Bitcoin Recovers Above $101,000 Despite Short-Term Concerns

Bitcoin (BTC) has shown resilience after a brief drop to $98,000 over the weekend, recovering to trade above $101,000. Despite concerns about a potential double top, on-chain data has not indicated any major warning signs. According to a recent analysis by contributor Avocado_onchain, Bitcoin appears to be in a healthy consolidation phase rather than at a market top.

The 30-day moving average (MA) of Binary Coin Days Destroyed (CDD) suggests that long-term holders are continuing to hold onto their BTC, indicating optimism about Bitcoin’s potential for further upside. 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 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. The analyst emphasized that this indicator does not signal the end of the bull run. Rather, Bitcoin could be following a “staircase-like movement,” where periods of consolidation are followed by a strong upward leg.

Historically, Bitcoin 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. 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). However, 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.