As Bitcoin starts to look for direction as we quickly approach the month of June I thought it would be a good opportunity to take a look at the comparison between the month of January and today in terms of Bitcoin's on-chain and technicals.
The reason I would like to compare both these periods of time is that January was a make-or-break month for Bitcoin as it embarked on a huge price rally and Bitcoin is now showing some similarities to January in terms of on-chain developments.
Notably, the debt ceiling debacle does present an opportunity for Bitcoin to rally, as does the expected next round of expected bank failures.
Bears could make a rightful case that more Fed rate hikes are coming and a draining of market liquidity could zap the crypto market.
Still, as you are about to find out some red flags are showing up on-chain that a major price move is nearing.
Starting with Dormant Coin Circulation, check out the very comparable spike in 180-day and 2 year time frames compared to January. The movements are extremely similar.
Then we come to MRVR ratios. The Classic on-chain overbought or oversold metric.
As you can see 90-day holders are almost exactly the same amount in the red as they were in January. 30-day BTC holders are slightly worse off than they were in January.
Notably, large spikes in BTC Token Age Consumed also took place in January. Recent spikes this week compare very well in terms of size and timing.
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Then we come to Volume. The trading volume is spookily similar to January in terms of a major low forming prior to Bitcoin's ascent higher in January.
Should we see a big uptick in Volume it would probably be a very bullish sign for Bitcoin.
Daily Active Address activity is really a no-brainer for me. As I have been mentioning in my daily commentary the positive flows we saw in January and even March are sorely missing and must return.
JP Morgan has put out a call for $45,000 BTC this year. We must see a large amount of positive price flows return to drive a sustainable rally if they stand any chance of being correct.
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Whale and Retail holding data is a bit more mixed. Whale holdings compared to now and January is roughly the same. The big difference here is retail holders are completely stacked in terms of BTC compared to January.
One could really question if Bitcoin can rally any further without substantial whale or institutional money entering the market seeing just how stacked retail is on BTC right now.
In summary, many of the on-chain metrics I have shared today are showing very strong similarities to January. Now we just need some big green flows to return.
Technically, I see no obvious advantage in comparing where BTC was in January and where it is trading currently. This is far too generic and irrelevant information. Gold and Bitcoin could be about to separate in terms of the recent trading correlations according to my charts.
This could be due to the risk-on nature of Bitcoin and its correlation with the Nasdaq, which is soaring.
Bitcoin is clearly above its 200-day and 200-week moving averages now, so it's obviously in far better shape technically than it was in January.
Please also note the not-so-hidden Wyckoff pattern that has been waiting to blow for some weeks now.
In order for the bulls to win we need simply need to see Bitcoin holding $26,800 next week and making positive technical closes above $27,550. This should leave the door wide open for another shot at $30,000.
Overall, some positive signs are emerging both on and off-chain. Bitcoin might well be preparing to rally based on some of the observations I have outlined today.
Watch out for an increase in Daily Active Address Activity and an increase in trading volumes to foreshadow a potential up move.
