Bitcoin Shows Resilience After Recent Turbulence
Bitcoin has managed to climb back 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, Bitcoin is trading around $111,835 according to CoinGecko data.
This recovery comes after what many analysts described as investor exhaustion, with Bitcoin struggling to maintain consistent gains. The recent price action has been particularly challenging for traders, leading to substantial liquidations across the crypto market.
Analyst Firm Sees Bull Market Continuation
Despite the recent turbulence, XWIN Research Japan has presented a more optimistic outlook. In a recent CryptoQuant analysis, the firm argued that Bitcoin’s bull market remains intact. They pointed to on-chain data suggesting underlying strength, even as surface-level volatility has unsettled many market participants.
XWIN highlighted two key metrics supporting their view: long-term holder behavior and Bitcoin’s Market Value to Realized Value (MVRV) ratio. The MVRV ratio, which compares Bitcoin’s market value to the average cost basis of holders, has dropped to 2. This level historically indicates neither panic nor euphoria among investors.
“Bitcoin’s recent pullbacks appear less like the end of a rally and more like a period of digestion,” the firm noted. They added that investors still maintain healthy gains, though the market has cooled from previously overheated conditions.
Long-Term Holder Behavior Supports Bullish Thesis
One particularly encouraging sign, according to XWIN, is the reduction in profit-taking by long-term investors. This behavior effectively reduces available supply in the market, potentially offsetting short-term volatility and creating conditions for renewed demand to push prices higher.
The firm believes this cycle hasn’t reached its terminal stage yet. They suggest the recent consolidation could actually lay the groundwork for the next major upward movement, indicating the bull market remains “alive and well.”
Recent Liquidations and Market Impact
Bitcoin’s recovery follows two major liquidation events that wiped out over $4 billion from crypto bulls in the past seven days. The first occurred on Monday, September 22, when nearly $3 billion in long positions were liquidated as Bitcoin fell 3% below $112,000, dragging the broader market down with it.
Thursday brought another significant liquidation event, with approximately $1 billion in crypto long positions wiped out as Bitcoin dropped to $109,000. Bitcoin positions accounted for the majority of the September 22 liquidations at $726 million, while Ethereum long positions led Thursday’s losses with $413 million erased.
Market Sentiment Shows Improvement
Market sentiment appears to be recovering alongside Bitcoin’s price. The Crypto Fear & Greed Index has risen to a “Neutral” reading of 50 out of 100 on Monday, marking a 13-point increase from Sunday. This represents the first time the index has returned to neutral territory since Friday, September 19, after spending time in “Fear” territory.
The index has been trending upward since hitting a low of 28 on Friday, which was its lowest reading since mid-April when Bitcoin fell to $80,000. This gradual improvement in sentiment suggests that while investors remain cautious, the extreme fear that gripped the market last week has begun to subside.
Looking ahead, some analysts continue to predict further upside for Bitcoin, with expectations of reaching $150,000, though they caution that major corrections may still occur before new all-time highs are established.
