Bitcoin's 12% Breakout Story Continues — But One Group Might Spoil the Ending

Bitcoin's price journey is still on track, although the upward movement isn't as smooth as hoped. The cryptocurrency has regained critical trend support, historical patterns suggest continuation, and short-term selling has diminished. However, each upward advance faces resistance due to ongoing selling from a specific group of holders, which may delay the next price surge.

Key Takeaways

Bitcoin has reclaimed significant trend support, showing potential for continued growth.
The cryptocurrency is forming a cup-and-handle pattern on the daily chart, signaling bullish behavior.
Short-term selling pressure has significantly decreased, with recent buyers holding their positions.
Long-term holders are actively buying, but ultra-long-term holders continue to sell, introducing some caution.
A clean daily close above $92,400 is necessary for Bitcoin to reach the next target of $94,870 and eventually $106,630.

Bitcoin's price has recently broken through key resistance levels, hinting at a potential upward trend. While short-term sellers appear to have retreated, ongoing selling from ultra-long-term holders continues to exert pressure. The cryptocurrency must maintain critical support levels to capitalize on this momentum.

Breakout Structure Remains Intact

Bitcoin is currently trading within a cup-and-handle pattern on its daily chart. The price briefly approached the breakout point near $92,400 before retreating. However, this pattern remains valid as long as essential support levels are maintained.

A crucial support indicator is the 20-day exponential moving average (EMA), which gives more importance to recent price data and helps define short-term trends. Bitcoin reclaimed the 20-day EMA on January 10 and was met with two consecutive green daily candles, confirming this trend's significance.

In December, Bitcoin successfully reclaimed the 20-day EMA around December 3 and December 9, but those efforts faltered as the following candles turned red. Conversely, on January 1, the reclaim was followed by another green candle, leading to nearly a 7% rally.

A similar situation is forming again. As long as Bitcoin stays above the 20-day EMA, the breakout theory remains intact. However, the long upper wicks near $92,400 indicate that selling pressure persists. This leads to the crucial question: who is still selling?

Short and Long-Term Holders Are Quiet, Ultra-Long Holders Are Not

On-chain data helps clarify the selling activity.

Short-term selling pressure has decreased dramatically. The Spent Coins Age Band data for coins held for 7 to 30 days shows a steep decline in selling, plummeting from around 24,800 BTC to just 1,328 BTC, marking a 95% drop since January 8. This implies that recent buyers are holding onto their assets instead of selling into the market bounce.

Additionally, the net position of standard holders turned positive on December 26. These long-term investors, who typically hold for 155 days or more, have been net buyers since that date, continuing to purchase even as Bitcoin hit its peak on January 5.

However, selling pressure is primarily attributed to another group.

The net position change for long-term holders, particularly those who have held their coins for over a year, remains negative. On January 1, this group sold roughly 286,700 BTC, and by January 11, the selling slowed to about 109,200 BTC, representing a drop of over 60%. While selling pressure is easing, it has not transitioned into buying yet.

This explains the current hesitation near resistance levels. Short-term sellers have exited the market, long-term investors are in accumulation mode, but ultra-long holders are still offloading enough supply to create resistance for Bitcoin's price.

Critical Bitcoin Price Levels to Watch

Bitcoin requires a decisive daily close above $92,400 to clear the way toward $94,870. Successfully breaking through this zone would complete the breakout narrative and trigger a projected 12% upside target, aiming for the $106,630 area.

To achieve this, Bitcoin must remain above the 20-day EMA and curb selling from ultra-long holders to prevent driving the price lower.

On the downside, $89,230 is a crucial support level. A daily close below this mark could weaken the breakout structure. If Bitcoin drops to around $84,330, it would invalidate the bullish setup entirely.

For now, Bitcoin's breakout story remains on course. The key factor that needs to change is the selling behavior of the oldest holders. Once that group ceases selling, the delayed breakout could take off rapidly.