Bitcoin's January: A Key Moment for Consolidation

As Bitcoin navigates its trading landscape, the month of January is expected to represent a crucial consolidation phase. During these moments, traders may struggle with patience, but this can also reveal opportunities for those who adhere to disciplined investment strategies.

Key Takeaways:

Bitcoin appears to be in a vital consolidation phase this January, which may signal a local bottom.
Technical indicators show Bitcoin nearing an optimal DCA zone, indicating potential long-term growth opportunities.
Low network growth and diminished whale selling pressure suggest a favorable landscape for recovery.

In examining January, several indicators hint that Bitcoin might be poised for critical consolidation ahead of a recovery.

Signals Indicating a Potential Local Bottom for Bitcoin

Analysts have identified three main signals based on technical analysis, on-chain data, and exchange statistics that point towards a potential long-term recovery for Bitcoin.

1. Technical Indicators Suggest an Optimal DCA Zone

Recent technical analysis shows Bitcoin nearing an ideal Dollar Cost Averaging (DCA) zone based on various moving averages (MA). The on-chain analytics platform Alphractal states that suitable long-term accumulation zones appear when the Bitcoin price drops below all daily moving averages, from the 7-day to the 720-day mark. This scenario creates a "safe zone" where the price is generally regarded as undervalued compared to long-term trends.

Currently, Bitcoin has dipped below most of these averages since November, with only the MA720 still in place, hovering around the $86,000 mark. Alphractal notes, "Bitcoin is nearing one of the most favorable zones for implementing a DCA strategy. Historically, these areas have been great for long-term accumulation, but BTC needs to fall below $86,000 for this to take shape."

While Bitcoin dropping beneath $86,000 may not instantaneously indicate a bottom, historical patterns imply that the phase of Bitcoin traversing from the MA7 to MA720 could span several months.

2. On-Chain Data Indicates Low Network Growth

The second signal comes from on-chain data, which reveals that Bitcoin's network growth has reached its lowest point in years. Though this might seem unfavorable, previous patterns demonstrate that such conditions often precede a recovery phase.

Swissblock, a market intelligence firm, states that with diminished network activity and low liquidity, Bitcoin may currently be in an accumulation or consolidation phase before making its next significant move. "Network growth has hit lows unseen since 2022, while liquidity continues to drain. Back in 2022, similar network conditions led to a BTC consolidation phase as network growth began recovering, despite liquidity remaining weak," reported Swissblock.

However, Swissblock emphasizes the necessity of signs indicating renewed adoption. If this hypothesis proves accurate, a rally akin to 2022 could propel Bitcoin to a new all-time high this year.

3. Reduced Whale Selling Pressure

The third indicator comes from analysis of exchange data, which shows that selling pressure from significant investors, or "whales," has notably decreased over the past month. This alteration contributes to a more favorable environment for price stabilization and potential recovery.

Data from CryptoQuant illustrates that Bitcoin flow from whales to exchanges has drastically diminished, especially on Binance. Specifically, large transaction inflows (ranging from 100 to over 10,000 BTC) have plummeted from nearly $8 billion monthly in late November 2025 to around $2.74 billion today. This shift in behavior is vital as it decreases sell-side supply, which can help maintain price stability while enhancing recovery prospects.

The synthesis of technical signals (price trading below vital moving averages), on-chain data (sluggish network growth), and exchange metrics (diminished whale selling) indicates that Bitcoin is likely entering a prime consolidation phase to carve out a local bottom.

Nonetheless, this data alone does not provide a precise bottom price. Moreover, there are several external uncertainties yet to be considered, such as the potential return of tariff pressures in light of geopolitical tensions and the ramifications of an imminent change in Federal Reserve leadership.