The price action of Bitcoin over the past 45 days has uncovered a trend of great importance between $94,000 and $101,000, where they tell us that a whole bunch of Bitcoin has been traded. Up until now, the volume profile for the price action tells us that a “supply cluster” has formed right around $98,000. That is to say, $98,000 is the “pivotal” price here; if this has any kind of significant volume support as we head downward, then this zone should provide that support. If we bounce here in the next short while, then the zone still makes sense as $98,000 being our next price range. If Bitcoin keeps on solidifying within or above this range, then it boosts the likelihood that $98,000 will serve as an important cornerstone for future price shifts. “Consolidation” is a word used often in charting and technical analysis. When a price consolidates, it means that the traders and investors currently in that market are not moving the price in either direction. When a price moves sideways for a long time, that reinforces the support-resistance dynamic around that price level. Bitcoin’s Market Cycle Resembles 2015–2018 Era Bitcoin’s larger market cycle evokes comparisons to 2015-2018. The present cycle shows many of the same traits as that previous era, with an increase in large spot market purchases for Bitcoin and a concomitant price appreciation. Meanwhile, leverage ratios in the Bitcoin ecosystem have been decreasing, indicating that there is less edge money at work in the system. This situation has made for a more stable price construction with next to no drawdowns, while at the same time, Bitcoin’s market cap has been increasing. Following the implosion of FTX, Bitcoin’s pullbacks have been relatively muted and mild. They’ve rarely exceeded 25%, and when you compare that to other assets and equities, that’s not much of a sell-off at all. Why is Bitcoin so resilient? Strong and perhaps even surging demand, an ever-increasing amount of participation from institutions, and the seemingly unstoppable “adoption by everyone else” kind of thing that we like to call “the Bitcoin narrative.” Bitcoin’s current cycle mirrors the 2015–2018 era -primarily spot-driven, with similar drawdown patterns since the FTX low. Despite a much larger market cap, pullbacks have rarely exceeded -25%, reflecting strong demand, ETF inflows, and Bitcoin’s role as a macro asset:… pic.twitter.com/v9k5BVPZJS — glassnode (@glassnode) January 31, 2025 One key pattern seen in past Bitcoin cycles is that price action accelerates into a euphoric phase as new demand flows into the market. While it’s possible that we could see another explosive rally, it’s vital to pump the brakes a bit on our expectations since a 100x surge from the lows—like what we saw in Bitcoin’s 2015 bull run—seems quite unlikely given how big the asset has gotten. Still, with mounting interest across the board, Bitcoin’s price could see sky-high increases in the next few months. Spot ETF Inflows Reinforce Bitcoin’s Strength Capital flowing into spot Bitcoin ETFs is one of the most significant factors propping up Bitcoin’s current market structure. As of January 30, net inflows into Bitcoin ETFs hit a total of $588 million, which investors seem to be channeling into these vehicles (for whatever reason) because they now approximate the only way to invest in Bitcoin at scale. The iShares Bitcoin Trust (IBIT) led the way with a net inflow of $321 million. Fidelity’s Bitcoin ETF (FBTC) came in next with an inflow of $209 million. These two funds now place nearly half a billion dollars in fresh capital directly into the Bitcoin markets. They also offer a clear signal that institutional investors have, over the past year, increasingly turned to Bitcoin not just as a speculative vehicle but as a serious investment opportunity. Since the authorization of spot Bitcoin ETFs in the United States, these investment vehicles have seen an influx of billions in dollars, solidifying Bitcoin’s standing among mainstream investors. This cycle of Bitcoin price appreciation is unlike anything seen before because the current narrative revolves around the authorization of a spot Bitcoin ETF in the U.S. and what that means for the tremendous market interest and potential Bitcoin investment vehicles represent. Bitcoin’s Next Move: Key Levels to Watch With Bitcoin staying in the $94,000-$101,000 bracket, it’s of paramount importance for the virtual currency to maintain the $98,000 level; otherwise, it could be in for a series of short-term corrections. On the other hand, if Bitcoin consolidates above that level for a while, it could easily serve as a launchpad for further price increases. Historical cycles show that when demand for Bitcoin surges, so does the price. By this historical logic, the market is on the verge of entering another bullish phase. However, traders should remain cautious; all-time high resistance levels could lead to increased volatility. Over the last 45 days, a high volume of $BTC has exchanged hands in the $94K – $101K range, forming a dense supply cluster near $98K: https://t.co/sdnq8DQcyy Why it matters: The longer the price consolidates within or above this range, the stronger this area will act as… pic.twitter.com/OSQif6DvWp — glassnode (@glassnode) January 31, 2025 The inflow of growing ETFs, the super demand for Bitcoin at key levels, and its semblance to past market cycles suggest that the asset is in a critical phase. We are at the $98,000 pivot. Whether we convert from here or are rejected back down into the 80s, the next move will inform the next few months’ worth of movements and trades in the space. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news ! Image Source: sinenkiy/ 123RF // Image Effects by Colorcinch
