Bitcoin and other leading cryptocurrencies are showing signs of recovery after last week's sharp decline, primarily driven by macroeconomic factors.
In the past week, the price of Bitcoin dropped 4%, reaching a multi-week low of $112,000, prompting Arthur Hayes, co-founder of BitMEX, to warn that ongoing macroeconomic pressures could push BTC back down to $100,000.
However, Maksym Sakharov, co-founder and CEO of WeFi, told CryptoSlate that this correction is a natural consequence of an overheated market.
According to Sakharov, Bitcoin's impressive price increase over the past month, followed by a new all-time high, has caused prices to drop almost as predicted. He added that the market is merely taking a breather before continuing its upward trend.
The market is showing strong signs of a comeback as Bitcoin and other major assets, including Ethereum, Solana, and BNB, all begin to recover and show gradual signs of improvement.
Notably, XRP stands out among the top 10 digital assets, rising over 5% in the past 24 hours to surpass the $3 mark after trading at lower levels briefly over the weekend.
On-chain data shows that demand continues
Despite the recent downturn, market analysts remain optimistic about Bitcoin's long-term future.
Abramchart, a contributor at CryptoQuant, emphasizes that Bitcoin's upward momentum has not yet ended, as long-term holders (LTH) continue to demonstrate confidence in this leading cryptocurrency.
According to the analyst, the Unrealized Profit/Loss (NUPL) index remains above 0.5, signaling that Bitcoin is still yielding profits for many investors.
Supporting this view, Darkfost, another analyst, notes that demand for Bitcoin remains strong.
He points out that the number of Bitcoin accumulation addresses that are not selling is increasing, with an average of 50,000 BTC accumulated by these addresses in the past month. This continuous buying behavior reinforces the view that demand for this asset remains strong.
Furthermore, the chart tracking 'clear demand,' comparing the amount of newly minted Bitcoin with the volume of inactive money for over a year, shows a positive trend.
In the past 30 days, approximately 160,000 BTC have been absorbed by long-term holders, further affirming the market's resilience.
Sakharov of WeFi concludes that these patterns indicate that Bitcoin's recent correction is just a part of a broader cycle. He remains confident that this asset is on track to achieve new heights, thanks to structural demand and long-term investor confidence.