Bitcoin's price is at a decision point after a slight retracement. Since the January 5 peak, Bitcoin has slipped but avoided a major crash. On an annual basis, Bitcoin remains down about 4.5%, maintaining a slightly negative yearly performance.
What a small red number counts more than it seems. A narrow price window now separates Bitcoin from a rare historical signal last seen in 2020. Whether Bitcoin reverses course or not could determine the next trend.
A 4.5% move in Bitcoin's price could echo a rare 2020 pattern
A recent historical analysis has highlighted a rare setup. When Bitcoin's annual price change turns negative and then returns to positive, it often signals major trend shifts. This rare move occurred in July 2020, shortly followed by a strong bullish phase.
Right now, Bitcoin is fluctuating just below that turning point. A move of about 4.5% would bring the annual figure back into positive territory, replicating that specific historical condition.
The chart structure explains why this is important. Bitcoin is trading within the handle of a cup and handle pattern, a bullish formation where price pauses after a curved recovery before attempting a breakout higher.
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It would be interesting to see whether the expected breakout distance for this pattern (above the neckline) precisely aligns with that same 4–5% zone?
EMA support and a 95% drop in selling pressure strengthen the setup
The short-term trend behavior is reinforcing the bullish thesis.
An exponential moving average (EMA) gives more weight to recent prices and helps track the short-term trend direction. Bitcoin has recently reclaimed its 20-day EMA and is holding above it. The last time Bitcoin reclaimed this level at the beginning of January, the price rose nearly 7% in just a few days.
The loss of the 20-day EMA in mid-December led to a 6.6% drop, highlighting how responsive the price is around this level. For now, staying above it preserves the bullish momentum.
The next hurdle is the 50-day EMA. Bitcoin lost this level on January 12 and corrected shortly after. A strong recovery would represent an even stronger sign of recovery and would be consistent with the cup and handle breakout structure.
On-chain data further strengthens the picture. Inflows to exchanges—tracking coins transferred to platforms, often signaling selling intentions—have plummeted to six-month lows. Daily inflows have dropped from around 78,600 Bitcoin on November 21 to just 3,700 Bitcoin today, a decline exceeding 95%.
This sharp drop suggests selling pressure has nearly exhausted. Fewer coins are being sent to exchanges, reducing the available supply for potential sales during rallies.
Derivatives pressure and Bitcoin's key price levels determine the next phase
The leverage positioning adds another element.
Over the next seven days, cumulative short liquidation exposure stands at around $4.10 billion, while long exposure is around $2.17 billion. This means short exposure is approximately 89% higher than long positions.
An overcrowded short position creates potential fuel. If Bitcoin's price starts rising, forced short covering could add automatic buying pressure. Bitcoin has repeatedly moved against leverage trends over the past twelve months, making this imbalance more interesting than bearish.
All of this converges on well-defined price levels.
A daily close above $94,880 would complete the 'cup and handle' breakout and align with the annual reversal of 4.5%. From there, upside targets are close at $99,810, followed by $106,340 according to Fibonacci extensions and the cup breakout projection.
On the downside, $89,230 is the first key support. Losing this level would expose $86,650 and invalidate the bullish structure.
For now, Bitcoin's price is in a narrow range.
Selling pressure is at its lowest in six months, the short-term trend support is holding, and a rare historical signal is just 4.5% away. If Bitcoin reaches it, it could define what happens next.
