Coincidentally, the Bitcoin (BTC) daily chart generated three consecutive red candles for the first time since the first week of November, ahead of Donald Trump’s victory in the US presidential election.
Another similarity to the last time we observed three or more red candles on the daily chart is that Bitcoin has retested the 50-day EMA level.
Bitcoin 1 day chart. Source: Cointelegraph/TradingView
With the price of BTC down more than 15% since its all-time high, one analyst said most of the decline for the largest cryptocurrency is potentially over.
Analyst Says Bitcoin Correction Is “Almost Complete”
With the price of Bitcoin falling below $93,000 on December 20, independent cryptocurrency trader Captain Faibik said that BTC’s correction is nearing a conclusion.
In the This difference typically results in an 8-10% decline, which is considered a “healthy reset.”
Bitcoin 1-day analysis by Crypto Faibik. Source: X.com
Traders expected the price to rebound in the $94,000 range, as shown in the chart.
Conversely, anonymous cryptocurrency trader Cold Blooded Shiller predicted a bigger decline for Bitcoin based on the same divergence pattern. Comparing BTC’s current price action to January 2024, the trader said a similar outcome could lead to a selloff in BTC as low as $85,000.
Meanwhile, futures market analyst Byzantine General highlighted the constant selling by spot holders. The analyst said:
“We’re actually getting a puff premium right now because spot has been sold so much that it’s disconnected from the derivatives market.”
In fact, CryptoQuant analyst Maartunn said this was the most significant Coinbase selling activity since Bitcoin hit $66,000. Selling pressure continues to be “relentless” as Coinbase premiums fall to quarterly lows.
Bitcoin Coinbase Premium Gap Chart by Maartunn. Source: X.com
Related: Bitcoin Whale Support Includes Mid-$60,000 Zone on New BTC Price Alert.
Bitcoin realized losses amounted to $28.9 million.
As selling pressure increased hourly, realized losses also exceeded the weekly average. Bitcoin on-chain analyst Axel Adler Jr highlighted that BTC realized losses reached $28.9 million over the past five days, which is 320% higher than the 2024 weekly average. The $28 million figure was surpassed only 10 times this year.
Bitcoin Realized Loss Chart by Axel Adler Jr. Source: X.com
Analysis of Bitcoin’s medium-term charts reveals a bearish structural breakdown (BOS). However, if Bitcoin continues to close the daily candle above $95,000, the reversal will clearly be invalidated.
Bitcoin 4 hour chart. Source: Cointelegraph/TradingView
As you can see on the chart, the 4-hour candle fell to $92,777 before immediately recovering above $95,000. A daily candle above $95,000 would be ideal for Bitcoin to negate the bearish sentiment.
Related: Bitcoin falls to $92,000 in ‘optimal buy the dip’ move as PCE strengthens cryptocurrency.
This article is written for general information purposes and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.