Bitcoin's price stands at a decision point after a quiet decline. Since its peak on January 5, Bitcoin has declined but avoided any major collapse. Over the year, Bitcoin remains down about 4.5%, maintaining a slight negative annual performance.
That small red number is more important than it appears. A narrow price window now separates Bitcoin from a rare historical signal that last appeared in 2020. Whether Bitcoin reverses or fails could determine the next direction.
A 4.5% move in the price of Bitcoin may reflect a rare pattern from 2020.
The most notable recent historical analysis prepares a rare setup. When Bitcoin's price change over one year turns negative and then returns to positive, it often indicates major trend shifts. This rare move occurred in July 2020, followed by a strong upward phase.
Currently, Bitcoin hovers just below that turning point. A movement of about 4.5% would turn the annual change positive and repeat that historical state.
The chart structure supports the reason for its importance. Bitcoin is trading within the handle of the cup and handle pattern, which is a bullish formation where the price pauses after a rounded recovery before attempting a breakout.
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It will be interesting to see if the measured breakout distance for this pattern (above the neckline) closely aligns with the same area of 4-5%?
EMA support and a 95% drop in selling pressure enhance the setup.
Short-term trend behavior strengthens the positive argument.
The exponential moving average (EMA) gives more weight to recent prices and helps track the short-term trend. Bitcoin recently reclaimed the pure moving average rate for 20-day periods and continues to maintain this steady rate. The last time Bitcoin reclaimed this level in early January, the price rose by about 7% over days.
The loss of the pure 20-day moving average rate in mid-December led to a 6.6% drop, indicating how reactive the price is around this level. Currently, maintaining upward momentum.
The next obstacle is the 50-day EMA. Bitcoin lost this level on January 12 and corrected shortly thereafter. A clean recovery would indicate a stronger trend recovery and aligns with the cup and handle breakout structure.
On-chain data adds weight. Exchange flows, which track the transfer of coins to exchanges and often indicate selling intent, have collapsed to a six-month low. Daily flows dropped from around 78,600 Bitcoin on November 21 to about 3,700 Bitcoin now, a decrease of over 95%.
This sharp decline indicates that selling pressure has dried up. Fewer coins are being sent to exchanges, reducing the available supply for sale in the rally.
Derivative pressure and key Bitcoin price levels dictate the next phase.
The leverage position adds another layer.
Over the next seven days, the cumulative short liquidation is about $4.10 billion, while the long liquidation exposure is about $2.17 billion. This makes short selling exposure approximately 89% higher than buying exposure (similar to buying).
The crowded short positioning creates fuel. If the price of Bitcoin starts to rise, forced short covering can add automatic pressure. Bitcoin has repeatedly moved against the leverage bias over the past year, making this disparity more noticeable than bearish.
All of this converges at clear price levels.
A daily close above $94,880 would complete the cup and deal with the breakout, aligning with the annual shift of 4.5%. From there, the advanced targets approach $99,810, followed by $106,340 based on Fibonacci extensions and cup breakout projections.
On the downside, $89,230 is the first key support. Losing this level would reveal a value of $86,650 and invalidate the bullish structure.
Currently, the price of Bitcoin sits in a narrow range.
Selling pressure is at a six-month low, short-term trend support persists, and a rare historical signal is just 4.5% away. Whether Bitcoin reaches it may determine what comes next.
