control slippage; avoid chasing during thin Asia/late-weekend hours.
• Look for higher lows above $107,500 and a clean reclaim of local supply ($111k–$112k) before sizing up.
• Track depth, funding, and OI together—bullish if depth and spot lead, not just perp leverage.
• Keep positions smaller until depth normalizes; widen stops to account for wick risk.
• Consider options (call spreads) for defined-risk exposure to rebound scenarios.
• Stay headline-aware: any concrete legislative progress or institutional collateral use can accelerate flows.

Risks to manage

Another liquidity shock (macro or regulatory), weekend gaps, and leverage re-accumulation flipping funding positive too fast. If depth stalls and price loses $107,500 on volume, expect a deeper hunt for bids before trend resumes.

Bottom line

The structure looks resilient, but patience and execution discipline win in rebuilding phases. Let liquidity lead, confirm strength above support, and scale only as market makers return.

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