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After a brief drop to $98,000 over the weekend, Bitcoin ($BTC) has recovered and is now trading above $101,000 at the time of writing. While concerns about a potential double top persist, on-chain data has yet to show any major warning signs.
Bitcoin Undergoing Healthy Consolidation
According to a recent CryptoQuant Quicktake post by contributor Avocado_onchain, despite broader market sentiment turning bearish, $BTC has not yet displayed any significant red flags. In fact, the cryptocurrency still appears to be in a consolidation phase.
Notably, the 30-day moving average (MA) of Binary Coin Days Destroyed (CDD) indicates that long-term holders are continuing to hold onto their $BTC rather than selling. This suggests that investors remain optimistic about Bitcoin’s potential for further upside in the near term.
For the uninitiated, the 30-day MA Binary CDD smooths out daily fluctuations to show how frequently long-term Bitcoin holders are moving their coins over a month. A lower value suggests strong holding behavior and accumulation, while a higher value may indicate distribution or selling pressure from experienced holders.
The analyst noted in a previous analysis that when Bitcoin’s Binary CDD exceeded 0.8, it was typically followed by a steep correction. However, this time, the indicator has peaked around 0.6 and is now on the decline – suggesting the market is far from overheating. They added:
Although the data may not align perfectly from cycle to cycle, this moderation below 0.8 still implies the market may be entering a consolidation period, and further price or time correction could follow.
The analyst emphasized that this indicator does not signal the end of the bull run. Rather – similar to the previous two market phases – Bitcoin could be following a “staircase-like movement,” where periods of consolidation are followed by a strong upward leg.
They concluded that $BTC historically tends to rally when market attention fades and sentiment remains quiet. Therefore, the current period of low volatility could be a precursor to Bitcoin’s next major move to the upside.
Are $BTC Bears In Trouble?
While the current bearish sentiment may have raised hopes for further price pullback for the largest cryptocurrency by reported market cap, both technical and on-chain indicators suggest otherwise.
For example, short positions have been rising sharply within the $100,000–$110,000 range, increasing the likelihood of a short squeeze – which could drive $BTC to a new all-time high (ATH).
That said, some caution is warranted, as short-term holders have been selling during recent dips, showing a lack of confidence in Bitcoin’s ability to sustain its upward trajectory. At press time, $BTC trades at $101,954, up 1.1% in the past 24 hours.
