Bitcoin Hits $122K as Analysts See Bullish Reset

Bitcoin’s recent price action has provided a textbook example of market health restoration, according to Swissblock’s on-chain analysis. The sharp decline from $117,000 to $108,600 earlier this month, while initially alarming to some investors, actually served as a constructive reset rather than signaling capitulation. This distinction is crucial for understanding the current market dynamics and Bitcoin’s subsequent recovery to the $122,000 price region.

The Swissblock analysis emphasizes that such resets perform essential market-clearing functions by flushing out excess leverage and absorbing weak-handed sellers. Specifically, the price range between $114,000 and $118,000 contained significant supply from late buyers who entered the market in August and were seeking exit opportunities. The successful absorption of this supply cluster effectively cleared a major resistance zone, potentially unlocking the path for Bitcoin to retest its all-time highs.

The recent price action has highlighted the remarkable resilience of Bitcoin’s short-term holder base, providing additional evidence of underlying market strength. Glassnode data reveals that the short-term holder cost basis—representing the average purchase price for recent buyers—currently sits at approximately $111,600. This critical level has now been defended five separate times since May, establishing it as a significant pivot point in the current market cycle.

This repeated defense of the STH cost basis demonstrates that newer market participants remain confident in their positions despite temporary price volatility. The ability of this cohort to withstand selling pressure without panic liquidation contributes to market stability and suggests that the current rally has solid foundations rather than being driven purely by speculative frenzy.

Complementing the strength shown by short-term holders, Swissblock’s analysis notes a significant shift in behavior among Bitcoin’s long-term holder cohort. These seasoned investors have noticeably slowed their rate of distribution, creating a more favorable supply-demand balance. While long-term holders continue to realize profits through selling, the pace has moderated considerably compared to previous months.

Historically, such phases of reduced selling pressure from long-term holders have marked the transition from distribution to accumulation periods. This structural shift typically creates market stability and sets the stage for bullish continuation. The current cooling of supply pressure allows new market participants to accumulate Bitcoin with less resistance, potentially building the foundation for the next leg upward in the ongoing bull market.

At the time of writing, Bitcoin trades at $122,052, reflecting a 1.47% gain over the last 24 hours. More significantly, daily trading activity has surged by 19.28%, indicating strong momentum behind the ongoing market rally. With a market capitalization of $2.43 trillion, Bitcoin maintains its position as the world’s largest cryptocurrency and the fifth-largest asset globally.

Despite the overwhelmingly positive indicators, Swissblock cautions that downside risks remain present in the market. A resurgence of heavy selling pressure could potentially tip the balance and reintroduce market fragility. However, as long as Bitcoin avoids slipping into a high-risk regime characterized by panic selling or excessive leverage, the current outlook favors continued resilience and upside potential. The combination of cleared resistance, strong short-term holder support, and moderated long-term holder selling creates a compelling case for Bitcoin’s continued strength in the near term.