For the first time since the first week of November, Bitcoin’s daily chart has produced three consecutive red candles. This coincidence is striking, as it occurred during a similar period to Donald Trump’s US election victory in 2020. Another notable similarity between this event and previous instances where three or more red candles appeared on the daily chart was that Bitcoin retested the 50-day Exponential Moving Average (EMA) level.
BTC Price Drops Below $93,000
With BTC’s price plummeting by over 15% since its all-time high, an analyst has suggested that most of the drawdown is potentially over for the largest cryptocurrency. Captain Faibik, a renowned independent crypto trader, stated that Bitcoin’s correction was nearing its conclusion.
BTC Correction: "Almost Done," Says Analyst
In a recent post on X, Captain Faibik highlighted that BTC’s current decline is due to a massive bearish divergence between its price and Relative Strength Index (RSI) over the past month. Such divergences are typically followed by an 8% to 10% fall, which can be considered a "healthy reset" for the market.
Bitcoin 1-day Analysis by Crypto Faibik
* BTC's current price action is expected to bounce from the $94,000 range.
* The chart suggests that a recovery above $95,000 would be ideal.
On the other hand, Cold Blooded Shiller, an anonymous crypto trader, predicted a deeper pullback for Bitcoin based on the same divergence pattern. Comparing BTC’s current price action to January 2024, the trader suggested that if a similar outcome unfolds, BTC’s sell-off may stretch down to as low as $85,000.
Incessant Selling by Spot Holders
Byzantine General, a futures market analyst, pointed out that spot holders have been engaging in incessant selling. The analyst noted, "We actually got a perp premium at the moment because spot is selling off so much it’s disconnecting from the derivatives market."
Coinbase Premium Gap Chart by Maartunn
* This is the most significant Coinbase selling activity since Bitcoin was priced at $66,000.
* The selling pressure is relentless, as the Coinbase premium fell to a quarterly low.
Bitcoin Realized Losses Reach $28.9 Million
With increasing selling pressure by the hour, the volume of realized losses also peaked above its weekly average. Axel Adler Jr, a Bitcoin on-chain analyst, highlighted that the BTC realized losses over the past 5 days reached $28.9 million, 320% above its weekly average in 2024.
Bitcoin Realized Loss Chart by Axel Adler Jr
* The 28 million mark has been crossed only 10 times this year.
* This suggests that the current selling pressure is significant and warrants attention from investors.
Bearish Break of Structure (BOS) on Mid-term Chart
Analyzing Bitcoin’s mid-term chart revealed a bearish break of structure (BOS). However, there is a clear invalidation for a reversal if Bitcoin continues to close a daily candle above $95,000.
Bitcoin 4-hour Chart
* The 4-hour candle has established an immediate recovery above $95,000.
* For Bitcoin to nullify the bearish sentiment, a daily candle above $95,000 would be ideal.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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