Bitcoin bulls face key on-chain test at six–twelve month cost basis

Bitcoin tests a key on-chain cost basis after its longest winning streak in months, with rising stablecoin reserves but weakening Sharpe ratio tempering the rebound.

Bitcoin (BTC) is testing a critical resistance level this week that analysts say will determine the cryptocurrency’s next major trend, according to market observers.

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The digital asset momentarily pushed past a recent intraday high on January 6 after five consecutive days of gains, the longest winning streak since early October 2025, according to CoinGecko data.

Analysts noted that Bitcoin’s price is trading below a key on-chain metric: the average acquisition price for coins that last moved between six and twelve months ago. Historical data shows that when the price remains under this cost basis, the overall trend tends to stay negative with a higher probability of further losses, according to the analyst.

“Right now, that cost basis sits near that threshold,” Crypto Dan stated. “After weeks of sideways movement, Bitcoin is showing early signs of a rebound, making this level the key threshold to watch.”

A break above that threshold would signal a major shift, as reclaiming it has previously marked transitions from bearish to bullish trends, according to the analysis. Failure to exceed it would suggest the downtrend that began after October’s all-time high remains active.

The technical analysis aligns with observations from analyst Doctor Profit, who previously noted that Bitcoin had broken a short-term resistance level, opening a path toward a higher price range.

Market data suggests Bitcoin may be in a transitional phase. Analyst Darkfost pointed out that stablecoin reserves on Binance grew significantly recently, indicating capital on the sidelines ready to support prices. The ratio of Bitcoin to stablecoins on the exchange shows a buildup of potential buying power, according to the analyst.

However, analyst BorisD observed that Bitcoin’s Sharpe ratio, which measures returns relative to volatility, is declining even as the price rises. This suggests the recent upward movement is driven more by internal market mechanics and short-covering than by strong new demand from external investors, according to the analyst.

The cryptocurrency market is monitoring whether Bitcoin can overcome the key resistance level as price action consolidates.