Bitcoin Shows Resilience After Recent Pullbacks
Bitcoin has managed to recover above $112,000 after experiencing significant volatility 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 trading around $111,835, Bitcoin appears to be finding some stability after what many traders described as an exhausting period.
Analysts had noted signs of investor fatigue in recent days, with the sudden price drop last week triggering two major liquidation events across cryptocurrency markets. But perhaps the market isn’t as fragile as it might seem.
On-Chain Data Suggests Bull Market Intact
According to research from XWIN Research Japan, while recent price swings have unsettled traders, underlying on-chain metrics continue to support the case for an ongoing bull market. The firm pointed to long-term holder behavior and Bitcoin’s Market Value to Realized Value (MVRV) ratio as key indicators showing “resilience beneath the surface.”
Bitcoin’s MVRV ratio has dropped to 2, which means the average cost basis for holders sits at roughly half of Bitcoin’s current price. Historically, this level reflects neither panic selling nor excessive euphoria – it’s more of a middle ground. XWIN’s analysis suggests that “Bitcoin’s recent pullbacks appear less like the end of a rally and more like a period of digestion.”
What’s interesting is that profit-taking by long-term investors has actually decreased. This effectively reduces the available supply in the market, which could help offset short-term volatility and create conditions for renewed demand to push prices higher. The research firm believes this cycle hasn’t reached its terminal stage yet, and the recent consolidation might actually be setting the stage for the next major upward move.
Market Impact and Sentiment Recovery
Bitcoin’s recovery comes after crypto bulls suffered significant losses. Over the past seven days, two major liquidation events wiped out more than $4 billion in long positions across the cryptocurrency market. The first occurred on Monday, September 22, with nearly $3 billion in long positions liquidated as Bitcoin fell 3% below $112,000. Then on Thursday, another $1 billion in crypto longs were liquidated when Bitcoin dropped to $109,000.
Bitcoin positions accounted for the majority of the September 22 liquidations, with $726 million in long bets erased. On Thursday, Ethereum long positions led the losses with $413 million wiped out.
Market sentiment appears to be recovering alongside the price action. The Crypto Fear & Greed Index has risen to reflect a “Neutral” reading for the first time since September 19, recovering from a period of “Fear.” The index reached 50 out of 100 on Monday, up 13 points from Sunday. This continues an upward trend since the index hit a low of 28 on Friday, which was its lowest level since mid-April when Bitcoin fell to $80,000.
Looking at the broader picture, it seems the market might be going through a necessary cooling-off period rather than facing a fundamental shift in direction. The combination of reduced profit-taking, improved sentiment, and technical indicators suggesting the bull market remains intact provides some reassurance to investors who weathered last week’s volatility.
