A recent analysis suggests that Bitcoin remains in a bull market following a brief recovery that saw its price exceed $112,000 on Monday. The leading cryptocurrency experienced significant volatility over the previous week, prompting concerns among analysts regarding investor fatigue. Bitcoin’s sharp decline last week triggered two major liquidation events in the broader crypto market, further complicating the landscape for investors.
On Monday, Bitcoin reached a 24-hour high of $112,293, marking its first return above $112,000 since a notable drop earlier in the week. As of the most recent data from CoinGecko, Bitcoin is trading at approximately $111,835.
According to XWIN Research Japan, a crypto investment firm, recent fluctuations may have unsettled some traders, but on-chain data suggest that the bull market for Bitcoin is still intact. The firm highlighted that the behavior of long-term holders, alongside Bitcoin’s Market Value to Realized Value (MVRV) ratio—an important metric comparing market value to the average cost basis of holders—indicates underlying resilience. The MVRV ratio recently fell to 2, which XWIN described as an indicator of stable market conditions that reflect “neither panic nor euphoria.”
XWIN elaborated that while past price corrections might suggest a market in distress, the current pullback seems more like a “period of digestion.” This implies a consolidation phase rather than a straightforward decline. The average cost basis for holders is now roughly half of Bitcoin’s current market value. Historical trends indicate that similar conditions have frequently preceded a strong expansion phase in the market.
Moreover, the firm noted a decline in profit-taking by long-term investors, which effectively reduces Bitcoin’s available supply. This dynamic could help balance out short-term volatility and create an environment conducive to renewed price appreciation.
In sharp contrast to this optimistic outlook, the past week has seen a significant number of liquidations among crypto traders. In total, over $4 billion was lost across both major liquidation events. The first incident on September 22 involved nearly $3 billion in long positions being liquidated due to a 3% drop in Bitcoin’s value, pulling the broader market down with it. The following Thursday witnessed another $1 billion in long positions liquidated as Bitcoin dipped below $109,000.
During these events, Bitcoin was primarily affected, with $726 million in longs erased on September 22. However, Ethereum long positions were hit harder in the subsequent event, leading to $413 million in liquidations.
In a sign of changing market sentiment, the Crypto Fear & Greed Index has shifted to a “Neutral” position for the first time since September 19, recovering from a previous state of “Fear.” The index recorded a score of 50 out of 100 on Monday, representing a 13-point increase from the previous day. This uptrend follows a notable decline where the index had dropped to 28, its lowest score since mid-April when Bitcoin fell to around $80,000.
Market analysts and investors are left watching closely, with speculations emerging about the possibility of Bitcoin reaching significantly higher values in the near future, potentially aiming for the $150,000 mark, while Ethereum faces increased pressure.
