Bitcoin's Rally Faces Potential Hurdles Despite Recent Gains

Bitcoin has experienced a 1.9% increase over the past week, maintaining a steady upward trend since December 1, currently trading around $93,300. While the price has stabilized over the last 24 hours, the charts indicate a possible breakout could lead to a significant 15% rally.

Key Takeaways

Bitcoin has risen 1.9% recently and is close to $93,300.
The current upward trend shows signs of a breakout based on technical patterns.
Short-term holders have increased their supply, which may indicate a lack of stability for the rally.
Long-term holders have not shown significant buying activity, raising concerns about the rally's sustainability.
Critical price levels are established for confirming or negating the potential breakout.

Bitcoin Showing Signs of Breakout Potential

Bitcoin's price has experienced a decline since mid-November, creating pressure for a downward movement. However, since December 1, the price has been on the rise, indicating the development of a possible breakout pattern suggested by an emerging inverse head-and-shoulders formation on the 12-hour chart. This pattern typically emerges near market bottoms and strengthens the notion of a potential recovery.

For these breakout hopes to materialize, a clear 12-hour close above the neckline is essential.

![BTC Attempting Pattern Break: TradingView]

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The most significant confirmation comes from observing spot flows. The exchange net position change reflects whether coins are moving into exchanges for selling or exiting to be held. On November 27, net inflows of 3,947 BTC indicated selling pressure, but by December 3, this metric shifted to –18,721 BTC, suggesting considerable outflows.

![Buying Has Resumed: TradingView]

The notable shift of over 22,000 BTC favoring buyers signifies a sharp revival in demand during this price climb. However, this development marks just the beginning of the story, as further complexities remain.

Analyzing the Buyer Mix: Caution Ahead

Short-term holder supply rose from 2,622,228 BTC on November 30 to 2,663,533 BTC by December 3. Short-term holders are typically those who retain coins for mere weeks. They tend to buy quickly and sell just as fast.

The continuing increase of nearly 1.6% in their supply usually appears bullish, but it indicates that the bullish sentiment of the rally is being supported chiefly by the most reactive segment of the market. If Bitcoin’s price stagnates, short-term holders are typically the first to realize profits.

![Speculative Traders Enter: TradingView]

In contrast, long-term holders—the group that usually supports strong breakouts—have not actively participated. Their net position change, reflected by the HODLer net position change metric, has remained negative for fourteen consecutive days, currently sitting at –168,611 BTC.

![Long-Term BTC Holders: TradingView]

Without a shift toward net buying from long-term holders, any rally remains vulnerable to abrupt reversals instigated by speculative trading behaviors. This discrepancy highlights the reasons why Bitcoin is nearing a pivotal pattern break but still lacks the necessary support for a robust rally.

Key Bitcoin Price Levels for Confirmation

Currently, Bitcoin trades just below the neckline at $93,200. Achieving a 12-hour close above this level will affirm the inverse head-and-shoulders pattern, setting the next target levels at $96,600, $99,800, and $104,000.

If buyers can push confidently through these levels, the complete pattern extension could reach approximately $108,300, representing the anticipated 15% increase mentioned earlier.

Conversely, if Bitcoin drops below $90,400—a key support level where buyers have stepped in during previous dips—it could signal deeper testing near $84,300. Falling below $80,500 would invalidate the entire breakout structure.

![Bitcoin Price Analysis: TradingView]

Currently, Bitcoin is striving for a pattern break, buoyed by improving spot flows and rising speculative interest, along with cautious participation from long-term holders. The charts indicate potential for a 15% rally, but solidifying this requires a definitive breakout beyond $93,200.