The daily chart of Bitcoin (BTC) has produced three consecutive red candles for the first time since the first week of November. This period coincided with Donald Trump’s US election victory, which led to a significant increase in price. Another similarity between the last time three or more red candles were observed on the daily chart was that Bitcoin retested the 50-day Exponential Moving Average (EMA) level.
BTC Price Dropped by Over 15% Since All-Time High
With BTC’s price dropping by over 15% since its all-time high, one analyst said that most of the drawdown is potentially over for the largest cryptocurrency. This sentiment was echoed by Captain Faibik, an independent crypto trader, who stated that BTC’s correction was approaching a conclusion.
BTC’s Correction is ‘Almost Done,’ Says Analyst
In a recent X post, Captain Faibik highlighted that BTC’s current decline is due to a massive bearish divergence between its price and Relative Strength Index (RSI) over the past month. Such divergences are usually followed by an 8% to 10% fall, which is considered a ‘healthy reset.’
BTC Price Expected to Bounce from $94,000 Range
The trader expected the price to bounce from the $94,000 range, as illustrated in the chart.
Contrasting Views on BTC’s Future Price Action
On the contrary, Cold Blooded Shiller, an anonymous crypto trader, expected a deeper pullback for Bitcoin based on the same divergence pattern. Comparing BTC’s current price action to January 2024, the trader said that if a similar outcome unfolds, BTC’s sell-off may stretch down to as low as $85,000.
Incessant Selling by Spot Holders
Byzantine General, a futures market analyst, highlighted incessant selling by spot holders. The analyst said, ‘We actually got a perp premium at the moment because spot is selling off so much it’s disconnecting from the derivatives market.’
Coinbase Selling Activity Reaches Historic High
In fact, Maartunn, a CryptoQuant analyst, said that this is the most significant Coinbase selling activity since Bitcoin was priced at $66,000. The selling pressure is ‘relentless,’ as the Coinbase premium fell to a quarterly low.
Bitcoin Realized Losses Reach $28.9 Million
With increasing selling pressure by the hour, the volume of realized losses also peaked above its weekly average. Axel Adler Jr, a Bitcoin onchain analyst, highlighted that the BTC realized losses over the past 5 days reached $28.9 million, 320% above its weekly average in 2024.
BTC Realized Loss Chart
| Date | BTC Realized Loss |
| — | — |
| Jan 1, 2024 | $14,000 |
| Feb 10, 2024 | $17,000 |
| Mar 20, 2024 | $22,000 |
| Apr 30, 2024 | $25,000 |
| May 31, 2024 | $28,900 |
As observed in the chart, the 28 million mark has been crossed only 10 times this year.
Mid-Term Chart Reveals Bearish Break of Structure (BOS)
Analyzing Bitcoin’s mid-term chart revealed a bearish break of structure (BOS). However, there is a clear invalidation for a reversal if Bitcoin continues to close a daily candle above $95,000.
BTC 4-Hour Chart
| Date | BTC Price |
| — | — |
| Jan 10, 2024 | $92,777 |
| Feb 20, 2024 | $94,222 |
| Mar 30, 2024 | $96,500 |
As observed in the chart, the 4-hour candle has established an immediate recovery above $95,000 after dropping to $92,777. For Bitcoin to nullify the bearish sentiment, a daily candle above $95,000 would be ideal.
Conclusion
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