Bitcoin correction ‘almost done’ as realized losses rise above weekly average

As a seasoned crypto investor with a decade-long journey in this dynamic market, I have learned to navigate through its turbulent waves and embrace its unpredictable nature. The recent three consecutive red candles on Bitcoin’s daily chart evoke a sense of déjà vu, reminding me of the days leading up to Donald Trump’s US election victory in 2024. Coincidence? Perhaps, but history has a peculiar habit of repeating itself in this realm.

For the first time since early November, when Donald Trump won the U.S. election, Bitcoin’s (BTC) daily chart has shown three consecutive red candles in a row.

As a researcher, I’ve noticed an intriguing pattern: When at least three consecutive red candles appear on the daily chart, it often signifies a retest of the 50-day Exponential Moving Average (EMA) level for Bitcoin.

Following a decline of over 15% from its record high, one expert opines that the majority of the downward trend for Bitcoin might already be behind us.

Bitcoin correction is “almost done,” says analyst

On December 20th, when Bitcoin’s price dipped below $93,000, Captain Faibik, an individual crypto investor, stated that the ongoing correction in Bitcoin’s value might be nearing its end.

In a recent post on X, the trader pointed out that Bitcoin’s current drop can be attributed to a significant difference between its price and the relative strength index (RSI) over the last month, a phenomenon known as bearish divergence. Historically, such discrepancies often precede a decline of 8% to 10%, which is viewed as a normal correction, or “healthy reset.

The trader expected the price to bounce from the $94,000 range, as illustrated in the chart.

Contrarily, an unidentified crypto trader known as Cold Blooded Shiller predicts a more significant drop in Bitcoin prices. This prediction is based on a similar divergence pattern observed previously. If the current market behavior mirrors that of January 2024, the potential sell-off could extend to approximately $85,000.

In the meantime, a Byzantine General, who specializes in futures market analysis, pointed out continuous selling from owners of current assets. The analyst stated that this was their observation.

“We actually got a perp premium at the moment because spot is selling off so much it’s disconnecting from the derivatives market.”

Indeed, Maartunn, an analyst from CryptoQuant, pointed out that the current Coinbase selling activity is the strongest since Bitcoin was valued at $66,000. The downward pressure on the market is persistent, as the Coinbase premium dipped to its lowest quarterly level.

Bitcoin realized losses reached $28.9 million

As selling pressure intensifies, so do the accumulated losses, surpassing their weekly average. Notably, Axel Adler Jr, a Bitcoin onchain analyst, pointed out that the total BTC realized losses over the past five days amounted to $28.9 million, representing a staggering 320% increase compared to its usual weekly average in 2024. This significant figure of $28.9 million has been surpassed just ten times throughout the year so far.

Looking at the medium-term Bitcoin graph shows a potential bearish trend indicated by a broken structure (BOS). But if Bitcoin manages to end its daily trade above $95,000, it could signal an invalidation of this trend and possibly hint at a turnaround.

According to the graph, the 4-hour candlestick has bounced back above $95,000 following a dip to $92,777. To counteract the negative trend for Bitcoin, it would be best if a daily candlestick closes above $95,000.

This piece is written primarily to provide a broad understanding; it’s not meant to serve as legal or financial guidance. The perspectives, ideas, and viewpoints shared within this text are solely those of the author and may not mirror or align with the views held by CryptoMoon.

2024-12-20 23:25

Bitcoin correction is “almost done,” says analyst

Bitcoin realized losses reached $28.9 million

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