#CryptoReboundStrategy
Beware of Bitcoin's 'shooting star' at all-time highs: Godbole The candlestick pattern shows that sellers are looking to reaffirm themselves as aggressive Fed rate projections push the DXY higher.
What to know:
BTC formed a shooting star candle in December, suggesting renewed pessimism.
The December low is the level that bulls must defend.
The pattern is consistent with macroeconomic developments suggesting short-term pain for risk assets.
Bitcoin (BTC) began the new year on a high note after reaching the six-figure mark in 2024. Most observers expect 2025 to be equally remarkable, with projections placing BTC at $185,000 and more.
However, the path may not be as clearly bullish as expected, as recent price action suggests that sellers are looking to reaffirm themselves, increasing the possibility of a notable price drop in the future.
We refer to the price action in December when bitcoin reached an all-time high above $108,000 but ended the month negatively, below $94,000, marking its first monthly loss since August.
The bidirectional price action formed a bearish reversal candle pattern called 'shooting star' on the monthly chart.
The candle features a long upper wick or shadow, reflecting a substantial gap between the high and the opening for the specified period, along with a small body, representing a minimal difference between the opening and closing. The wick must be at least twice the size of the body, and the lower wick could be tiny at best. In the case of BTC, the upper wick is almost four times larger than the body, with a tiny lower wick.
The shape of the shooting star shows that buyers initially pushed prices higher, only for sellers to take control near the highs and push prices below the opening level, indicating renewed pessimism in the market.
"Bears potentially have control," explains the Level III textbook of the CMT Association, shedding light on the psychology behind the shooting star pattern.👇👇👇👇👇👇
The shooting star has appeared after a notable bullish trend from $70,000 to over $100,000, warning of a potential bearish reversal in the future, which would be confirmed if prices fall below the December low of $91,186. That is the level that bulls must defend.
Note that similar candles with longer upper wicks have marked highs of previous bull markets.