Crypto market shows recovery signs following last week's bearish scare

• The crypto market showed signs of recovery on Monday with Bitcoin regaining $115,000 and Ethereum posting a 6% gain.
• The bounce comes after BTC's spot and futures volumes declined last week, indicating traders are exercising caution.
• Dormant coins were also on the move, sparking a pullback in Bitcoin's NUPL from 11.5% to 8.5%.

The crypto market showed signs of recovery on Monday, spearheaded by Bitcoin (BTC) reclaiming the $115,000 mark and a 6% gain in Ethereum (ETH). A few analysts suggest that a return of inflows into Bitcoin exchange-traded funds (ETFs), alongside favorable macroeconomic conditions, could trigger buy-the-dip interests among investors.

Crypto market sees slight recovery after weekend pullback

The crypto market looked set for a recovery on Monday, with Ethereum rising over 6% as Bitcoin moved above $115,000. XRP and Solana (SOL) also posted modest gains, reversing losses from a weekend drop across top cryptocurrencies.

Last week's decline triggered a decline in BTC's spot volume, dropping from $8.4 billion to $7.5 billion, suggesting low engagement from investors, according to on-chain analytics provider Glassnode. Likewise, futures open interest (OI) saw a mild drop to $44.9 billion from $45.6 billion, but it remained above its high band of $44.4 billion, pointing to stable participation from traders, who are still exercising caution.

"Such patterns often accompany consolidation phases, as traders remain cautious and wait for clearer signals before re-entering the market with conviction," glassnode stated in a report on Monday.

Glassnode further highlights a decline in Bitcoin's Net Unrealized Profit and Loss Ratio (NUPL) from 11.5% to 8.5%. The drop in profits coincides with a rise in activity from wallets that were inactive in the past seven years. CryptoQuant data shows that these wallets have moved over 215,000 BTC so far in 2025, rapidly closing in on the 255,000 BTC total they distributed in 2024.  The trend suggests that long-term holders are increasingly booking profits during price rallies.

Analysts hint at potential return of bullish momentum

Meanwhile, QCP analysts suggest that the crypto market's drawdown last week was more of a correction than capitulation, highlighting structural and macroeconomic support as major catalysts for a resurgence.

"Historically, such post-rally shakeouts, particularly those that flush out excess leverage, have laid the groundwork for renewed accumulation," QCP analysts said in a note on Monday.

The analysts hinted that investors could begin a buy-the-dip strategy if Bitcoin ETFs resume inflows and volatility cools. "Signs of stabilization, such as renewed spot ETF inflows, declining implied vols and a narrowing of skew, would be constructive signals that institutional sentiment is recovering," QCP analysts added.

Bitfinex analysts echoed a similar sentiment, suggesting that the market could enter a phase of reduced volatility and consolidation unless Bitcoin ETFs pick up pace again.

"[...] A period of reduced volatility and consolidation may follow unless ETF flows or macro catalysts reassert strong directional momentum," the analysts wrote.

Bitcoin is changing hands at $115,200 at the time of writing, with a slight gain of 0.9% over the past 24 hours.