Bitcoin (BTC) daily chart has shown three consecutive red candles, the first time since the first week of October, which coincided with the run-up to Donald Trump’s election victory in the US.
Another similarity between the last time there were three or more red candles on the daily chart is that Bitcoin retested the 50-day EMA.
Bitcoin 1-day chart. Source: TinTucBitcoin/TradingView
With BTC prices down more than 15% since hitting an all-time high, one analyst says most of the downside is nearly over for the largest cryptocurrency.
Analysis: Bitcoin Correction Nearing Its End
With Bitcoin price falling below $93,000 on December 20, Captain Faibik, an independent crypto trader, said BTC’s correction is nearing its end.
In a post on X, the trader highlighted that BTC’s current decline is due to a sharp bearish divergence between its price and the relative strength index (RSI) over the past month. Such divergences are typically followed by an 8% to 10% drop, which is considered a “healthy correction.”
See also: Bitcoin hits $100K: Media changes since 2009
Bitcoin 1 Day Analysis by Crypto Faibik. Source: X.com
The trader predicts the price will bounce from around $94,000, as shown on the chart.
On the contrary, Cold Blooded Shiller, an anonymous crypto trader, predicts a deeper pullback for Bitcoin based on a similar divergence pattern. Comparing BTC’s current price action to January 2024, the trader said that if a similar outcome occurs, BTC’s sell-off could extend to as low as $85,000.
Meanwhile, Byzantine General, a futures market analyst, highlighted the relentless selling by spot holders. The analyst said,
“We currently have a perpetual premium because spot sellers are selling so heavily that it is disconnected from the derivatives market.”
In fact, Maartunn, an analyst at CryptoQuant, said it was the most significant sell-off from Coinbase since Bitcoin hit $66,000. The selling pressure was “relentless,” as Coinbase premiums fell to a quarterly low.
See also: Amazon shareholders vote on adopting Bitcoin
Bitcoin Coinbase Premium Gap Chart by Maartunn. Source: X.com
Bitcoin Realized Losses Hit $28.9 Million
With selling pressure increasing by the hour, realized losses also peaked above the weekly average. Bitcoin on-chain analyst Axel Adler Jr. noted that BTC’s realized losses over the past five days have reached $28.9 million, more than 320% above the 2024 weekly average. The $28 million mark has only been surpassed 10 times this year.
Bitcoin Realized Loss Chart by Axel Adler Jr. Source: X.com
Bitcoin’s mid-term chart analysis reveals a bearish structure (BOS) breakdown. However, there is a clear invalidation of a reversal if Bitcoin continues to close a daily candle above $95,000.
Bitcoin 4-hour chart. Source: TinTucBitcoin/TradingView
As seen on the chart, the 4-hour candle established a rebound just above $95,000 after falling to $92,777. For Bitcoin to invalidate the bearish sentiment, a daily candle above $95,000 would be ideal.
