Bitcoin’s consolidation phase is often uncomfortable for traders. It will test your patience and faith. However, such periods can also create opportunities for investors who follow a disciplined capital management plan.
Several signals suggest that January could be the month in which Bitcoin enters an important correction phase ahead of a recovery.
Three signals that suggest January may be the time for Bitcoin to hit rock bottom
Based on technical data, on-chain data, and currency data, analysts believe that positive signs for a long-term recovery have emerged.
First, technical data shows that Bitcoin is approaching the optimal DCA zone based on the moving average (MA).
According to on-chain analytics platform Alpharactal, the ideal long-term accumulation zone is often BTC The price is below all daily moving averages from the 7-day cycle to the 720-day cycle. This situation creates a “safe zone” where prices are considered undervalued relative to the long-term trend.
Bitcoin is currently below most of these moving averages since last November. Only MA720 remains intact. This level is located around $86,000.
“Bitcoin is very close to being one of the best zones to apply a DCA strategy. Historically, these zones have been the best areas for long-term accumulation. For that to happen, BTC It will have to come down to below $86,000,” Alfarakhtar said.
Bitcoin dynamic MA and price. Source: Alpha Lactal
While Bitcoin falling below $86,000 does not mean it will bottom out immediately, historical data shows that Bitcoin falling below $86,000 is BTC The breakout from MA7 to MA720 will likely last several months.
Second, on-chain data shows that Bitcoin network growth is at its lowest level in years. Although this appears negative, historical patterns suggest it may precede a recovery phase.
According to SwissBlock, an investment fund and market intelligence provider, weak network activity and low liquidity indicate that Bitcoin is in a phase of accumulation or consolidation towards its next big move.
“While network growth has reached its lowest level since 2022, liquidity continues to be depleted. BTC “We have entered a consolidation phase as network growth has started to recover, even though liquidity remains weak and bottomed out,” SwissBlock reported.
Bitcoin network growth and liquidity. Source: Swissbloc
Swissblock also noted that signs of new adoption are still needed. If this theory comes true, a rally similar to 2022 could push Bitcoin to all-time highs this year.
Third, currency data shows that selling pressure from whales has subsided significantly over the past month. This change creates a more supportive environment for price stability and recovery.
Flow from Binance Whale to Exchange. Source: CryptoQuant.
According to CryptoQuant data, BTC Flows from whales to exchanges have declined sharply, especially on Binance.
in particular, BTC Inflow from large transactions ranging from 100 to over 10,000 BTC It has fallen from about $8 billion per month in late November 2025 to about $2.74 billion today. This change in behavior significantly reduces sell-side supply. It supports price stability and strengthens the chances of recovery.
A combination of technical signals (price trading below key moving averages), on-chain data (low network growth), and trading indicators (declining whale sales) suggest that Bitcoin is entering an ideal consolidation phase to form a local bottom.
However, the above data is insufficient to determine the exact bottom price. Furthermore, some external uncertainties remain unaccounted for. These include the possibility of renewed tariff pressure amid geopolitical tensions and the impact on markets of an upcoming change in Federal Reserve leadership.
The post 3 Reasons Why Bitcoin’s January Is an Important Consolidation Phase was first published on BeInCrypto.
