Crypto Bull Run Not Over Despite Market Washout

The October 10 liquidation event marked a watershed moment for cryptocurrency markets, clearing more leverage in both dollar terms and percentage of open interest than the entire January-April 2025 period combined. According to Lekker Capital’s Quinn Thompson, this represented the ‘largest positioning rinse in history of crypto’ while markets stand ‘on doorstep of macro goldilocks.’ The event created what Thompson describes as a rare setup occurring only ‘1, at most 2, times per year’ where his view becomes ‘180 degree odds with the crypto twitter consensus.’

Thompson specifically pointed to bearish sentiment from prominent crypto Twitter voices including @qwqiao, @blknoiz06, and @cburniske as representative of the prevailing market consensus. However, he emphasized that his reference to these views wasn’t about ‘being wrong or right’ but rather about observing sentiment extremes. ‘Sometimes it’s better to observe more, love more and say less,’ Thompson noted, suggesting that the emotional reaction to the liquidation event had clouded market participants’ judgment.

The core of Thompson’s argument rests on a simple historical heuristic: selling ‘after’ a deep deleveraging event typically represents poor timing once forced sellers have been flushed from the market. ‘Anyone want to run the math on what percentage of -30–40% open interest crypto liquidation events was it a good idea to get bearish AFTER it happened?’ Thompson asked rhetorically. His explicit hypothesis stated that ‘getting medium time frame bearish, e.g. 40/80/120 days forward, after a large scale liquidation event is a poor risk/reward the vast majority of the time.’

This probabilistic view received immediate endorsement from market veterans Alex Krüger and Framework Ventures co-founder Vance Spencer, who each replied ‘0%’ to Thompson’s question. Their unanimous response underscored the historical pattern that major liquidation events typically mark capitulation points rather than the beginning of sustained downtrends. Thompson drew parallels to the pre-Trump victory period in 2024, suggesting the current opportunity shares similar characteristics to previous market inflection points.

Beyond pure positioning metrics, Thompson ties the current crypto setup to a favorable macroeconomic backdrop he repeatedly characterizes as ‘goldilocks.’ He referenced previous discussions about gold’s bull case on the Forward Guidance podcast with Felix Jauvin, noting that a widely circulated image showing Vladimir Putin, Xi Jinping, and Narendra Modi clasping hands at the Shanghai Cooperation Organization summit served as ‘the most obvious buy gold signal you could get after its 4–5 month consolidation.’

Thompson sees Bitcoin now occupying an analogous position after its approximately 10-month consolidation period. ‘Basically getting the same thing now… Don’t miss the forest for the trees,’ he warned, pointing to constructive regulatory developments as part of the supportive backdrop. Specifically, he highlighted Coinbase CEO Brian Armstrong’s policy push, noting Armstrong’s statement: ‘Heading to D.C. tomorrow, excited to roll up our sleeves with key decision makers to get market structure to @POTUS’s desk.’ This regulatory engagement represents what Thompson views as positive structural development for United States market plumbing.

At press time, Bitcoin traded at $109,101, reflecting market digestion of the October 10 event. Thompson’s analysis suggests that the combination of extreme positioning washout and favorable macro-regulatory conditions creates a setup reminiscent of previous major market inflection points. The simultaneous alignment of these factors—historical deleveraging precedent, goldilocks macroeconomic conditions, and constructive regulatory engagement—creates what Thompson views as a potentially powerful catalyst for forward returns.

The current environment represents what Thompson identifies as similar to prior sentiment inflection points in September 2023, September 2024, and February 2025. His consistent theme across these periods has been the danger of consensus sentiment becoming misaligned with market structure realities. For investors in both Bitcoin and Ethereum, the message is clear: historical patterns suggest that becoming medium-term bearish after major liquidation events has proven to be poor risk/reward decision-making, particularly when such events occur alongside supportive fundamental backdrops.