Key takeaways:

• Stablecoin inflow patterns mirror levels seen after the LUNA and FTX collapse. Pointing to fresh accumulation and the potential for a breakout rally.

• Bitcoin holds above $100,000, but new user activity is still low, indicating a “HODL” phase where holders are waiting for fresh demand to drive prices higher.

Bitcoin (BTC) is flashing early signs of a strong rally, but the price chart is not drawing attention. Onchain data shows a “demand generation” pattern similar to the accumulation phases seen after the Terra/LUNA and FTX collapse, and both marked major cycle bottoms.

Bitcoin researcher Axel Adler Jr. said that the 30-day moving average of stablecoin inflows has dipped into negative territory, forming the same “blue zones” previously seen in 2022. This suggests participants are not ready to sell, signaling a return of meaningful demand amid suppressed volatility. Adler said,

“If inflows remain at or surpass levels seen post-LUNA and FTX, it would strongly signal the launchpad of the next Bitcoin rally.”

Bitcoin network activity signals HODL dominance

BTC price is strong above $100,000, but the New UTXO 30-day SMA, a proxy for new network activity, remains near 570,000. That’s roughly 40% lower activity than when BTC was trading between $60,000–$70,000 and far from the 850,000–1 million range that supported the 2024 bull run.

This divergence suggests that long-term holders are locking up coins, not moving them, creating a supply squeeze scenario where price could rapidly rise if new demand kicks in. A move past 700,000 on the New UTXO metric would signal that fresh participants are entering. If it climbs beyond 850,000, it could confirm the start of a full-blown retail and institutional-driven bull phase.

The Exchange Flow Multiple supports this setup, tracking short-term to long-term BTC inflows, which has dropped to a zone that historically marks a seller exhaustion phase where diminished sell-side liquidity sparks upside price momentum.

Meanwhile, whales appear to be mobilizing. Large transactions now comprise 96% of all exchange flows, a level historically associated with major price expansions. These entities may position coins for strategic redistribution, often timed with price spikes.

Related: Record Q2, monthly close next? 5 things to know in Bitcoin this week

BTC risk in demand-supply imbalance persists

Despite these bullish structural signals, short-term risks remain. The Apparent Demand metric for 30 days has returned negative for the first time in two months, indicating that new buyer demand isn’t strong enough to absorb selling pressure from miners and some long-term holders (LTHs). This imbalance raises the risk of a near-term price correction.

In this mixed environment characterized by HODLing, seller exhaustion, and early whale activity, Bitcoin’s next move hinges on whether fresh demand can outpace residual selling. A short-term correction could precede the broader uptrend if momentum stalls near key resistance levels at $110,000.

Related: Bitcoin’s new all-time high now ‘inevitable’ as BTC price eyes liquidity at $109K

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

]]> https://earlybirdsinvest.com/bitcoin-demand-generation-phase-mirrors-2022-market-bottom-are-new-highs-incoming/feed/ 0 45032 https://earlybirdsinvest.com/ethereum-mirrors-bitcoin-2020-breakout-setup-historic-run-incoming/ https://earlybirdsinvest.com/ethereum-mirrors-bitcoin-2020-breakout-setup-historic-run-incoming/#respond Thu, 05 Jun 2025 13:46:29 +0000 https://earlybirdsinvest.com/ethereum-mirrors-bitcoin-2020-breakout-setup-historic-run-incoming/

Ethereum is trading at critical levels after breaking past the $2,500 mark earlier this quarter, now attempting to reclaim momentum and push into higher resistance. Despite global macroeconomic pressures—including rising US Treasury yields and persistent trade tensions between the US and China—ETH continues to show resilience. Market analysts believe that Ethereum could be leading the charge into a long-anticipated altseason, provided it holds key levels and breaks above current supply.

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Top analyst Ted Pillows recently pointed to a compelling technical pattern: Ethereum has now posted four consecutive two-week green candles, a formation that mirrors Bitcoin’s price structure in early 2020 following the March crash. That period marked the beginning of Bitcoin’s legendary bull run to $69,000.

According to Pillows, the similarities between BTC in 2020 and ETH in 2025 are “just mind blowing,” sparking renewed interest from traders who see Ethereum’s current consolidation as a bullish continuation. With investor sentiment slowly recovering and technicals turning favorable, the market is watching ETH closely. If history is any guide, this consolidation could mark the calm before Ethereum’s next major leg higher. However, macro risks still linger, and timing will be critical.

Ethereum Resilience Sparks Hopes Of 2020-Like Rally

Ethereum is holding strong above the $2,600 level, showing resilience amid global macro uncertainty and volatile market conditions. This consolidation around key support has many investors and analysts anticipating a breakout that could lead Ethereum into a new rally phase, potentially triggering a broader altseason. Despite growing concerns around systemic risk in the bond market and geopolitical tensions between the US and China, Ethereum continues to attract buyers, signaling confidence in its long-term strength.

Analysts are watching this range closely. Many believe that if Ethereum can maintain support and break above near-term resistance, it could gain serious momentum. One of the more compelling arguments for a bullish outlook comes from Ted Pillows, who highlights a striking similarity between Ethereum’s current structure and Bitcoin’s behavior in 2020.

According to Pillows, Ethereum has now printed four consecutive two-week green candles since bottoming, just as Bitcoin did after the March 2020 crash. That pattern marked the start of BTC’s legendary run to $69,000. The comparison has sparked optimism that ETH may be preparing for a similar breakout, especially if it clears resistance near $2,700–$2,800.

While the macro environment remains tense, this technical structure—paired with rising confidence in ETH’s strength—keeps bulls hopeful that a major move is on the horizon.

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ETH Price Analysis: Consolidation Above Support

Ethereum (ETH) is holding steady around $2,607, consolidating just above the 34-period EMA on the 4-hour chart, which currently sits near $2,594. After the strong surge in early May that saw ETH rally from under $2,000 to highs near $2,850, the price has moved into a tight consolidation range. This sideways action reflects market indecision as buyers and sellers battle for control.

Despite the recent volatility, ETH has continued to post higher lows, indicating ongoing bullish pressure. The 50, 100, and 200-period SMAs are aligned below the current price, all trending upward, signaling that the broader trend remains intact. The price is finding consistent support from the 50-period SMA around the $2,590–$2,600 zone, which is a key level to watch.

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A decisive break above the short-term resistance near $2,680 would be needed to confirm continuation toward $2,800 and potentially retest previous highs. On the downside, a break below $2,590 could trigger a pullback toward $2,500 or lower, especially if BTC shows weakness.

Featured image from Dall-E, chart from TradingView

The price action for XRP and bitcoin (BTC) resembles a tightly compressed spring on the verge of uncoiling with a sudden release of energy.

That’s the message from a key volatility indicator called Bollinger Bandwidth. Bollinger Bands are volatility bands set at plus two and minus two standard deviations above and below the 20-period moving average (SMA) of an asset’s market price. The bandwidth measures the space between these bands as a percentage of the 20-day moving average.

In the case of XRP, the Bollinger bandwidth has narrowed to its lowest level since October 2024 on the 4-hour chart, where each candle represents price action for a four-hour period. The 4-hour chart interval is quite popular in the 24/7 crypto market, allowing traders to analyze and predict short-term price movements. Bitcoin’s 4-hour chart mirrors the Bollinger band width pattern in XRP.

The long-held belief is that a tighter Bollinger band width, reflecting a quiet period in the market, is akin to a compressed spring ready for significant movement.

During these calm phases, the market accumulates energy that is eventually released once a clear direction is established, often leading to dramatic rallies or sharp price declines. Both XRP and bitcoin surged in November-December following an extended range-bound period that left their bandwidth at levels comparable to those observed today.

That said, tighter bands do not always indicate a bullish volatility explosion; they can also foreshadow a sell-off. For example, the bands tightened in October 2022, signaling a significant move ahead, which materialized on the downside after FTX went bust.

It remains to be seen whether this latest spring compression will trigger bullish volatility or lead both tokens into a tailspin. The recent hawkish comments from Federal Reserve’s Chairman Jerome Powell and selling by some whales favor the latter.

Stay alert!

Bitcoin is trading below the $100K mark after a rollercoaster of a week, marked by intense volatility and sustained selling pressure. Last Sunday, the cryptocurrency faced extreme market turbulence, dropping over 9% in less than 24 hours. While BTC managed a recovery bounce on Monday, the selling pressure has not subsided, leaving the market uncertain about its next direction.

Amid this turbulent price action, key metrics highlight a critical relationship between Bitcoin’s performance and demand growth. CryptoQuant’s Head of Research, Julio Moreno, shared insights on X, revealing that Bitcoin’s price return is closely tied to its demand growth. Moreno emphasized that slowing demand since early December has directly correlated with diminished returns, underscoring the crucial role of market participation in sustaining bullish momentum.

This observation sheds light on the current state of the market, where declining speculative appetite and weakening leveraged positions are contributing to choppy price action. As Bitcoin hovers below the $100K mark, both bulls and bears are locked in a battle for control, with demand growth serving as a pivotal factor in determining the cryptocurrency’s trajectory. With market participants closely monitoring these dynamics, the coming days could prove decisive for BTC’s short-term and long-term outlook.

Bitcoin Demand Declines As Investors Fear A Correction

Bitcoin has faced significant volatility and selling pressure since the start of February, sending ripples through the broader crypto market. Altcoins and meme coins, often more vulnerable during bearish trends, have experienced even sharper price drops, amplifying uncertainty among investors. Analysts are increasingly signaling a potential correction, citing tired bulls and bearish price action that hints at further declines.

Moreno provided key insights on X, linking Bitcoin’s price performance directly to demand growth. According to Moreno, Bitcoin’s price return closely follows the trajectory of its demand growth.

Since early December, demand growth has been slowing, which aligns with the weakening momentum in Bitcoin’s gains. Moreno emphasizes the importance of monitoring demand growth as a critical indicator to predict Bitcoin’s next rally.

Currently, Bitcoin’s price is hovering around $96K as bulls struggle to reclaim and hold the psychological $100K mark. This level is not only a critical point of resistance but also a major factor in determining short-term market sentiment.

Without a breakout above $100K, BTC remains vulnerable to additional selling pressure and a potential drop to lower demand zones. However, reclaiming this level and holding it as support would signal a shift in momentum, paving the way for a potential rally.

BTC Price Showing Indecision

Bitcoin is currently trading at $96,700 after several days of sideways price action between $100,000 and $95,600. The market appears stuck in a range, with no clear short-term direction as both bulls and bears struggle for control. Bulls lost their grip on momentum after the price fell below the crucial $100K level last Tuesday, and they have been unable to reclaim it since.

The lack of upward movement has raised concerns among investors, as Bitcoin’s inability to break above $100K could signal growing weakness in the market. Meanwhile, bears have been applying consistent pressure, but they have yet to force the price below the critical $95K support level.

If Bitcoin drops below $95K in the coming days, a further decline into the $90K demand zone is likely. This would mark a significant bearish move and could lead to increased selling pressure as investors grow wary of a deeper correction.

However, if BTC can maintain its position above $95K, there is still potential for bulls to regain strength and push the price back toward the $100K mark. For now, the market remains uncertain, and traders are closely monitoring these key levels for signs of the next major move.

Featured image from Dall-E, chart from TradingView