Bitcoin Shows Resilience After Volatile Week
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 trading around $111,835, Bitcoin appears to be finding some stability after a challenging period that saw many investors showing signs of exhaustion.
This recovery comes despite two major liquidation events that wiped out over $4 billion in long positions across the crypto market. The first occurred on September 22, when nearly $3 billion in long positions were liquidated as Bitcoin fell 3% below $112,000. Then on Thursday, another $1 billion in crypto longs were wiped out when Bitcoin dropped to $109,000. Bitcoin itself accounted for $726 million of the September 22 liquidations, while Ethereum led the Thursday losses with $413 million in long positions erased.
Analyst Sees Bull Market Continuation
Despite these setbacks, crypto investment firm XWIN Research Japan maintains that Bitcoin’s bull market remains intact. In a recent CryptoQuant note, the firm argued that while recent volatility has unsettled traders, on-chain data continues to suggest the bull market isn’t over. They pointed to long-term holder behavior and Bitcoin’s Market Value to Realized Value (MVRV) ratio as indicators showing “resilience beneath the surface.”
XWIN suggests that Bitcoin’s recent pullbacks appear less like the end of a rally and more like a period of digestion. The MVRV ratio has dropped to 2, with the average cost basis sitting at around half of Bitcoin’s current price. Historically, this level reflects neither panic nor euphoria, which might actually be a positive sign. Investors are still sitting on healthy gains, yet the market has cooled from overheated conditions.
Supply Dynamics Support Price Recovery
One interesting development noted by analysts is the reduction in profit-taking by long-term investors. This effectively reduces available supply, which could offset short-term volatility and create conditions for renewed demand to lift prices higher. XWIN believes this cycle hasn’t reached its terminal stage yet, and the recent consolidation might actually lay the groundwork for the next major upward move.
Meanwhile, market sentiment appears to be improving. The Crypto Fear & Greed Index has risen to reflect a “Neutral” market for the first time since September 19, recovering from a period of “Fear.” The index reached a score of 50 out of 100 on Monday, rising 13 points from Sunday. This continues an uptrend the index has enjoyed since falling to a score of 28 on Friday, which was its lowest point since mid-April when Bitcoin sank to $80,000.
Past cycles have shown Bitcoin entering its strongest expansion phase after consolidating in this MVRV range. While nothing is guaranteed in crypto markets, the current data suggests that the bull market might still have room to run. The combination of reduced selling pressure from long-term holders and improving market sentiment could provide the foundation for Bitcoin’s next move higher.
