The daily chart of Bitcoin (BTC) has produced three consecutive red candles for the first time since the first week of November. This period coincided with Donald Trump’s US election victory, which had a significant impact on the cryptocurrency market.
A Similar Pattern Emerges
Another similarity between the last time three or more red candles were observed on the daily chart was that Bitcoin retested the 50-day EMA level. The price drop of over 15% since its all-time high has led some analysts to believe that most of the drawdown is potentially over for the largest cryptocurrency.
Analyst: Bitcoin Correction Is ‘Almost Done’
Captain Faibik, an independent crypto trader, stated that BTC’s correction was approaching a conclusion. The analyst 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.
BTC Price Drop Due to Bearish Divergence
The trader explained that such divergences are usually followed by an 8% to10% fall, which is considered a ‘healthy reset.’ The analyst expected the price to bounce from the $94,000 range, as illustrated in the chart below.
BTC Price Analysis by Crypto Faibik
Chart: BTC Price Analysis by Crypto Faibik
On the contrary, Cold Blooded Shiller, an anonymous crypto trader, expected a deeper pullback for Bitcoin based on the same divergence pattern. The analyst stated that if a similar outcome unfolds, BTC’s sell-off may stretch down to as low as $85,000.
Market Analysis by Byzantine General
Byzantine General, a futures market analyst, highlighted incessant selling by spot holders. The analyst said,’We actually got a perp premium at the moment because spot is selling off so much it’s disconnecting from the derivatives market.’
Coinbase Selling Activity Hits Quarterly Low
Maartunn, a CryptoQuant analyst, stated that 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.
BTC Coinbase Premium Gap Chart by Maartunn
Chart: BTC Coinbase Premium Gap Chart by Maartunn
Bitcoin Whale Support Includes Mid-$60K Zone
The mid-$60K zone has been mentioned as potential support for Bitcoin whales. However, the recent price drop has led some analysts to believe that this support may not hold.
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 onchain analyst, highlighted that the BTC realized losses over the past 5 days reached $28.9 million, 320% above its weekly average in 2024.
BTC Realized Loss Chart by Axel Adler Jr
Chart: BTC Realized Loss Chart by Axel Adler Jr
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.
BTC 4-Hour Chart
As observed in the chart, the 4-hour candle has established an immediate recovery above $95,000 after dropping to $92,777. For Bitcoin to nullify the bearish sentiment, a daily candle above $95,000 would be ideal.
Conclusion
The recent price drop and increased selling pressure have led some analysts to believe that most of the drawdown is potentially over for Bitcoin. However, others expect a deeper pullback based on the same divergence pattern. The market is currently in a state of uncertainty, making it essential for investors to stay informed and adjust their strategies accordingly.
Disclaimer
This article is for general information purposes only 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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