Will Bitcoin's Price Soon Break Out? Historical Trends and On-Chain Data Suggest So

The price of Bitcoin has been trading within a narrow band, but historical trends and on-chain data suggest that a breakout could occur soon.

Bitcoin (BTC) has been stuck between approximately $84,000 and $82,000, with buyers struggling to push the price higher. Despite market caution, historical patterns and on-chain data indicate the potential for a breakout.

According to Rekt Capital's March 18th analysis, Bitcoin's current price action bears resemblance to its movement in June 2021. After experiencing a sharp decline, Bitcoin found itself trading between the 21-week and 50-week EMAs. Following a breakout in late July, it went on to reach an all-time high in November. Bitcoin is currently trading within the same range, leading to speculation that history may repeat itself.

Rekt Capital also noted that Bitcoin's selling pressure has been decreasing. Recent sell-offs have been accompanied by lower-than-usual volume, indicating that sellers are losing momentum. This opens up opportunities for buyers, making the past week a buyer-dominated period. Similar shifts in previous cycles have resulted in strong uptrends.

CryptoQuant reports that Bitcoin is currently experiencing a deleveraging phase, which involves the removal of excess leverage from the market. In the past, these phases have created short- to medium-term buying opportunities and paved the way for recoveries. Previous market cycles have shown that Bitcoin often sees strong price rebounds after leverage resets.

Another important indicator is the increase in the 3-6 month UTXO age bands, which indicate how long Bitcoin has been held. CryptoQuant's March 15th analysis revealed that the number of coins in this category is increasing, similar to what occurred during the mid-2024 correction. This suggests that more investors are holding onto their Bitcoin rather than selling, reducing the available supply. In previous cycles, this type of accumulation has played a significant role in forming market bottoms and driving new rallies.

However, outflows from US-based Bitcoin ETFs have continued for the fifth consecutive week, setting a new record. Despite this sign of short-term uncertainty, Bitcoin may be primed for a significant move if selling pressure decreases and accumulation increases. If previous patterns continue, a breakout could occur soon.