Bitcoin (BTC) is attempting to shift into a phase of strength after experiencing weeks of fluctuations between $90,000 and $86,000. While the technical structure has shown improvement, BTC traders are engaged in a debate regarding whether the move has momentum or risks becoming a bull trap.
Key Takeaways and Market Analysis
A key Bitcoin indicator has clearly turned higher as BTC reclaimed a position above $90,000. Momentum and channel positioning favor a continuation, but the risk of near-term overbought remains high. On-chain accumulation continues to absorb supply, while traders disagree on whether $100,000 represents expansion or exhaustion.
The structural shift indicator, which consists of channel position, moving average trend, and directional movement, has undergone a decisive reversal, according to Bitcoin researcher Axel Adler Jr. At the end of December, the signal remained below -0.3, consistent with bearish pressure.
This changed on Friday when the indicator crossed the 0 mark and rose to +0.73 by Sunday. During the same period, BTC rose from around $87,500 to $91,400, confirming a transition to a positive regime. Adler Jr. noted: “Structural indicators signal a synchronized transition from a period of weakness to a period of strength.”
Market Dynamics and On-Chain Analysis
Historically, the rise of the indicator above +0.5 corresponds to an uptrend. The crucial test now is whether the indicator can stay above 0 while the price challenges the resistance at $96,000. A failure back below zero would increase the risk of a false breakout or bull trap.
The dynamics and positioning of the on-chain channel support this view. Momentum has stabilized in the 0.85 to 0.89 range, suggesting returns are well above the three-month average of 0.5 without reaching extreme levels.
At the same time, the channel position has reached 0.99, placing BTC near the three-week high above $92,000, with area support near $85,000. While this setup favors a breakout, the proximity to the range cap also increases the likelihood of a short-term pullback before a continuation.
Accumulation and Trader Sentiment
Data from CryptoQuant continues to show steady supply uptake. Bitcoin balances held by growing address cohorts have reached a new all-time high of 2.28 million BTC ($211 billion at the time of writing), continuing a trend that will accelerate through 2024-2025.
Retail accumulation is increasing more slowly, indicating growing participation with no signs of late-cycle euphoria, while systematic accumulation patterns remain intact. Against this backdrop, BTC traders remain divided. Plan C, the creator of the Bitcoin Quantile Model, argued that BTC is no longer in a downtrend, pointing to nearly six weeks of sideways trading within a clear channel that resembles accumulation.
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