Bitcoin traders’ realized losses have likely peaked, which could signal a bottom for the current BTC price decline.
Bitcoin’s BTC ticks fell to $96,685 on the daily chart, marking the first time since the first week of November that it had three consecutive red candlesticks. This week happened to be the period before Donald Trump’s US election victory.
Another similarity to the last time three or more red candlesticks were observed on the daily chart is that Bitcoin retested the 50-day EMA level.
BTC price has fallen more than 15% from its all-time high, with one analyst saying the biggest drop may be over for the largest cryptocurrency.
Bitcoin correction “almost complete,” analyst says
Bitcoin price dipped below $93,000 in December. On the 20th, independent crypto trader Captain Fibick said that BTC’s correction is nearing the end.
In a post on X, the trader highlighted that BTC’s current decline is due to a significant bearish divergence between BTC price and the Relative Strength Index (RSI) from last month. Typically, such a divergence is followed by an 8% to 10% drop, which is considered a “healthy reset.”
The trader expected the price to bounce back from the $94,000 area.
On the contrary, anonymous crypto trader Cold Blooded Shiller predicted a sharper drop in Bitcoin based on the same divergence pattern. The trader compared BTC’s current price action to January 2024 and said that if the outcome is similar, BTC’s decline could drop to $85,000. Meanwhile, futures market analyst Byzantine General highlighted the constant selling by spot holders. The analyst said:
“Spot is really selling at a premium at the moment because it’s so heavily sold and decoupled from the derivatives market.”
In fact, CryptoQuant analyst Maartunn said this is the most significant selling activity on Coinbase since Bitcoin was listed at $66,000. The selling pressure is “relentless” as Coinbase’s premium falls to a quarterly low.
Bitcoin’s real losses hit $28.9 million
As selling pressure grows hour by hour, realized losses also peaked above the weekly average. Bitcoin on-chain analyst Axel Adler Jr. highlighted that realized BTC losses over the past five days have reached $28.9 million, 320% higher than the weekly average in 2024. It has only surpassed 28 million 10 times this year.
Analysis of the mid-term Bitcoin chart reveals a bearish structural break (BOS). However, if Bitcoin continues to close the daily candle above $95,000, the reversal will obviously be invalidated.
As can be seen from the chart, the 4-hour candle dropped to $92,777 before quickly recovering above $95,000. It would be ideal for Bitcoin to see a daily candle above $95,000 to invalidate the bearish sentiment.
