A Bitcoin analyst believes that as Bitcoin briefly rose above $112,000 on Monday, it remains in a bull market after experiencing significant volatility over the past week.
Bitcoin struggled over the past week, with analysts noting signs of fatigue among investors. The sudden drop last week led to two major liquidation events in the broader cryptocurrency market.
During early trading on Monday, Bitcoin reached a 24-hour high of $112,293, breaking above $112,000 for the first time since a sharp decline on Thursday. According to CoinGecko data, it is currently trading at $111,835.
However, cryptocurrency investment firm XWIN Research Japan stated in Sunday’s CryptoQuant report, "While recent volatility has unsettled traders, on-chain data continues to indicate that the Bitcoin bull market is not over."
The firm noted that the behavior of long-term holders and the Bitcoin market value to realized value (MVRV) ratio—comparing its market value to the average cost basis of holders—together show "resilience beneath the surface."
"Bitcoin's recent pullback does not appear to be the end of the rebound, but rather a period of digestion," XWIN added.
The MVRV ratio for Bitcoin has dropped to 2, with the average cost basis being about half of the Bitcoin price. XWIN stated that historically, this "neither reflects panic nor euphoria."
"Investors still enjoy healthy returns, but the market has cooled from an overheated state," the firm explained, adding that past cycles show that Bitcoin enters the "strongest expansion phase" after consolidating within this MVRV range.
Meanwhile, profit-taking among long-term investors has decreased, with XWIN stating that this "effectively reduces available supply, offsets short-term volatility, and creates conditions for renewed demand to push prices higher."
XWIN indicated that these two metrics show "this cycle has not yet reached its terminal phase," adding that the recent consolidation "may lay the groundwork for the next major upward phase—indicating that the bull market remains active and well."
Bitcoin's recovery comes after cryptocurrency bulls lost over $4 billion in the past 7 days due to two major liquidations.
The first major liquidation occurred on Monday, September 22, as Bitcoin fell 3% below $112,000, dragging the entire market down. According to CoinGlass data, nearly $3 billion in long positions in the cryptocurrency market were liquidated.
Subsequently, another $1 billion in total cryptocurrency long liquidations occurred on Thursday, as the market was again dragged down by Bitcoin's drop to $109,000.
Bitcoin accounted for a significant portion of the liquidations on September 22, with $726 million in long positions being liquidated, while Ethereum (ETH) long bets led the decline on Thursday, with $413 million liquidated.
Meanwhile, the cryptocurrency fear and greed index, which tracks sentiment, has risen, reflecting that the market has shown "neutral" for the first time since Friday, September 19, recovering from a period of "fear."
The index reached 50 out of 100 on Monday, up 13 points from Sunday.
This continues the upward trend of the index since it fell to 28 points on Friday, the lowest level since Bitcoin dropped to $80,000 in mid-April.
Related: NYDIG: The crypto industry must stop using "misleading" mNAV metrics
Original article: “Bitcoin (BTC) recovers to $112,000, analyst says the bull market is 'not over'”
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