Key Points
- Bitcoin’s price has been fluctuating within a narrow range, but historical trends and on-chain data hint at an imminent breakout.
- Decreasing selling pressure and an ongoing deleveraging phase suggest a potential market recovery for Bitcoin.
Bitcoin’s price has been oscillating within a limited range, with the top range around $84,000 and the bottom at $82,000. Despite this, historical trends and on-chain data indicate a potential breakout.
Buyers have been struggling to push Bitcoin’s price higher, but historical patterns and data hint at the possibility of a market shift.
Historical Trends and On-Chain Data
Rekt Capital’s analysis from March 18th reveals similarities between Bitcoin’s current price movement and its trajectory in June 2021. After a significant drop in price, Bitcoin was caught between the 21-week and 50-week EMAs, similar to the current situation.
Bitcoin managed to break out of this range in late July, reaching an all-time high in November. This has led to speculation that history may be about to repeat itself.
Rekt Capital has also noted that Bitcoin’s selling pressure is on the decline. Recent sell-offs have been accompanied by lower-than-average volume, indicating a loss of momentum among sellers. This shift has created an opportunity for buyers, leading to a buyer-dominant period last week. Such shifts have previously led to strong uptrends.
Bitcoin’s Deleveraging Phase and UTXO Age Bands
According to CryptoQuant, Bitcoin is currently in a deleveraging phase, which involves the removal of excess leverage from the market. Historically, these phases have resulted in short-to-medium term buying opportunities and set the stage for recoveries. Bitcoin has often seen strong price rebounds following leverage resets in past market cycles.
The increase in the 3-6 month UTXO age bands, which show how long Bitcoin has been held, is another key indicator. CryptoQuant’s analysis from March 15th shows that the number of coins in this category is on the rise, similar to the mid-2024 correction.
This suggests that more investors are holding onto their Bitcoin rather than selling, reducing the supply available. In past cycles, this type of accumulation has been instrumental in establishing market bottoms and sparking new rallies.
However, despite these positive signs, outflows from US-based Bitcoin ETFs have continued for a record-breaking fifth consecutive week. The previous record was set in April 2024, with four weeks of outflows.
While this may suggest short-term uncertainty, Bitcoin could be on the verge of a significant move if selling pressure continues to decrease and accumulation increases. If previous patterns persist, a breakout could be on the horizon.
