- Bitcoin could move higher above the $90,000-108,000 range.
- The choppiness index and reduced selling pressure from long-term holders boosted the breakout prospects.
Bitcoin [BTC] seemed poised for a renewed uptrend, with key indicators suggesting a decisive breakout from the $90,000-108,000 range was imminent.
One of the metrics, the choppiness index (CI), which measures BTC’s price action relative to its price consolidation, implied that the ongoing sideways move was about to end.
On-chain analyst Checkmate even reinforced this outlook declared,
“The #Bitcoin Choppiness Index is completely gassed and ready to trend. As discussed in late November, the thesis was that we likely had several weeks of chop consolidation before we properly moved off the $100k level. We are here.”
Historically, a sharp increase in the weekly CI (red) has indicated consolidation (purple blocks) according to the accompanying chart.
On the contrary, a decrease in CI coincided with sharp upward or downward trends (orange blocks). Now that the CI is at an inflection point after a recent surge, a pullback would imply a renewed up or down trend of BTC.
Given the new pro-crypto Trump administration, the market was leaning towards the former (probably uptrend).
BTC supply pressure is decreasing
Another key bullish indicator was easing BTC supply pressure from long-term holders (LTH). In his last “weekly in the chain” In the report, Glassnode highlights that LTH’s selling pressure has decreased significantly.
“Sell-side pressure from long-term investors has also eased, in addition to volumes being deposited on exchanges for sale.”
Source: Glassnode
The analytics firm noted that profit-taking from this cohort was $4.5 billion in December, but fell below $400 million in January. As a result, the trend leaned toward renewed BTC accumulation.
“Currently, overall LTH supply is beginning to show signs of positive growth, indicating that accumulation and HODLing behavior is now greater than distribution pressure for this cohort.”
Finally, the average price range over a 60-day period also indicated a possible breakout.
Glassnode added that the current sideways structure is tighter than the 60-day historical price range, which always precedes bullish breakouts.
“The chart highlights periods with a tighter 60-day price range than the current trading range. All of these cases have occurred before a significant burst of volatility, with the majority occurring in early bull markets, or before capitulations in late-stage bear cycles.”
Source: Glassnode
Taken together, the above statistics show that there is a strong upward trend above $100,000 could be on the cards. However, it remains to be seen how macro updates and announcements from the Trump administration will impact this outlook.