In the last few trading sessions, the price of Bitcoin has increased by about 3%. However, the current dynamics are sending mixed signals to the market. Despite the bullish structure being maintained, a short-term halt in growth appears to be the most likely scenario.
Such a pause may cause temporary disappointment among traders, but it is precisely what completes the formation of the graphical pattern for a substantial upward breakout.
Does the consolidation look likely?
The daily chart clearly shows a potential 'cup with handle' figure. This model arises when the price gradually recovers after a period of sell-offs, stabilizes, and then consolidates before the final breakout.
The last daily candle closed in the green zone but formed a long upper wick. This indicates high selling activity at local highs. Consequently, the market is entering an accumulation phase, which is necessary for completing the formation of a 'handle' in technical analysis.
On-chain analysis data supports the hypothesis of a temporary lull. The Hodler Net Position Change metric shows that long-term investors have returned to accumulation while being cautious. Since December 26, market participants have been steadily replenishing their portfolios. However, the peak purchase volume on January 4 amounted to 12 349 BTC. This is 93% lower than the maximum sales figures recorded at the end of November (185 451 BTC).
The derivatives market also indicates the need for consolidation. The liquidation map for the BTC/USDT pair on the Binance exchange shows a significant imbalance. The volume of long leveraged positions is around $2.24 billion, while short positions are only $416 million. Thus, the total position of buyers exceeds that of sellers by more than five times.
When the volume of excessive leverage reaches such values, even a slight correction can trigger a cascade of liquidations. This risk limits the potential for immediate growth and contributes to sideways price movement.
Why the growth potential remains
Despite the risks of a temporary decline, the pressure from sellers continues to weaken. A key indicator is the influx of assets to exchanges. On December 31, this parameter reached 43 940 BTC, but by January 5, the value had dropped to 3 970 BTC. The decline in supply volume on trading platforms amounted to more than 90% in just a few days.
It is important to note that the asset quotes rose in parallel with a decrease in the influx to exchanges. Such divergence indicates that traders are not eager to take profits during the current strengthening of the price.
An additional confirmation is provided by the Spent Coins Age Bands metric, which tracks the movement of 'old' and 'young' coins. Activity in asset movement has decreased by 80%, indicating that investors are entering a wait-and-see mode.
Key price levels and forecasts
In the current consolidation conditions, the technical structure of the chart becomes more important than immediate momentum. To maintain the bullish scenario, Bitcoin needs to stay above the mark of $89 450. A drop below the level of $84 320 completely nullifies the bullish model and opens the way for a deeper correction.
To resume growth, the first target is the level of $93 560, located at the 'neckline' of the forming figure. A price fixation above $94 710 will be the final confirmation of the breakout.
Based on the height of the graphical figure 'cup', the calculated target for the movement is around $104 000. This suggests a price increase of another 12% from current values. If strong momentum is maintained, the next significant resistance will be at the mark of $107 460. In the short term, the market may move within a sideways range; however, the conclusion of the technical pause will create prerequisites for movement that will be extremely difficult to stop.