Recent Bitcoin (BTC USD) trading patterns suggest potential scenarios of either accumulation or redistribution, key concepts derived from the Wyckoff method that clearly affect market outlook.
Bitcoin price hit a high near $98,647, marking a significant resistance zone. After the peak, a phase of consolidation followed.
The same is evidenced by frequent tests of support around $94,000, illustrating potential accumulation behavior that usually indicates bullish sentiment.
This phase is characterized by the ‘Spring’ and ‘Test’ phases in the Wyckoff scheme, where Bitcoin prices stabilize after falling.
Conversely, the redistribution scheme in the Wyckoff method, which contains a series of lower highs at $98,000, has increased the possibility of a bearish outcome.
This scenario could lead to a ‘Mark Down’ phase if the pattern repeats, indicating that sellers are outnumbering buyers, leading to potential downsides.
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Bitcoin’s immediate future in the first quarter of 2025 hinged on its ability to hold support above the $94,000 level or face resistance near $98,647.
Bitcoin (BTC USD) short term SOPR value
Further analysis revealed an interaction between long-term holders (LTH) and short-term holders (STH), particularly visible through three different figures.
Initially, the transfer of Bitcoin supply from LTH to STH, a pattern often associated with the tops of market cycles, is key to determining future price movements.
Demand for STH continued to lift the price of Bitcoin, indicating strong support despite the LTH selloff.
A detailed analysis of realized prices for STH over different periods revealed key thresholds that currently act as support and resistance levels.
Notable among these are realized prices of $41,000 in general, extending up to $85,000 for shorter terms and dropping down to $60,000 for longer periods.
Further insights from the STH SOPR ratio at 1, showed that selling Bitcoin (BTC USD) at current prices was unprofitable for STH, coupled with a lack of incentive to sell, potentially stabilizing the market.
However, the decline in SOPR after the recent rally points to a market that may not yet be ready for a bullish resurgence.
Instead, it suggests there could be a consolidation or minor correction, urging cautious optimism for the near-term market outlook.
Continuous interplay of supply dynamics between LTH and STH. This highlighted the balance of power within the Bitcoin market, possibly setting the stage for the next significant price move.
Coinbase Premium Index
The Coinbase Premium Index, a key indicator of US consumer sentiment, broke above its 14-day simple moving average (SMA14) for the first time in 26 days on January 3.
This event marked a potential shift in BTC market dynamics, with buyers potentially regaining market dominance in the US
Historically, the growth of this index has been a precursor to bullish trends.
On November 1, 2024, a similar phenomenon was observed, preceding a significant rally where Bitcoin (BTC USD) jumped from $69,000 to a new ATH of $108,000.
This past performance suggests that when the index crosses above the SMA14, it may indicate a strong buying presence in the market, leading to a recovery.
A continued positioning of the Coinbase Premium Index above the SMA14 could suggest that this bullish trend could continue for Bitcoin (BTC USD).
If this pattern holds, it could mean that US-based buyers have influenced the price of Bitcoin, possibly driving it higher.
The current trend above the SMA14 highlighted a potential opportunity for those looking to take advantage of the momentum driven by US buyers.
Following the index will be essential for those who want to understand the undercurrents of buyer and seller activity on Coinbase.
