Following a volatile week, Bitcoin briefly surpassed $112,000, signaling a recovery. This prompted one analyst to state that the cryptocurrency was still in an uptrend.
Bitcoin’s bull market status has been argued by one analyst as the cryptocurrency briefly recovered to over $112,000 on Monday, following a week of significant volatility.
After a sudden drop last week, Bitcoin has struggled to gain ground, prompting analysts to say that investors were showing signs of exhaustion. The drop resulted in two major liquidation events across the wider crypto market.
In early trading on Monday, a 24-hour high of $112,293 was reached by Bitcoin, surpassing $112,000 for the first time since its sharp drop on Thursday. According to CoinGecko, it is currently trading at $111,835.
Bitcoin Bull Market Remains Alive
In a CryptoQuant note on Sunday, it was said by crypto investment firm XWIN Research Japan that while recent volatility had unsettled traders, on-chain data continued to suggest that Bitcoin’s bull market was not over.
It said that the behavior of long-term holders and Bitcoin’s Market Value to Realized Value (MVRV) ratio, which compares its market value to the average cost basis of holders, together show “resilience beneath the surface.”
It was added by XWIN that Bitcoin’s recent pullbacks appear less like the end of a rally and more like a period of digestion.
Bitcoin’s MVRV ratio has dropped to 2, with the average cost basis at around half the value of Bitcoin’s price. This, according to XWIN, historically “reflects neither panic nor euphoria.”
It was explained that “investors are still sitting on healthy gains, yet the market has cooled from overheated conditions.” It was added that past cycles have seen Bitcoin enter “its strongest expansion phase” after consolidating in this MVRV range.
Meanwhile, profit-taking by long-term investors has fallen. This, according to XWIN, “effectively reduces available supply, offsetting short-term volatility and creating the conditions for renewed demand to lift prices higher.”
XWIN stated that the two metrics show “this cycle has not reached its terminal stage.” It was added that the recent consolidation “could mark the groundwork for the next major leg upward, suggesting the bull market is alive and well.”
Bitcoin Drop Wipes Out Crypto Long Positions
Bitcoin’s recovery comes after crypto bulls were wiped out of over $4 billion in two major liquidations over the past seven days.
Based on CoinGlass data, just under $3 billion in long positions across the crypto market were wiped out during the first major liquidation on Monday, Sept. 22. This happened as Bitcoin fell 3% to below $112,000, dragging the rest of the market down.
This was followed up with a $1 billion liquidation of total crypto longs on Thursday, with the market once again hampered by Bitcoin’s drop to $109,000.
On September 22, Bitcoin accounted for the majority of the liquidations, with $726 million in longs being erased. Meanwhile, on Thursday, long bets on Ether led, with $413 million being wiped out.
Crypto Sentiment Climbs to Neutral
Meanwhile, the sentiment tracking Crypto Fear & Greed Index has risen to reflect that the market is “Neutral” for the first time since Friday, 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.
The index’s uptrend has continued since falling to a score of 28 on Friday, its lowest since mid-April when Bitcoin sank to $80,000.
