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Home»ADOPTION NEWS»Bitcoin ‘Spinning Top’ Candle Targets $115K After Recent 15% BTC Flash Crash
ADOPTION NEWS

Bitcoin ‘Spinning Top’ Candle Targets $115K After Recent 15% BTC Flash Crash

By Crypto FlexsDecember 6, 20243 Mins Read
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Bitcoin ‘Spinning Top’ Candle Targets 5K After Recent 15% BTC Flash Crash
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Bitcoin (BTC) price fell to $90,500 following a flash crash on December 5, before quickly recovering above $100,000.

Bitcoin 4 hour chart. Source: Cointelegraph/TradingView

Despite falling 14% from its all-time high of $104,600, Bitcoin is up 4.57% on the daily chart, maintaining a bullish position above the respective EMA levels on the 4-hour chart.

Bitcoin Funding Rate Reset After $400 Million Liquidation

Bitcoin’s sharp decline occurred within an hour, during which the candle’s high and low were $99,105 and $90,500, respectively. Bitcoin liquidations exceeded $400 million in this short period, making it the largest liquidation event since 2021.

However, the most positive thing about the liquidation event is that BTC’s funding rate was reset. BTC’s open interest weighted funding ratio fell from 0.09% on December 4 to 0.01% on December 6.

Bitcoin futures analyst Byzantine General said the funding rate has been reset and Bitcoin is “looking really good.”

Byzantine General’s Bitcoin futures indicator analysis. Source: X.com

The anonymous trader highlighted a sharp decline in the funding rate, a decline in the total open interest to around $95,000, and a decrease in the total spot premium. All of these factors indicate that futures markets are relatively down in debt compared to just a few days ago. The analyst added:

“It would be crazy if BTC kept pumping after the Liq cascade. Then there would be nothing to stop this train.”

Related: Bitcoin Futures Premiums Hit 8-Month High. Will the BTC rally continue?

Bitcoin: “This is normal”

Following the price volatility on December 5, Bitcoin’s one-day chart showed the formation of a bearish spinning candlestick pattern. Tops indicate a period of indecision for an asset as both buyers and sellers push the price in opposite directions.

Coincidentally, this pattern has been observed at previous important milestones for Bitcoin. “This is normal” for BTC, Charles Edwards, founder of the Capriole Fund, said, emphasizing that Bitcoin behaved similarly when it passed $1,000 and $10,000.

Bitcoin 1-day analysis by Charles Edwards. Source: X.com

As you can see from the chart, a similar bearish spinning top candle pattern was observed when BTC crossed $10,000 in December 2017, and we saw significant price fluctuations after crossing $1,000.

In both cases, the bearish volatility was short-lived, and prices continued to rise even after this milestone target was achieved. Therefore, the strong market trend is expected to repeat this time.

Bitcoin price, market, Bitcoin futures, price analysis, market analysis

Bitcoin 1 day chart. Source: Cointelegraph/TradingView

According to Fibonacci extensions, Bitcoin’s immediate target remains at $115,000, 15% higher from the $100,000 level. With the Relative Strength Index or RSI coiling below the overbought zone, an aggressive breakout could push the price up to $124,500, which is three times higher than the swing low value of the Fibonacci extension at $90,500.

Related: 4 New BTC Price Targets Expect Bitcoin Above $124,000 By New Year