Bitcoin (BTC) entered the new year in a narrow price range, maintaining its horizontal course in the range of $ 85,000 and $ 90,000. While this outlook indicates that there is a clear balance of power between buyers and sellers in the market, it also shows that a clear decision on the direction has not been made yet. However, on-chain data and technical indicators produce important signals that this stagnation may herald a recovery process. The recent decreasing selling pressure and the change in investor behavior reveal that Bitcoin is at a critical threshold.
Selling Pressure Weakens, Accumulation Period Strengthens
Although the Sharpe Ratio turning negative on the Bitcoin chart indicates that risk-adjusted returns have weakened at first glance, this situation is not always interpreted negatively in crypto markets. On the contrary, given Bitcoin’s historical volatility, negative Sharpe Ratio has often coincided with periods of accumulation in the past. The fact that the BTC price moved in a narrow band between $ 87,550 and $ 90,900 in the last 24-hour transactions shows that uncertainty continues. Despite this, the liquidation of a $31 million Bitcoin contract reveals increased sensitivity in leveraged transactions.
On-chain data paints a similar picture. It seems that the selling trend of long-term investors has slowed down significantly. The fact that the Long-Term Holder Distribution Pressure Index is at -1,623 and only 221 BTC has been spent in the last 24 hours shows that the amount of new sales entering the market is limited. Historically, these levels coincide with periods when investors preferred accumulation over panic. This situation creates a basis for short position liquidations to increase if the price reacts upwards.
Bottom Signals and Market Domination Attract Attention
MVRV-Z score, another important indicator for Bitcoin, is close to historical bottoms according to the two-year average. This metric measures whether the market value is over or under the realized value. Current levels are similar to areas where recovery began in past cycles. At the same time, the decrease in Bitcoin reserves on exchanges to approximately 2.5 million BTC shows that the supply ready for instant sale has decreased. This indicates that selling pressure may weaken further over time.
On the other hand, Bitcoin maintains its dominance in the overall crypto market. While the total market value is approximately 3.03 trillion dollars, BTC’s share is in the range of 58-60 percent. This chart shows that investors prefer to stay in Bitcoin over altcoins. As a matter of fact, in the spot Bitcoin ETF data recently announced in the USA, news that there were more stable inflows into Bitcoin ETFs compared to altcoin-based products attracted attention. This development supports that institutional interest is still mainly focused on Bitcoin.
As a general assessment, although Bitcoin does not yet seem to have gained the momentum necessary for a strong rise in the short term, current data shows that downside risks remain limited. The decrease in selling pressure, the patient stance of long-term investors and the decrease in stock market reserves suggest that the price is trying to establish a solid base. However, unless there is a general expansion in market value, this accumulation process seems likely to spread over time.
