Bitcoin’s daily chart has produced three consecutive red candles for the first time since the first week of November, a period that also marked the run-up to a major political milestone in the United States. This repetition of back-to-back declines echoes a prior moment on the chart when Bitcoin (BTC) faced a similar sequence of downward candles, and it coincided with a retest of the 50-day exponential moving average (EMA). The recurrence of this price action invites a careful look at the current setup, the near-term targets, and the potential implications for traders and investors who monitor both price action and technical signals.
Bitcoin’s 1-day chart and the ongoing price movement have become focal points for market participants wrestling with the question of whether the current decline represents a temporary pullback or the onset of a more meaningful correction. In the wake of a drawdown that has pushed BTC’s price down by more than 15% from its all-time high, analysts are offering divergent interpretations of how much further downside remains and how soon a meaningful rebound might occur. The sequence of red candles after a recent peak has placed the market at a critical juncture, with traders watching for key support zones and potential reversal catalysts.
Price action, technical levels, and chart patterns
Bitcoin’s recent price action has unfolded with rapid downside momentum, punctuated by a sharp move that breached a notable psychological threshold. As the price tracked southward, many market observers highlighted the proximity to the 50-day moving average as a critical reference point. The repeated interaction with this indicator—specifically, a retest after a period of decline—serves as a reminder of the EMA’s role in framing short- to medium-term market sentiment. In addition to these dynamics, traders noted the impact of broader price swings on daily volatility and how sentiment can swing as BTC tests support and resistance levels that have historically influenced subsequent moves.
In the current environment, Bitcoin’s price has slipped below $93,000 on a notable date in December, prompting analysts to re-evaluate the trajectory of the correction. A key feature of the recent analysis has been the expectation that the price may stage a bounce in the vicinity of the $94,000 level, a zone that has previously served as a pivot point in recent market action. This expectation is grounded in a combination of pattern recognition on the 1-day chart and the observed price response to short-term support near that level. The thought process is that a rebound from this range could mark a transition from the immediate pullback phase to a more stable consolidation before the next directional move unfolds.
In parallel, a different interpretation has emerged from another segment of the trading community. Some analysts have suggested that the current divergence pattern—specifically, a bearish divergence between BTC’s price action and the relative strength index (RSI) over the past month—could presage a deeper correction. This line of reasoning draws on classical technical analysis concepts: when price makes lower highs while the RSI fails to confirm, the resulting divergence can indicate weakening momentum and a higher probability of further downside in the near term. In this framing, the sell-off could extend beyond the initial wave of losses if the divergence remains pronounced and if momentum signals continue to deteriorate.
On the chart, the market has also been watching the behavior of low-timeframe candles for signs of capitulation or resilience. A four-hour chart can reveal the immediacy of buyer and seller dynamics in the wake of a sharp move, including the possibility of a brief recovery or a continuation of the downside trend. The 4-hour structure often provides a bridge between the longer daily perspective and the granular action that occurs within a trading session. While the longer-term thesis hinges on daily closes, the near-term price action on the 4-hour timeframe contributes to the evolving picture of whether the market is setting up for a continuation of the correction or a stabilization that could precede a new leg higher.
Divergence signals and analyst readings
One prominent analyst, known for his independent approach to crypto markets, has highlighted the notion that Bitcoin’s correction is approaching a conclusion. His assessment centers on a substantial bearish divergence observed between Bitcoin’s price movement and its RSI over the past month. In a post on a social platform, he argued that such divergences are typically followed by a corrective move in the 8% to 10% range, which he characterizes as a “healthy reset” rather than a sustained, extended drawdown. Based on his expectation that BTC could find support in the neighborhood of the mid-$90,000s, he envisioned a bounce from the $94,000 zone as a plausible near-term outcome, with the caveat that the market would need to demonstrate resilience beyond that level for the correction to be considered largely exhausted.
In contrast, another trader has suggested a more bearish alternative grounded in the same RSI divergence pattern but projecting a deeper pullback. The anonymous trader, who goes by the moniker Cold Blooded Shiller, drew a parallel to conditions seen in January 2024. His assessment implies that if history rhymes with the current price action and divergence, BTC could slide to as low as around $85,000. This view emphasizes the potential for a more extended retracement, underscoring the risk that the present decline might not be near its end.
Beyond individual price action and RSI signals, market participants have pointed to the broader activity within the spot market as a contributing factor to the dynamics at play. A futures market analyst known for his focus on derivatives and spot market interactions noted persistent selling pressure from spot holders. He observed that there is a notable premium in the perpetual (perp) market, which indicates that the spot market’s selling pressure is translating into a disconnect from the derivatives market. This perspective suggests that the spot price momentum is not fully aligned with the broader derivatives-based sentiment, a misalignment that can influence risk calculations for traders and fund managers who operate across both markets.
A further data-driven view came from a CryptoQuant analyst who highlighted the magnitude of Coinbase’s selling activity in this phase of the market. According to the analyst, this period represents the most intense Coinbase selling activity since Bitcoin traded around $66,000—a reminder that exchange-level dynamics can intensify price pressure when buy-side demand is insufficient to absorb selling capacity. The observation of a Coinbase premium receding to a quarterly low further underscores the current stress in the exchange ecosystem and its potential impact on price discovery.
On-chain metrics, realized losses, and market stress
As the market navigates the interplay between price action and on-chain signals, the thread of realized losses has grown increasingly salient. Realized losses—the portion of losses that have been realized through the sale of coins rather than simply fluctuating unrealized marks—have surged in tandem with rising selling pressure. In the recent phase, the volume of realized losses reached a notable level, reflecting the impact of an hour-by-hour acceleration in selling activity. An on-chain analyst highlighted that the realized losses accumulated over the past five days reached approximately $28.9 million, a figure that stands roughly 320% above the weekly average for 2024. This data point is significant because it marks a threshold that has only been achieved limited times within the year, suggesting that the current period represents an unusual level of realized loss activity relative to the typical weekly pattern.
The synthesis of on-chain data with price action points to a more nuanced narrative: while price could be stabilizing in some scenarios, the on-chain reality shows substantial currency removal from exchanges and a wave of realized losses that underscores the seriousness of the current drawdown. The comparatively elevated level of realized losses signals that some segment of the market may be capitulating or rebalancing portfolios in response to the drawdown, which can, in turn, influence subsequent price behavior as market participants reassess risk and exposure.
In analyzing mid-term price structure, traders observed a bearish break of structure (BOS) on the chart. A BOS on the mid-term view is often interpreted as evidence of a shift in market momentum and a potential precursor to further downside or a prolonged consolidation phase. Yet, within this same framework, there is an important counterpoint: the presence of a clear invalidation level for a reversal. Specifically, if Bitcoin continues to close a daily candle above $95,000, the bearish sentiment would be called into question, and the path toward a more pronounced reversal would gain credibility. This duality—an ongoing bearish structure coupled with an unmistakable hurdle for reversal—speaks to the complexity of the current setup and the need for traders to monitor both immediate candle closes and more sustained daily price dynamics.
On the four-hour chart, the immediate picture shows a modest recovery above the $95,000 level after a drop to around $92,777. The recovery in the shorter timeframe offers a glimpse of the micro-level dynamics that can presage a broader move, but the persistent question remains: what would constitute a more definitive reversal signal? In the current landscape, a daily candle closing above $95,000 would likely be a necessary condition—though possibly not sufficient on its own—for removing the near-term bearish bias and paving the way for a potential trend shift.
Market structure, derivatives, and the liquidity backdrop
The interplay between spot market activity and derivatives pricing has emerged as a distinct feature in recent market observations. Analysts have highlighted the disconnect that can arise when spot selling intensifies, causing the perpetual market to show different pressure than the spot price might suggest. In this context, a perpetual contract premium is observed, which may be driven by the fact that spot selling is compressing price action while derivatives dynamics reflect ongoing demand and hedging pressures. This divergence can complicate risk management for traders who rely on cross-market signals and can contribute to a sense of inconsistency between short-term price action and longer-term sentiment.
An additional dimension of market behavior has been the robust level of exchange-derived selling activity, particularly on major platforms. The emphasis on exchange flows—especially the Coinbase ecosystem—speaks to the importance of understanding exchange-specific dynamics in addition to broader on-chain metrics. When exchange flows become a dominant driver of price movement, the resulting volatility can be more pronounced, and the ability of market participants to gauge intraday risk can be constrained by abrupt shifts in execution liquidity and the availability of bids and asks at various levels.
In parallel with exchange activity, traders have noted that the current price action is occurring within a context of macroeconomic uncertainty and shifting market expectations. The price regime in which BTC finds itself is one characterized by a delicate balance between ongoing risk appetite and the caution embedded in market participants’ risk controls. The combination of RSI divergences, a bearish mid-term structure, and on-chain indicators such as realized losses creates a tapestry of signals that traders interpret with a mix of technical discipline and pragmatic risk assessment. This blend of factors helps explain why some market observers advocate for patience and selective exposure, particularly around key price junctures and levels that have historically aligned with meaningful price moves.
Coinbase activity, on-chain liquidity, and implications for price discovery
The narrative around Coinbase’s activity has come to the fore as a telling indicator of how exchange behavior interacts with broader price dynamics. In the current cycle, Coinbase’s selling pressure appears to be robust enough to be described as among the most intense in recent memory, given that the level of activity contrasts with the historical baseline observed during price regimes around previous all-time highs. The analysis points to an ongoing stress in the exchange environment, with the Coinbase premium diminishing to a quarterly low. This development is interpreted as a sign that selling pressure within the Coinbase ecosystem remains a key driver of price action.
The broader implication of Coinbase activity for price discovery is that it can shape traders’ expectations about near-term support and resistance levels. If exchange selling remains persistent, the market may experience continued downward pressure on BTC’s price, particularly if demand from buyers does not increase to absorb the selling flow. Conversely, should the exchange dynamics shift—whether due to macro conditions, improved risk sentiment, or a renewed appetite to accumulate at lower levels—the price could stabilize and potentially begin a constructive rebound. The interaction between exchange liquidity and on-chain behavior remains a central factor in understanding BTC’s path forward.
Investor sentiment, risk management, and the path ahead
Against the backdrop of three consecutive daily red candles, RSI divergence, and the juxtaposition of on-chain losses with exchange-level selling pressure, market participants face a multifaceted decision matrix. For some traders, the prospect of a bounce from the mid-$90,000 range offers a compelling tactical opportunity, particularly if a daily close above the $95,000 threshold can be achieved. For others, the possibility of a deeper correction, potentially down to the mid-$80,000s contingent on historical pattern replication, remains in play as a credible scenario to prepare for with appropriate risk controls.
The current environment also invites consideration of preparedness for a range of outcomes, including the potential for volatility to persist in the near term. The presence of bearish structure on the mid-term timeframe, coupled with the risk of a reversal invalidation if price fails to clear certain levels, emphasizes the need for disciplined risk management. Traders who rely on price action and on-chain signals should closely monitor the evolution of the RSI, the behavior of the 50-day EMA, and the daily and 4-hour candle closes around critical levels such as $95,000 and $94,000. The convergence or divergence of these indicators over successive sessions will be a valuable guide to whether the market is transitioning into a more constructive phase or continuing to test lower support.
From a broader market perspective, the ongoing discussion among analysts around whether BTC is nearing the end of its correction or entering a more extended consolidation phase underscores the inherent uncertainty that accompanies major asset cycles. The divergence of opinions among respected voices reflects the complexity of interpreting a combination of price action, momentum indicators, on-chain metrics, and exchange-level activity. In such environments, diversification of strategy, careful position sizing, and a focus on risk tolerance become essential components of an effective approach.
Traders and observers should also consider the macro context and how it might influence risk appetite in the crypto market. While technical patterns provide a framework for likely price trajectories, the arrival of new macroeconomic data or shifts in policy expectations can quickly reframe the risk-reward calculus. As such, remaining adaptable and prepared for rapid changes in sentiment is a prudent stance for those who engage with Bitcoin markets on a day-to-day basis.
Conclusion
In summary, Bitcoin’s recent behavior on the daily chart—three consecutive red candles, a pronounced decline of more than 15% from its all-time high, and a series of complex interactions among RSI divergence, EMA dynamics, and on-chain activity—paints a picture of a market at a crossroads. Analysts offer a spectrum of scenarios, from a relatively near-term recovery with a bounce near the $94,000–$95,000 area to the possibility of a deeper sell-off that could test support near the mid-$80,000s, depending on how the divergence pattern and momentum signals unfold in the coming sessions. The market’s current dynamics are shaped by a mix of spot selling pressure, derivatives behavior, and exchange-level activity, with Coinbase’s trading activity underscoring a broader theme of liquidity-driven price discovery. As BTC navigates this volatility, a decisive daily close above $95,000 would be a meaningful signal for potential reversal, while continued closes below that level could sustain the bearish bias in the near term. Investors and traders will continue monitoring RSI, realized losses, and the evolving balance between spot and derivatives markets to gauge the trajectory of Bitcoin in the weeks ahead.
