Bitcoin’s January Blues – Is it a Post-Halving tradition now?

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  • January has been a bearish month the year after the halving
  • The $180k expectations later this cycle are in the realm of being realistically possible

Over the last two months, Bitcoin [BTC] has faced some challenges, which is not unusual in its volatile nature. The psychological barrier of $100k was tough to surmount. Despite appearances that the bulls had finally turned it into support, the bears managed to push the price downward.

Based on a post from X (previously known as Twitter), it’s typical for Bitcoin’s decline in January following the halving to follow a certain pattern. If this trend continues, we might expect Bitcoin prices to hover around $130,000 by March.

Beyond historical price trends, the movement of Bitcoin (BTC) in and out of centralized trading platforms can provide significant insights into market behavior. Lately, short-term investors have shown signs of distributing their holdings, but this selling pressure might soon diminish. This decrease in selling pressure could potentially boost the chances of an uptrend for BTC on price charts.

Price action, exchange netflow trends show bullishness ahead for Bitcoin

Over the past month, the average daily inflow of Bitcoins into exchanges has been significantly decreasing since it peaked around early December. This decline has brought the 30-day moving average back to levels last seen in October and June 2024.

During June, Bitcoin was close to its local lows around $60,000 as it formed a descending channel. However, in October, it managed to break free from this channel. Despite this, the $70,000 barrier continued to hold it back. The decrease in inflows, with Bitcoin consolidating below $100,000, was, consequently, an extremely optimistic sign for bulls.

The gap between incoming and outgoing amounts (netflows) has been steadily decreasing, or moving downward. Moreover, for the past few months, especially from March 2024, this difference has generally been negative. However, there was a brief spell in the second week of May where it showed positive growth.

As a researcher analyzing financial data, I’ve noticed an unusual trend in the recent months compared to historical cycles: a prolonged period of negative net inflows (or outflows), which hasn’t been observed before. In 2020, there were negative net inflows from late August until the final week of November. However, the current eleven-month flow surpasses the previous three-month outflows from that timeframe by a considerable margin.

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Therefore, it seems quite plausible that the enthusiasm for Bitcoin is significantly greater now compared to previous times.

It’s unlikely that this strategy would result in the same level of price surges, but it appears reasonable to assume that long-term investors would react less dramatically and panic fewer times during significant market drops. This reduced panic could help minimize market volatility and the severe declines often associated with a Bitcoin bull market.

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2025-01-13 23:03