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Bitcoin is poised for a potential breakout, with critical indicators hinting at a significant shift in market momentum.
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Recent analyses suggest that a price surge above the $90K-108K range could be imminent, driven by key supply and demand dynamics.
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According to on-chain analyst Checkmate, “The #Bitcoin Choppiness Index is fully gassed, and ready to trend,” indicating a change in momentum.
Explore how Bitcoin’s market dynamics could lead to a breakout above $100K, driven by declining sell pressure from long-term holders.
Market Dynamics Indicate Bullish Trends for Bitcoin
Bitcoin (BTC) appears set for a possible uptrend, as on-chain metrics suggest that a breakout from the current trading range is likely. The Choppiness Index (CI), which assesses price action patterns, indicates that the current sideways price movement may soon come to an end. This metric’s position highlights a critical juncture for Bitcoin’s price direction.
Key Indicators Point Towards a Price Surge
As highlighted by Checkmate, a noted on-chain analyst, the Choppiness Index is at a crucial point with implications for future price movements. Historically, significant upward or downward trends followed sharp shifts in the CI, which now seems to be primed for action. The CI’s recent rise suggests a strong possibility of price rallying upwards, as evidenced in previous charts showing similar patterns leading to volatility.
Source: CheckOnChain
Decreasing Supply Pressure from Long-Term Holders
Another critical element affecting Bitcoin’s price potential is the easing of selling pressure from long-term holders (LTH). The recent weekly on-chain report from Glassnode reveals a notable decline in sell-side pressure from this group. This trend suggests a growing sentiment towards accumulation as profit-taking from LTH has dropped significantly from $4.5 billion in December to below $400 million in January.
Source: Glassnode
Implications of Historical Price Ranges
Significantly, the average price terrain over the last 60 days also shows potential for a breakout. Glassnode notes that the current compression in price is tighter than historical ranges preceding bullish movements. This pattern indicates a buildup of momentum which could lead to significant volatility in the near future, especially evident during early bull markets or before late-stage capitulations in bear markets.
Source: Glassnode
Conclusion
In summary, current market indicators suggest that Bitcoin could be on the verge of a bullish breakout, potentially pushing prices above the critical $100K mark. The combination of decreasing sell pressure from long-term holders and strong CI signals may pave the way for renewed upward momentum. However, external macroeconomic factors and developments from the newly pro-crypto administration could influence this outlook significantly.
