Bitcoin prices plummeted on Friday, falling from $122,000 to a low of $102,000, but have been steadily recovering.
However, this recovery was driven not by leveraged traders, but by spot holders who have shown remarkable resilience in volatile conditions.
Bitcoin holders show restraint
Despite the market selloff, Bitcoin investors are showing strong belief. While Bitcoin has fallen over the past three days, only about 6,000 Bitcoins (worth about $688 million) have flowed into exchanges, according to exchange net position data. This limited inflow indicates minimal selling activity from holders despite the spike in volatility.
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While many futures traders faced liquidation in the crash, cash investors held firm. Their decision to hold onto their positions rather than sell at a loss acted as a stabilizing force and prevented a sharp decline.
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The overall market momentum remains cautious. The Bitcoin long/short bias chart, which measures the total net positions of major BTC traders on HyperLiquid, showed a sharp increase in net shorts starting on October 6, days before the crash. This early shift suggested growing bearish sentiment among institutional traders.
Some of these positions have since declined, but the chart is still significantly negative. This suggests that while the recovery is underway, market sentiment has not completely shifted in an optimistic direction.
BTC price is trying to recover
Bitcoin is currently trading around $114,553, just below the key resistance level of $115,000. It briefly broke above this mark during the intraday high, but failed to maintain momentum, indicating continued selling pressure around this mark.
In the short term, the outlook for Bitcoin remains cautiously bullish, supported by strong holder sentiment. Successful collection of $115,000 could pave the way to $117,261 and ultimately $120,000. However, a full recovery would require a sustained pushback to $122,000.
However, if bearish pressure from traders outweighs investor restraint, Bitcoin could fall below $112,500. This could cause the crypto tycoon to test the $110,000 support level, invalidating the bullish outlook.
