Bitcoin is showing fresh signs of recovery after rebounding sharply above $112,000, signaling a possible end to the recent correction that rattled the broader crypto market. The uptick comes after a weekend of heavy liquidations and growing fear among traders, suggesting that the worst of the selling pressure may be over.
Bitcoin trades near $112,855, up over 3.4% in the past 24 hours, with a market capitalization exceeding $2.25 trillion. Trading volume has also surged past $71 billion, indicating renewed market activity after last week’s steep downturn.
Technical Indicators Point Toward Renewed Buying Momentum
Bitcoin’s short-term momentum is turning bullish across multiple technical indicators. TradingView’s market summary shows a clear “Buy” rating, supported by both oscillators and moving averages. Out of 26 total indicators, 14 suggest a buy, while only four lean bearish.
The Relative Strength Index (RSI) currently stands around 63, signaling growing momentum without entering overbought territory. This reading indicates there’s still room for an upward move before buyers reach exhaustion. Meanwhile, the Moving Average Convergence Divergence (MACD) has turned positive, with the blue signal line crossing above the orange trend line – a pattern often associated with the beginning of bullish phases.
On the 4-hour chart, Bitcoin’s candles show a strong push from the $108,000 region, with resistance currently forming near $113,000-$115,000. If bulls maintain this trajectory, a retest of the $120,000 psychological level could follow.
Exchange Outflows Suggest Accumulation by Long-Term Holders
On-chain data reinforces the technical optimism. Bitcoin recorded net outflows of $88.8 million from exchanges on October 19, indicating that more coins are being withdrawn to cold wallets rather than kept for trading. This behavior is typically viewed as accumulation by long-term holders (LTHs), who tend to reduce market supply and create upward pressure on prices over time.
Historically, sustained exchange outflows often precede extended bullish cycles. The timing of this latest shift, coming immediately after one of the largest liquidation events of the quarter, adds weight to the argument that institutional participants and experienced traders may be re-entering accumulation mode.
Massive Liquidations Clear the Market for Fresh Upside
The liquidation heatmap from Coinglass paints a dramatic picture: over $525 million in leveraged positions were wiped out in the past 24 hours. Bitcoin accounted for nearly $210 million of that figure, with shorts representing the majority at $120 million.
Such widespread liquidations tend to act as a reset for derivatives markets, flushing out overleveraged positions and paving the way for more organic price action. With excessive short exposure cleared, Bitcoin’s path toward higher resistance levels could now be less obstructed.
Ethereum also faced significant liquidations, totaling $145 million, followed by Solana and other major altcoins. The event effectively neutralized high-risk speculative positions, contributing to the recent price stabilization observed across top assets.
Fear and Greed Index Shows Modest Improvement
Market sentiment remains fragile but is beginning to recover. CoinMarketCap’s Crypto Fear and Greed Index currently reads 33, up slightly from 30 the previous day. Despite remaining in the “Fear” zone, this improvement hints that investors are slowly regaining confidence after a turbulent week.
Over the past month, the index has swung between neutral and fearful territory, tracking Bitcoin’s correction from highs above $120,000. Analysts note that sentiment often lags behind price action – meaning renewed optimism could follow if Bitcoin sustains this rebound throughout the week.
Altcoin Season Weakens as Bitcoin Regains Dominance
CoinMarketCap’s Altcoin Season Index dropped to 27, signaling a clear shift toward Bitcoin dominance. Just one month ago, the same index stood at 69, firmly in altcoin territory. This decline illustrates how capital has rotated out of riskier assets and back into Bitcoin, a common pattern when uncertainty increases.
The total altcoin market capitalization has hovered around $1.5 trillion, while Bitcoin’s dominance continues to climb as it captures a larger share of inflows. Historically, Bitcoin seasons often precede altcoin rallies by several weeks, suggesting that if stability continues, an altcoin recovery could follow later in the quarter.
Bitcoin Price Outlook
In the short term, Bitcoin’s ability to hold above $110,000 remains critical. The $115,000-$117,000 zone acts as immediate resistance, with a potential breakout paving the way toward $120,000-$122,500. If momentum continues, analysts anticipate further buying pressure as sidelined investors re-enter the market.
Conversely, failure to sustain current levels could trigger a pullback toward $107,000, where significant support lies from prior accumulation ranges. However, with RSI momentum rising and on-chain outflows strengthening, the balance currently leans in favor of the bulls.
This is the most important support trendline for Bitcoin $BTC! pic.twitter.com/jCJmwkoipi
— Ali (@ali_charts) October 21, 2025
Market Sentiment Turning Cautiously Optimistic
After a volatile start to October, Bitcoin’s rebound above $112,000 has shifted the short-term outlook from defensive to cautiously optimistic. The combination of improving technicals, reduced leverage risk, and continued on-chain accumulation paints a constructive picture heading into the final stretch of the month.
While volatility remains high, traders appear increasingly confident that Bitcoin’s long-term uptrend remains intact – and with altcoins temporarily sidelined, the flagship cryptocurrency continues to lead the charge in digital asset recovery.