Bitcoin’s Daily Chart Sees Three Consecutive Red Candles for the First Time Since November
Similarities with Last Year’s Trump Election Victory
For the first time since the first week of November, Bitcoin’s daily chart has produced three consecutive red candles. Coincidentally, this period was the lead-up to Donald Trump’s US election victory in 2020. Another similarity between the last time three or more red candles were observed on the daily chart is that Bitcoin retested the 50-day EMA level.
Bitcoin 1-Day Chart
https://www.cryptocompare.com/coins/chart/mtgox/BTC/USD
Potential End of Correction
With Bitcoin’s price dropping by over 15% since its all-time high, one analyst has stated that most of the drawdown is potentially over for the largest cryptocurrency. Bitcoin correction is ‘almost done,’ says analyst.
Bitcoin Price Falls Under $93,000 on Dec. 20
Captain Faibik, an independent crypto trader, said that BTC’s correction was approaching a conclusion in an X post. The trader 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 usually followed by an 8% to 10% fall, which is considered a ‘healthy reset.’
BTC’s Current Decline Due to Bearish Divergence
Source: X.com
https://x.com/captainfaibik/post/btc-1d-analysis
The trader expected the price to bounce from the $94,000 range, as illustrated in the chart.
Contrary Views on Bitcoin’s Future Price Action
On the contrary, Cold Blooded Shiller, an anonymous crypto trader, expected a deeper pullback for Bitcoin based on the same divergence pattern. Comparing BTC’s current price action to January 2024, the tradersaid that if a similar outcome unfolds, BTC’s sell-off may stretch down to as low as $85,000.
Deeper Pullback Expected by Cold Blooded Shiller
Source: X.com
Incessant Selling by Spot Holders
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.’
Spot Sellers Disconnecting from Derivatives Market
Source: X.com
https://x.com/byzantinegeneral/post/btc-1d-analysis
In fact, Maartunn, a CryptoQuant analyst, said 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.
Coinbase Premium Gap Chart by Maartunn
Source: CryptoQuant
https://cryptoquant.com/market/btc-usd-coinbase-premium-gap
Bitcoin Whale Support in Mid-$60K Zone
Related: Bitcoin whale support includes mid-$60K zone in new BTC price warning.
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 onchain analyst, highlighted that the BTC realized losses over the past 5 days reached $28.9 million, 320% above its weekly average in 2024. The 28 million mark has been crossed only 10 times this year.
Bitcoin Realized Loss Chart by Axel Adler Jr
Source: CryptoQuant
https://cryptoquant.com/market/btc-usd-realized-loss
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
Source: TradingView
https://tradingview.com/chart/BTCUSD/
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
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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