- Bitcoin recovered above $112,000 after heavy market liquidations, with analysts saying its bull market remains intact.
- On-chain data and neutral sentiment suggest consolidation could set the stage for the next rally.
Bitcoin briefly surged past $112,000 after a volatile week, reigniting optimism that the cryptocurrency’s bull market is not yet over. Analysts point to on-chain data suggesting that despite recent turbulence, Bitcoin’s long-term outlook remains firmly positive.
A Recovery After Heavy Liquidations
Bitcoin reached a 24-hour high of $112,293 on Monday, the first time it had crossed that level since last week’s steep decline. At the time of writing, the coin trades near $111,835, according to CoinGecko. The recovery comes after a turbulent period that saw over $4 billion in long positions wiped out across the crypto market in just seven days.
On September 22, Bitcoin dropped 3% below $112,000, triggering nearly $3 billion in liquidations. Another $1 billion was wiped out on Thursday when Bitcoin dipped to $109,000. The heavy losses shook investor confidence but also cleared excess leverage from the market.
Analysts See Strength Beneath the Surface
Despite the volatility, research firm XWIN Research Japan argues the bull cycle is intact. In a note via CryptoQuant, XWIN highlighted two key on-chain signals: the behavior of long-term holders and Bitcoin’s Market Value to Realized Value (MVRV) ratio.
Currently, the MVRV ratio stands at 2, indicating that Bitcoin is trading at roughly double the average cost basis of holders. Historically, this level has marked neither peak euphoria nor panic selling. According to XWIN, this suggests that the market is consolidating rather than reversing.
The firm added that long-term investor profit-taking has slowed, effectively reducing supply in circulation. This creates conditions where renewed demand could push prices higher.
Setting the Stage for the Next Rally
XWIN’s analysis concludes that the latest consolidation may represent groundwork for the next upward phase. “This cycle has not reached its terminal stage,” the firm wrote, noting that previous bull runs often entered their strongest expansion phase after consolidating in the same MVRV range.
Market Sentiment Turns Neutral
Adding to the optimism, the Crypto Fear & Greed Index improved to a neutral reading of 50, climbing from a fearful 28 just days earlier. The rebound in sentiment signals that traders are regaining confidence after last week’s sharp corrections.
While volatility has been punishing in recent sessions, analysts maintain that Bitcoin’s structural indicators remain supportive of further gains. If history is any guide, the current phase of digestion could precede another major leg higher for the world’s largest cryptocurrency.
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