Bitcoin Approaches Potential Turnaround – Here’s What You Need to Know

Summary: Bitcoin’s price has experienced a correction following the FOMC rate cut, with a decline of about 13% in the past 30 days and nearly 4% over the last week. However, two significant indicators now suggest that the correction may soon come to an end, provided Bitcoin can muster the necessary upward push.

Key Takeaways

Bitcoin has experienced a notable price correction, dropping 13% in 30 days and nearly 4% in the last week.
Two on-chain indicators suggest that Bitcoin may be nearing a turnaround.
Short-term holders are facing significant losses, typically seen in late-stage corrections.
Heavy selling from short-term holders could indicate a completion of the correction phase.
The Bitcoin price needs to rise approximately 4% to confirm a breakout from its current price setup.

Signs Indicating a Possible Change in Bitcoin’s Price Trend

Bitcoin has been undergoing a correction following the FOMC rate cut. Currently, the coin is down by roughly 13% over the last month and about 4% over the past week. Nonetheless, recent data reveals two important patterns that suggest the correction phase may be nearing its end if Bitcoin can achieve the necessary upward momentum.

Indicators Pointing Towards a Shift

Recent data from CryptoQuant shows clear signs of short-term capitulation among Bitcoin holders. Their realized profit-and-loss figures reveal many are facing steep losses—a common occurrence near the end of a correction, as panic selling often signifies late-stage exhaustion.

According to @IT_Tech_PL, “Structurally, these deep loss pockets usually show up closer to the late stages of a correction than the early ones.”

HODL Waves, which assess the age distribution of Bitcoin held by various groups, further supports this observation. In late November, holders of Bitcoin aged one day to one week controlled 6.2% of the supply. By December 10, that figure plummeted to just 2%, marking a steep 68% decline. This sharp drop indicates significant short-term selling, typically seen towards the end of a correction, which can also lead to the exit of speculative funds from the asset.

Net Position Change Signals Buying Momentum

Another crucial indicator is the Exchange Net Position Change that tracks the daily inflow and outflow of Bitcoins on exchanges. On November 27, Bitcoin saw net inflows of 5,103 BTC. However, by December 10, that trend shifted dramatically to net outflows of 43,292 BTC—a change of over 8.4 times.

This pattern mirrors a similar shift that occurred between September 17 and 25, after which Bitcoin surged to its all-time high above $126,000, as reported by CoinGecko.

Currently, this combination of short-term capitulation and significant outflows presents one of the clearest trend-shift setups seen throughout this correction phase.

What’s Next for Bitcoin’s Price?

For the suggestions of a turnaround to be validated, the Bitcoin price needs to reflect those signals. At present, Bitcoin is trading within a symmetrical triangle on the daily chart. This triangle indicates a balance between buyers and sellers. Each side has only two contact points, resulting in weaker trend lines. A small move could easily disrupt the balance.

Bitcoin needs to close trading above $94,140—around a 4% increase from current levels—to signal a breakout. This price point serves as a critical horizontal resistance level and aligns with the upper boundary of the triangle. A decisive breakout here could propel Bitcoin towards $97,320 and eventually $101,850.

Conversely, if Bitcoin closes below $90,180, the bullish outlook weakens. Should it drop further, the next significant support level is $87,010, followed by $80,640, which could undermine the broader positive sentiment.

Presently, the trading setup appears neutral but is showing signs of improvement. With short-term capitulation and notable outflows, Bitcoin has an opportunity to conclude its correction—if it achieves that pivotal 4% breakout.