According to BlockBeats, on January 3, CoinDesk market analyst Omkar Godbole said that Bitcoin hit an all-time high of more than $108,000 in December 2024, but closed below $94,000 at the end of the month.
This two-way price action has formed a bearish reversal candle pattern known as a “shooting star” on the monthly chart.
This pattern is characterized by a long upper shadow, reflecting a significant gap between the high and the opening price, and a small candle body, indicating a small gap between the opening and closing prices. The upper shadow needs to be at least twice the size of the real body, while the lower shadow is usually very short or even non-existent. In the case of BTC, the upper shadow is almost four times the size of the real body, and the lower shadow is barely there.
The shape of the shooting star indicates that buyers initially pushed prices higher, but as they approached the peak, sellers began to take control, pushing prices below the opening price, suggesting a potential return of bearish sentiment in the market.
The shooting star appears after a significant uptrend from $70,000 to over $100,000, warning of a possible bearish reversal. This reversal will be confirmed if the price breaks below the December low of $91,186. This is a key level that bulls need to defend.
It is worth noting that similar long upper shadow candlesticks were also observed at previous bull market peaks.
The cautious signal conveyed by the latest shooting star aligns with the broader macroeconomic environment, indicating that risk assets may face challenges. This is mainly driven by the Federal Reserve's recent hawkish signals, rising Treasury yields, and a strengthening dollar index.
Nevertheless, analysts remain confident that the Federal Reserve will retract its recent indication of reducing rate cuts in 2025, thereby ensuring the continuation of the bullish trend for BTC and risk assets overall.
