Bitcoin price is sitting at a decision point after a quiet pullback. After peaking on January 5, BTC has slipped but avoided any major breakdown. Year-to-date, Bitcoin remains down about 4.5%, maintaining a slightly negative annual performance.
That little red number is more important than it seems. A narrow price window now separates Bitcoin from a rare historic high that was last seen in 2020. Whether Bitcoin flips or fails can determine the next trend.
A recent historical analysis highlighted a rare setup. When Bitcoin’s 1-year price change turns negative and then turns positive, it often marks major trend changes. This rare move occurred in July 2020, followed by a strong bull phase.
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Right now, Bitcoin is hovering below that flipping point. A move of about 4.5% turns the annual change in the green and repeats that historical situation.
The chart structure supports why this is important. Bitcoin is trading within the handle of the cup and handle pattern, a bullish formation where the price stops after a round recovery before attempting a breakout.
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It would be interesting to see if the measured breakout distance (above the neckline) of this pattern closely aligns with the same 4-5% area?
Short-term trend behavior is strengthening the bullish case.
Exponential Moving Average (EMA) gives more weight to recent prices and helps track short-term trend direction. Bitcoin has recently reclaimed its 20-day EMA and is holding above it. The last time BTC regained this level was in early January, with the price rising nearly 7% intraday.
After missing the 20-day EMA in mid-December, it fell 6.6%, showing how reactive the price has been around this level. For now, holding it up leaves the reverse motion intact.
Another barrier is the 50-day EMA. Bitcoin lost this level on January 12 and corrected shortly after. A clean retracement indicates a strong trend recovery and aligns with the cup and handle breakout structure.
On-chain data adds weight. Exchange inflows, which track coins moving on exchanges and often indicate selling intentions, fell to a six-month low. The daily flow has dropped from around 78,600 BTC to 3,700 BTC on November 21, a drop of more than 95%.
This sharp decline indicates that sales pressure has dried up. Fewer coins are being shipped to exchanges, reducing the supply available to sell during rallies.
