Bitcoin’s price chart has now shown three consecutive daily red candles, a pattern not observed since early November. That instance coincided with the lead-up to Donald Trump’s U.S. presidential election victory.
Interestingly, the last time this pattern emerged, Bitcoin retested its 50-day exponential moving average (EMA).
Following a more than 15% drop from its all-time high, some analysts believe Bitcoin’s current correction phase may be nearing its conclusion.
Bitcoin Correction Nears Completion, Says Analyst
Bitcoin’s price slipped below $93,000 on Dec. 20, prompting independent crypto trader Captain Faibik to suggest that the correction could soon run its course.
In a social media post, Faibik pointed to a significant bearish divergence between Bitcoin’s price and its relative strength index (RSI) over the last month. Historically, such divergences lead to a drop of 8–10%, which is seen as a healthy market adjustment.
The trader predicted a rebound from the $94,000 level, as illustrated in their shared chart.
However, not all analysts share this optimism. Cold Blooded Shiller, an anonymous trader, warned of a potential deeper correction. Comparing the current price movement to January 2024, they speculated that Bitcoin’s price could dip as low as $85,000 if the pattern repeats itself.
Meanwhile, futures market analyst Byzantine General highlighted aggressive selling by spot traders, noting that this activity has created a disconnect between spot and derivative markets.
“We currently see a premium in perpetual futures as spot traders are selling heavily,” they explained.
CryptoQuant analyst Maartunn also flagged significant selling pressure on Coinbase, calling it the most intense since Bitcoin was priced at $66,000. The Coinbase premium has dropped to its lowest level in three months, signaling relentless sell-side activity.
Realized Losses Spike
The surge in selling has driven realized losses sharply higher. According to on-chain analyst Axel Adler Jr, Bitcoin’s realized losses over the last five days hit $28.9 million—320% above the weekly average for 2024. This level of realized losses has only occurred ten times this year.
Mid-term analysis of Bitcoin’s chart shows a bearish break of structure (BOS). However, a potential invalidation of this bearish sentiment could occur if Bitcoin manages to close a daily candle above $95,000.
Key Levels to Watch
Bitcoin briefly recovered above $95,000 in the 4-hour chart after touching $92,777, signaling an immediate bounce. For a more definitive shift in sentiment, analysts suggest that a sustained daily close above $95,000 is essential.
As the market watches these levels closely, the coming days will likely reveal whether Bitcoin’s current dip marks the end of its correction or the start of a deeper retracement.
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