Bitcoin’s (BTC) daily chart has produced three consecutive red candles for the first time since the first week of November, which coincidentally was the lead-up period to Donald Trump’s US election victory.
Another similarity between the last time three or more red candles were observed on the daily chart was that Bitcoin retested the 50-day EMA level.
Bitcoin 1-day chart. Source: Cointelegraph/TradingView
With BTC’s price dropping by more than 15% since its all-time high, one analyst said that most of the drawdown is potentially over for the largest cryptocurrency.
Bitcoin correction is “almost done,” says analyst
With Bitcoin price falling under $93,000 on Dec. 20, Captain Faibik, an independent crypto trader, said that BTC’s correction was approaching a conclusion.
In an X post, the trader 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% to10% fall, which is considered a “healthy reset.”
Bitcoin 1-day analysis by Crypto Faibik. Source: X.com
The trader expected the price to bounce from the $94,000 range, as illustrated in the chart.
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.
Meanwhile, 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.”
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 Coinbase premium gap chart by Maartunn. Source: X.com
Related: Bitcoin whale support includes mid-$60K zone in new BTC price…
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