Bitcoin is currently valued in the $122,000 price range following an impressive surge in price over the past week. Notably, bullish sentiments surrounding the market leader in cryptocurrency remain strong as analysts speculate that another accumulation phase may have begun. On-chain analytics platform Swissblock has provided an in-depth analysis of the current market conditions, offering insights into potential factors for profits or losses.
BTC Drop to $108,600: A Healthy Reset
Earlier this month, Bitcoin experienced a sharp decline from $117,000 to $108,600, raising concerns of a deeper correction. Although the market has since rebounded, Swissblock clarifies that several on-chain indicators suggest this was more of a constructive reset than a collapse.
The idea of a “reset, not capitulation” is crucial because resets enable markets to eliminate excess leverage, absorb weak-handed sellers, and create space for fresh demand. Swissblock explains that this is precisely what took place in the $114,000–$118,000 range, where numerous late buyers from August sought an exit. Their supply was absorbed, breaking through a cluster of resistance and paving the way to retest all-time highs.
This price decline also underscored the resilience of Bitcoin’s short-term holder (STH) base. Glassnode data indicates that the STH cost basis, or the average price for recent buyers, stands at approximately $111,600. This level has been defended five times since May, marking it as a critical pivot point in the current market cycle.
Long-Term Trends Foster Bullish Outlook, Yet Downside Risks Persist
Simultaneously, Swissblock observes that long-term holders (LTHs) have significantly slowed their distribution rate. While they are still selling, the intensity has decreased compared to previous months. This reduction in supply pressure allows new participants to accumulate with fewer obstacles. Historically, such periods have marked the shift from distribution to accumulation, establishing structural stability and setting the stage for bullish continuation.
Nonetheless, downside risks linger as a resurgence of heavy selling could shift the balance and introduce fragility. However, as long as Bitcoin can avoid entering a high-risk phase, the outlook remains favorable for resilience and upside potential.
At the time of writing, Bitcoin is trading at $122,052, reflecting a slight 1.47% increase over the last 24 hours. Daily trading activity has surged by 19.28%, reinforcing the strength and momentum behind the ongoing market rally. With a market cap of $2.43 trillion, Bitcoin remains the world’s largest cryptocurrency and the fifth-largest asset.
Featured image from Flickr, chart from Tradingview
