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Crypto Market Shows Recovery Signs Following Last Week’s Bearish Scare
The cryptocurrency market is showing early signs of a recovery following last week’s correction, with Bitcoin (BTC) regaining ground above $115,000 and Ethereum (ETH) surging more than 6% in Monday’s session. Other major altcoins, including XRP and Solana (SOL), also posted modest gains as prices rebounded from weekend losses.
This renewed momentum follows a sharp downturn that rattled the market last week, triggering a drop in both spot trading and derivatives activity. Data from Glassnode shows that Bitcoin’s spot trading volume slid from $8.4 billion to $7.5 billion, reflecting reduced investor engagement. Similarly, futures open interest (OI) dipped slightly to $44.9 billion from $45.6 billion, but remained above the structural high of $44.4 billion — a signal that traders are still present, though cautious.
“Such patterns often accompany consolidation phases, as traders remain cautious and wait for clearer signals before re-entering the market with conviction,” Glassnode noted in its latest report.
Dormant Wallets Stir, Profit-Taking Rises
Glassnode also highlighted a significant shift in long-term holder behavior. The Net Unrealized Profit and Loss (NUPL) ratio — a metric that tracks the profitability of Bitcoin holders — declined from 11.5% to 8.5%. This coincides with a sharp uptick in activity from previously dormant wallets.
According to CryptoQuant, wallets inactive for more than seven years have already moved over 215,000 BTC in 2025, rapidly approaching the 255,000 BTC offloaded throughout the entire year of 2024. Analysts interpret this as a sign that long-term holders are increasingly taking profits during recent rallies, possibly putting short-term pressure on price momentum.
Analysts See Healthy Shakeout, Not Capitulation
Despite the recent weakness, several market analysts believe the correction may have been a healthy reset rather than a sign of deeper structural weakness. Analysts at QCP Capital said the drawdown helped flush out excessive leverage, laying a foundation for renewed buying.
“Historically, such post-rally shakeouts, particularly those that flush out excess leverage, have laid the groundwork for renewed accumulation,” QCP said in a client note Monday.
They added that resumption of Bitcoin ETF inflows, declining implied volatility, and narrowing options skew could be key signals of returning institutional interest.
Analysts at Bitfinex shared a similar view, warning that the market could enter a phase of reduced volatility and sideways consolidation if Bitcoin ETF flows or broader macroeconomic catalysts don’t return in force.
“A period of reduced volatility and consolidation may follow unless ETF flows or macro catalysts reassert strong directional momentum,” Bitfinex said in a separate note.
Outlook: Eyes on ETFs and Volatility Metrics
As of this writing, Bitcoin is trading at $115,200, with a 24-hour gain of 0.9%. The recovery is encouraging but still fragile, with traders closely watching ETF inflows, volatility levels, and long-term holder behavior as potential indicators for the next major move.
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