Analyst: BTC's recent drop is a bull market correction with signs of recovery

An analysis suggests that Bitcoin is currently in a corrective phase within a bull market and is showing signs of a structural recovery. XWIN Research Japan, a contributor to CryptoQuant, noted that the recent period of overheated leverage across Bitcoin's futures, spot, and on-chain data has concluded, with early indications of long-term capital inflow now emerging. This pattern is consistent with historical transitions from a correction to an uptrend. The firm pointed to several indicators supporting this view. The Market Value to Realized Value (MVRV) ratio has declined to 1.54, a level historically associated with price rebounds. Open interest has also fallen sharply from $37 billion to $29 billion, signaling that leverage has been flushed out and the market is healing. On-chain data further reveals that whale addresses holding between 10 and 1,000 BTC have been consistently buying, while short-term holders have realized over $900 million in losses, a classic sign of capitulation. Citing a more favorable global regulatory environment and early signs of institutional capital inflow, the analysis concludes that the recent downturn is more likely a deep correction within a bull market than the start of a severe bear market.