Bitcoin Shows Resilience After Volatile Week
Bitcoin has managed to climb back above $112,000 in early Monday trading, reaching $112,293 at its peak. This recovery comes after a week of significant market turbulence that saw the cryptocurrency experience two major liquidation events. The price movement suggests some stability returning to the market, though it’s still early to tell if this represents a true trend reversal.
Currently trading around $111,835, Bitcoin appears to be finding its footing after last week’s sharp declines. The volatility had many investors concerned about whether the bull market might be ending, but some analysts see things differently.
On-Chain Data Points to Continued Bull Market
XWIN Research Japan published analysis suggesting that despite recent price swings, Bitcoin’s underlying fundamentals remain strong. Their research points to on-chain metrics that indicate the bull market isn’t over yet. The firm noted that long-term holder behavior and Bitcoin’s Market Value to Realized Value (MVRV) ratio both show “resilience beneath the surface.”
What’s interesting is that the MVRV ratio has dropped to 2, which historically reflects neither panic nor euphoria among investors. This might actually be a healthy development. The average cost basis sits at around half of Bitcoin’s current price, meaning most holders are still in profit but the market has cooled from overheated conditions.
I think this analysis makes sense when you look at past cycles. Bitcoin has often entered its strongest expansion phases after consolidating in this MVRV range. It’s like the market is catching its breath before the next move.
Market Liquidations and Sentiment Recovery
The recovery comes after a painful week for crypto bulls. Over $4 billion in long positions were liquidated across two major events in the past seven days. The first hit on September 22 wiped out nearly $3 billion, followed by another $1 billion liquidation on Thursday.
Bitcoin positions accounted for $726 million of those losses on September 22, while Ethereum long bets took the biggest hit on Thursday with $413 million wiped out. These liquidations created significant selling pressure and contributed to the market’s downward momentum.
Market sentiment appears to be recovering though. The Crypto Fear & Greed Index has risen to 50 out of 100, moving from “Fear” to “Neutral” territory for the first time since September 19. This represents a 13-point jump from Sunday and continues an upward trend from last Friday’s low of 28.
Looking Ahead
XWIN’s analysis suggests that reduced profit-taking by long-term investors is effectively decreasing available supply. This could help offset short-term volatility and create conditions for renewed demand to push prices higher. They believe this cycle hasn’t reached its terminal stage and that recent consolidation might actually lay the groundwork for the next major upward move.
While it’s impossible to predict exact price movements, the combination of improving sentiment, reduced selling pressure from long-term holders, and healthy on-chain metrics provides some reason for cautious optimism. The market seems to be in a digestion phase rather than facing a complete trend reversal.
Of course, crypto markets remain highly volatile, and past performance doesn’t guarantee future results. But for now, the data suggests the bull market narrative still has legs, even if the ride continues to be bumpy.
