XWIN Research: Mass Liquidations Strengthen Bitcoin Market, Set It Up for New Growth
A study by XWIN Research Japan found that large-scale liquidations in Bitcoin's history did not end bullish cycles, but rather acted as a market “cleansing” mechanism. The study suggests that such events “dump excess leverage,” which only strengthens the structure and paves the way for a new rally.
Analysts studied five key events: February 22, April 18, May 19, and September 7, 2021, as well as the most recent episode on October 10, 2025. A common pattern emerged in all examples: the collapse of leveraged positions triggers panic, followed by price stabilization and recovery.
In 2021, after a correction on February 22, the Bitcoin (BTC) price quickly returned to its previous levels. Then, on April 18, excessive growth and negative news led to a 20% drop, and on May 19, following the cryptocurrency ban in China and a reversal in Tesla stock prices, the price fell 30%. Finally, on September 7, the collapse amid the passage of the Bitcoin law in El Salvador proved short-lived: the price quickly recovered from $40,000 to $53,000.
Each of these events was accompanied by a collapse in open interest (OI) in the derivatives market, a shift in funding into negative territory, and increased fear among investors. However, it was precisely these periods that became the starting point for the next upward movement, clearing the market of speculative positions.
Experts recalled that on October 10, 2025, the largest liquidation in the history of the crypto market occurred—approximately $19 billion in positions were forcibly closed following news of tariffs between the US and China. Bitcoin's price fell more than 8% to $104,000, but within a few days, the market showed signs of recovery. This was driven by inflows into ETFs, institutional liquidity, and a decline in BTC balances on exchanges. According to analysts at XWIN Research, mass liquidations are not a sign of a collapse, but a clearing phase, after which spot demand once again becomes the market's driving force.
Source: cryptonews.net
