Bitcoin Shows Resilience After Volatile Week
Bitcoin has managed to recover above $112,000 after experiencing significant market turbulence throughout the past week. The cryptocurrency reached a 24-hour high of $112,293 during early Monday trading, marking its first return to this level since Thursday’s sharp decline. Currently, Bitcoin is trading around $111,835 according to CoinGecko data.
This recovery comes after a challenging period where Bitcoin struggled to maintain momentum. Analysts had noted signs of investor exhaustion, with the sudden price drop last week triggering two major liquidation events across the broader cryptocurrency market.
On-Chain Data Suggests Bull Market Intact
Despite recent market jitters, crypto investment firm XWIN Research Japan maintains that Bitcoin’s bull market remains intact. In a recent CryptoQuant analysis, the firm pointed to on-chain metrics that continue to signal underlying strength.
XWIN highlighted that long-term holder behavior and Bitcoin’s Market Value to Realized Value (MVRV) ratio both indicate “resilience beneath the surface.” The MVRV ratio, which compares Bitcoin’s market value to the average cost basis of holders, has dropped to 2. This means the average cost basis sits at roughly half of Bitcoin’s current price.
“Bitcoin’s recent pullbacks appear less like the end of a rally and more like a period of digestion,” XWIN noted in their analysis. They explained that historically, this MVRV range reflects neither panic nor euphoria among investors. “Investors are still sitting on healthy gains, yet the market has cooled from overheated conditions,” the firm added.
Reduced Selling Pressure and Market Sentiment
Another positive indicator mentioned by XWIN is the decline in profit-taking by long-term investors. This reduction in selling activity “effectively reduces available supply, offsetting short-term volatility and creating the conditions for renewed demand to lift prices higher.”
The firm believes these combined metrics suggest “this cycle has not reached its terminal stage” and that recent consolidation “could mark the groundwork for the next major leg upward.”
Market sentiment has also shown improvement. The Crypto Fear & Greed Index has risen to a “Neutral” reading of 50 out of 100, recovering from a period of “Fear” that began on September 19. This represents a 13-point increase from Sunday and continues an upward trend from last Friday’s low of 28.
Recent Liquidations and Market Impact
Bitcoin’s recovery follows substantial losses for crypto bulls, with over $4 billion in long positions liquidated during two major events in the past week. The first occurred on September 22, wiping out nearly $3 billion in long positions as Bitcoin fell 3% below $112,000. Bitcoin longs accounted for $726 million of these losses.
A second liquidation event on Thursday saw another $1 billion in crypto longs erased, with Ethereum long positions taking the biggest hit at $413 million. These events occurred as Bitcoin dropped to $109,000, dragging the broader market down with it.
While the recent volatility has certainly tested investor confidence, the underlying data suggests the market structure remains healthy. The combination of reduced selling pressure, improved sentiment, and technical indicators pointing to continued strength provides a cautiously optimistic outlook for Bitcoin’s near-term trajectory.
