Bitcoin traded on either side of $70,000 on Monday , following a volatile week that saw the cryptocurrency plunge to a 15-month low before staging a recovery. The stabilization comes as investors assess both macroeconomic signals and the impending clarity surrounding new regulations.
The digital asset experienced a turbulent period, swinging between $60,000 and $80,000 before finding a footing near $70,000 over the weekend, ultimately reaching $71,000 by Monday morning Asia time, according to market data. This rebound followed a period of significant liquidations, which analysts say eased downward pressure and triggered technical buying.
The recovery wasn’t limited to Bitcoin. Ethereum moved back above $2,000, and XRP recorded a substantial 25% single-day increase during the rebound, indicating broader investor sentiment improvement across the digital asset landscape.
Macroeconomic Factors and Whale Activity Fuel Recovery
Improving risk appetite in broader markets appears to have supported the crypto rebound. Progress in discussions regarding a U.S.-India trade deal, with increased expectations for tariff relief, contributed to easing investor concerns over escalating trade tensions. This suggests a correlation between traditional market performance and the fortunes of cryptocurrencies.
On-chain data reveals that large holders, often referred to as “whales,” accumulated significant amounts of cryptocurrency during the recent price dip. This accumulation during the selloff coincided with Bitcoin’s weekend bounce, suggesting a belief among major investors that the downturn presented a buying opportunity.
Regulatory Clarity Looms
This week marks a crucial turning point for the crypto market, with a key regulatory decision expected. will bring increased clarity regarding upcoming regulations, potentially shaping the future trajectory of the industry. The timing of these regulations is a significant factor influencing current market behavior.
Despite the recent stabilization, underlying stress remains within the system. More than 9.3 million BTC currently remain “underwater” – meaning their current market value is below their purchase price – representing the highest level since January 2023. This indicates a substantial number of investors are still holding assets at a loss.
Cost Basis Divergence Signals Ongoing Selling Pressure
A divergence in cost basis between short-term and long-term holders is also apparent. Short-term holders have an approximate cost basis of $94,000, significantly higher than the current market average of around $80,100. This disparity suggests ongoing selling activity from recent purchasers, potentially contributing to continued volatility.
ETF Inflows Provide Support, But Uncertainty Lingers
Despite the lingering caution, institutional demand remains evident. U.S. Spot Bitcoin exchange-traded funds (ETFs) recorded $371 million in net inflows on , as investors stepped in following the sharp correction. BlackRock’s spot Bitcoin ETF alone attracted over $231 million in inflows on , even amidst the week’s volatility. This demonstrates continued interest from institutional investors despite the recent price swings.
Analysts are closely watching key support and resistance levels. The $60,000 level is widely considered a critical downside support, while a sustained break above the $73,000–$75,000 range could confirm a trend reversal. Bitcoin has so far managed to hold above its 200-week moving average near $58,000, a key level during periods of market stress.
However, market participants describe the current environment as cautiously optimistic rather than outright bullish. While the market has stabilized, uncertainty remains regarding whether a durable bottom has been established. The recent volatility underscores the inherent risks associated with cryptocurrency investments.
Looking Ahead
The coming days will be crucial for Bitcoin and the broader cryptocurrency market. The regulatory decision expected on will likely be a major catalyst, potentially driving further price movements. Investors will also be closely monitoring macroeconomic developments and institutional activity for further clues about the market’s direction. The interplay between these factors will determine whether the recent stabilization represents a genuine recovery or merely a temporary respite in a continuing period of volatility.
