Bitcoin price is at a decision point after a quiet pullback. BTC has declined somewhat since peaking on January 5, but has avoided any major collapse. Bitcoin is still down about 4.5% year-on-year, and its annual performance remains slightly negative.
That little red number is more important than it looks. A narrow price window now separates Bitcoin from a rare historical signal last seen in 2020. Whether Bitcoin flips or fails could determine the next trend.
Recent historical analysis highlights a rare setting. When Bitcoin’s one-year price change turns negative and then positive again, it usually signals a major trend shift. This rare move occurred in July 2020 and was followed by a strong bull phase.
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Currently, Bitcoin is hovering below that inflection point. A move of about 4.5% would turn the annual change into the green and repeat this historical scenario.
The diagram structure supports the importance of this. Bitcoin is trading within a cup-and-handle pattern, a bullish formation in which price pauses after a full recovery and then attempts a breakout.
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It will be interesting to see if the measured breakout distance of this pattern (above the neckline) closely aligns with the same 4-5% area?
Short-term trend behavior is reinforcing the bullish case.
The exponential moving average (EMA) puts more emphasis on recent prices and helps track short-term trend direction. Bitcoin recently reclaimed the 20-day moving average and remains above it. The last time BTC regained this level was in early January, with the price rising by nearly 7% in a matter of days.
The loss of the 20-day moving average in mid-December caused the stock price to drop 6.6%, showing how reactive the price was around that level. For now, staying above this level keeps upside momentum intact.
The next hurdle is the 50-day moving average. Bitcoin fell below this level on January 12 and corrected shortly after. Clean recycling would signal a stronger trend resurgence and would be consistent with breakout structures for cups and handles.
On-chain data adds weight. Exchange inflows, which track tokens flowing into exchanges and often indicate selling intentions, have fallen to six-month lows. Daily inflows have dropped from approximately 78,600 BTC on November 21 to approximately 3,700 BTC currently, a drop of more than 95%.
This sharp decline suggests that selling pressure has dried up. The number of tokens being sent to exchanges decreases, reducing the supply available for selling on rallies.
