Bitcoin Liquidity State Machine | Oct 10: S1 Amid Outflows

As of Oct 10, 2026 in Asia/Shanghai, Bitcoin remains in S1 TRANSITION (roughly 80% research confidence): Q is supportive, P is tightening, g is under pressure, and F shows early stabilization after liquidations. The expected effect of easier dollar quantity was to absorb selling, but persistent ETF withdrawals and only a tentative rebound mean S2 confirmation is lacking. There is no clean, independent repeated residual once weakening g is considered.

Week-average bank reserves through Oct 7 were $3.029659 trillion, up $81.569 billion week over week. Week-average TGA through Oct 7 was $0.880253 trillion, down $68.421 billion week over week. Both are weekly averages ending Oct 7; Treasury cash release is not quantitative easing.

On Oct 9 the US two-year Treasury yield was 4.80%. On Oct 9 the US ten-year nominal Treasury yield was 5.24%. On Oct 9 the US thirty-year Treasury yield was 5.60%. On Oct 9 the US ten-year real yield was 2.91%. On Oct 9 the DXY US dollar index was approximately 102.23 points. Real yields and the dollar rose marginally on Oct 9. Latest verifiable Oct 8 SOFR was 3.87%, with no clear sign of acute overnight dollar shortages.

The full US spot BTC ETF tally for Oct 7 was a $484.9 million net outflow. On Oct 8 US spot BTC ETFs had net outflows of $244.1 million (complete tally). On Oct 9 reported US spot BTC ETF net outflows were $3.6 million; IBIT and others were missing, so this is preliminary. At the Oct 10 snapshot, total stablecoin supply was about $306.496 billion, with a seven-day change near +0.01%. Stablecoin issuance is nearly flat and should not be equated with direct BTC spot demand.

CoinGlass showed BTC near $82,537, about +1.05% over 24 hours, open interest near $51.81 billion and BTC futures liquidations near $59.87 million over 24 hours in the Oct 10 snapshot. Liquidation pressure appears to have eased since the previous two-day shock, but comparable positioning and directional spot flows remain insufficient to prove a durable end to deleveraging. Feedback gain is tentatively stable, not healthy-positive.

Policy reaction pressure remains APPROACHING because long sovereign yields and real rates are high amid energy-linked inflation constraints, not because an emergency repo intervention has begun. Disconfirmation requires either sustained ETF inflows plus healthy low-leverage relative strength (potential S2); resumed Q draining alongside tighter P and weak g (potential S0); or renewed price shock with sustained OI contraction, forced liquidations and simultaneous funding outflows (potential S3).