Bitcoin's price is at a crossroads after a quiet pullback. Since the peak on January 5th, BTC has slightly declined, but there has been no major downward breakout. Year-on-year, Bitcoin is now approximately 4.5% lower, thus achieving a slightly negative annual result.
That small red number is more important than it seems. A narrow corridor now separates Bitcoin from a rare historical signal that last appeared in 2020. Whether Bitcoin breaks through this boundary or not could determine the next trend.
A 4.5% Bitcoin price movement could repeat the rare 2020 pattern
A recent historical analysis pointed to a unique situation. When Bitcoin's 1-year price change turns negative and then positive again, it often signals major trend reversals. This rare pattern was seen in July 2020, followed by a strong bull phase.
Currently, Bitcoin is hovering just below that turning point. A rise of approximately 4.5% would turn the annual change positive again, thereby repeating the same historical condition.
The chart structure explains why this is important. Bitcoin is trading within the handle of a cup-and-handle pattern, a bullish formation where the price pauses briefly after a rounded recovery, potentially setting up for a breakout.
Want more insights like this on tokens? Sign up for the Daily Crypto Newsletter by editor-in-chief Harsh Notariya here.
It's interesting to see whether the measured breakout distance of this pattern (above the neckline) comes close to that same 4–5% zone?
EMA support and 95% drop in selling pressure strengthen the setup
Short-term trend behavior supports the bullish scenario.
An exponential moving average (EMA) gives more weight to recent prices and helps track the short-term trend. Bitcoin has recently reclaimed its 20-day EMA and continues trading above it. The last time BTC regained this level at the beginning of January, the price rose nearly 7% within a few days.
The loss of the 20-day EMA in December led precisely to a 6.6% drop, showing how sensitive the price is around this level. As long as Bitcoin remains above it, the upward momentum remains intact.
The next resistance is the 50-day EMA. Bitcoin lost this level on January 12 and subsequently dropped. A convincing recovery would signal stronger price recovery and align with the cup-and-handle breakout pattern.
On-chain data also supports this picture. Exchange inflows, which indicate how many coins are moving to exchanges (often for selling), have declined to their lowest level in six months. Daily inflows dropped from around 78,600 BTC on November 21 to about 3,700 BTC now—a decline of over 95%.
This sharp decline suggests that selling pressure has disappeared. Fewer coins are being sent to exchanges, meaning less supply available for sale during rallies.
Derivatives pressure and key Bitcoin price levels determine the next move
The leveraged position adds a new layer.
The next seven days feature cumulative short liquidation leverage around $4.10 billion, while long liquidation is around $2.17 billion. Short positions are therefore roughly 89% larger than long positions.
Pressure on short positions provides fuel. If the BTC price moves upward, forced short covering could automatically generate additional buying pressure. Bitcoin has regularly moved against leveraged expectations over the past year. Therefore, this skewed distribution is notable, not directly bearish.
All of this comes together at clear price zones.
A daily close above $94,880 would confirm the cup-and-handle breakout and align with the annual flip of 4.5%. Afterward, the upside targets would be around $99,810, followed by $106,340 based on Fibonacci extensions and the cup-and-handle breakout projection.
At the bottom, $89,230 is the first major support level. If that level is lost, $86,650 becomes exposed, invalidating the bullish structure.
Currently, the Bitcoin price is moving within a narrow range.
Selling pressure is at its lowest in six months, short-term trend support holds, and a rare historical signal is just 4.5% away. Whether Bitcoin reaches that level could be decisive for what happens next.
