The world’s leading crypto asset, Bitcoin, executed a powerful recovery maneuver this Monday morning, surpassing the $112,000 mark and erasing much of the previous week’s losses. This rebound was driven by renewed buying pressure over the weekend, an event that, according to analysts like Farzam Ehsani, CEO and co-founder of the VALR exchange, reflected macro relief and accumulation by large players.
As an immediate result of this upward movement, the price of Bitcoin (BTC) experienced an increase of more than 2.5% in 24 hours, according to market data. This momentum not only served to neutralize the wave of liquidations that rocked the sector last week but also injected vitality into the altcoin market. Consequently, the total cryptocurrency market capitalization has approached the impressive figure of $4 trillion.
It is important to note that the rally generated a streak of short position liquidations exceeding $350 million, indicating an abrupt change in the sentiment of leveraged traders. The previous volatility episode had been marked by a sharp drop in the open interest of CME-based Bitcoin futures, with a $2.83 billion decrease, and a $1.50 billion drop in options, signaling a significant adjustment in institutional exposure. The altcoin market also soared remarkably.
The current resurgence of the Bitcoin price is interpreted as more than just a technical bounce. According to Farzam Ehsani, this move is intrinsically linked to macroeconomic factors, including a weaker US dollar and more stable interest rate expectations. This “macro relief” allowed the market to clean up excessive leverage after recent drops, facilitating the reentry of large players. This cycle is fundamental in the digital economy.
Analysts at the Singapore-based trading desk QCP Capital agreed that the net capital outflows observed in spot Bitcoin exchange-traded funds (ETFs) during the previous week should not be interpreted as a sign of structural weakness. On the contrary, these outflows were attributed to the usual quarter-end basis rebalancing, a temporary adjustment that often precedes significant bullish movements.
The persistent strength and rapid recovery of Bitcoin around $112,000 suggests remarkable resilience in the native cryptocurrency investor base. Unlike institutional traders who readjusted through CME products, perpetual traders have intensified their optimism. QCP Capital noted an increase in Bitcoin perpetual open interest, which rose from $42.8 billion to $43.6 billion, accompanied by positive funding rates. This growth in risk appetite is a key indicator of confidence in the asset’s short-term future. Heading into the fourth quarter, a historically bullish period for Bitcoin with an average return of 52%, the outlook is decidedly optimistic.
The Halving narrative is quickly approaching.
The rapid validation of the $112,000 support level positions Bitcoin favorably for the coming months. Although short-term uncertainty persists, with an eye on key global economy events like the release of September’s Nonfarm Payrolls (NFP), the general sentiment remains bullish. Shawn Young, chief analyst at MEXC Research, emphasized that Bitcoin will continue to anchor market sentiment, a stance reinforced by the impending halving narrative. Investors are actively capitalizing on the leverage cleanup and macroeconomic relief, setting the stage for a potentially robust year-end.
