Bitcoin might pull back or move sideways for months

Market analysts believe Bitcoin could continue with its price consolidation phase in the coming months. However, the coin has the potential of moving downwards. BTC has been trading above the $100,000 mark since Monday, following the Inauguration of President Donald Trump.

Since November 2024, the crypto market has hit all-time highs following Trump’s pick for POTUS. The crypto market and its volatility have stood the test of time and now set to maintain market momentum. 

In a January 22 X post, Ju explained that Bitcoin might experience a pullback or move sideways for months. According to the CryptoQuant CEO, the coin’s bull cycle may not be over, as other on-chain indicators remain bullish, but investors that leveraged the coin should be on the lookout. 

The signal is the MACD of the PnL Index. The 365d MA for the signal looks like this. It is currently passing through an inflection point. pic.twitter.com/vB0Y2ZCLkt

— Ki Young Ju (@ki_young_ju) January 22, 2025

Leveraged trading has the potential to birth substantial profits, but experts discourage it when volatile markets are involved. Market volatility births panic-driven buying or selling, heightening the possibility of liquidations. Then, exchanges forcefully close a trader’s leveraged position due to insufficient margin, causing massive losses for traders.

CryptoQuant: Bitcoin bull cycle uncertain

Ju’s analysis showcased the PnL Index chart, a composite metric at CryptoQuant that combines several on-chain indicators, like the Market Value to Realized Value Ratio (MVRV), to gauge Bitcoin’s market health. 

The 365-day Moving Average (MA) of the index is currently at an inflection point. According to Ju, this presents a point where the trend is most likely to change. However, it is unclear whether it will move sideways or ignite a downtrend.

Per CryptoQuant contributor Darkfost, Bitcoin faced significant selling pressure after US President Donald Trump’s inauguration ceremony on January 20. They pointed out that the absence of any mention of crypto or Bitcoin during his speech led to a wave of pessimism among investors.

Within hours, the net taker volume on Binance turned highly negative. This shift pointed to a short-term bearish sentiment as traders offloaded their positions.

However, just before the US market opened on January 21, Binance’s net taker volume flipped back to positive, and buying pressure was once again dominating, fueled by heightened market optimism. 

Market watchers now hope that BTC could potentially challenge its all-time high in the near term if this trend persists.

Analysts: Bitcoin’s long-term technical patterns are bullish

According to market analysis from Investtech, Bitcoin is currently trading within a horizontal trend channel in the short term, and it may continue to move within this range in the coming days.

Market data from TradingView shows there’s a lack of a defined resistance in the price chart, which makes the chances for price volatility towards the downside high.

On the other hand, Bitcoin’s Relative Strength Index (RSI) above 70 indicates strong positive momentum. This shows that there’s a growth in investor optimism, with steady demand suggesting that prices may continue to rise.

With the price objective of $100,000 now met, analysts believe further upward movement is more likely in the first half of 2025.

Exchange netflows signal accumulation phase

Bitcoin’s recent movement past the $100,000 mark has fueled optimism among investors. This sentiment is reflected in the Bitcoin exchange netflow metric, which measures the net amount of BTC deposited to or withdrawn from exchanges.

Over the past few months, the 30-day moving average of this metric has consistently shown negative values, and it seems investors are making aggregate withdrawals from exchanges, with bullish expectations for the crypto on the high.

A constant spree of withdrawals over time can create a supply shock, reducing the availability of Bitcoin on exchanges and potentially driving prices higher. If the current trend continues, traders are optimistic that BTC could witness a phase of upward price momentum come the end of January.

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