A fresh look at Bitcoin’s recent price action shows a notable shift in momentum, with three consecutive red candles on the daily chart marking a rare sequence not seen since the lead-up to a major political milestone. This pattern echoes a prior period when Bitcoin faced a similar configuration and subsequently retested the 50-day exponential moving average, suggesting a potential stabilizing moment even as resistance and volatility persist. In the wake of a decline that has erased a sizable portion of gains from the all-time high, analysts remain divided on whether the current correction is near completion or if a deeper pullback could still unfold. The combination of price action, RSI dynamics, on-chain activity, and market sentiment has created a complex, multi-faceted setup that traders are watching closely as they calibrate risk and identify potential entry or exit points in an environment characterized by heightened scrutiny of both spot and derivatives activity.
Bitcoin’s daily chart signals and historical parallels
Bitcoin’s most recent price action has produced a sequence of three consecutive red candles on the daily timeframe, a configuration that has attracted renewed attention from market observers because it has not appeared in such a form since the first week of November in a year marked by high-stakes political events. This pattern is particularly consequential when viewed through the lens of its historical resonance: the prior instance of three or more red candles on the daily chart coincided with a testing of the 50-day EMA, a level that has historically functioned as a significant dynamic support and resistance boundary for traders. The present setup has drawn comparisons to that earlier episode, with market participants watching for a potential retest of key moving averages and for any ensuing price reaction that could indicate renewed selling pressure or, alternatively, a buying opportunity if buyers step back into the market.
In the wake of Bitcoin’s decline from its all-time high—an appreciable move that now stands at more than 15% in drawdown—the consensus among some analysts is that much of the correction could already be behind us. One prominent trader who operates independently of mainstream exchanges, Captain Faibik, argued that BTC’s correction was nearing its conclusion as prices hovered around the $93,000 mark in late December. Faibik’s assessment centered on a noticeable bearish divergence between the price action and the relative strength index (RSI) that had persisted over the prior month, a pattern that traders apply to anticipate potential downside biases or resetting phases in the market. He suggested that such divergences typically precede a further sell-off in the 8% to 10% range, which, in his view, would be consistent with a “healthy reset” rather than a structural breakdown. The implication is that a bounce could materialize if the price can find support in the mid-$90,000 zone, with the expectation of a technical recovery that would keep the longer-term uptrend intact, assuming broader macro conditions do not deteriorate.
Conversely, Cold Blooded Shiller, another anonymous trader active in the community, offered a more bearish take by applying the same RSI-driven divergence framework to a more extended downside scenario. In a closely watched comparison to January 2024, Cold Blooded Shiller suggested that if the market followed a similar pattern, Bitcoin could experience a deeper correction, potentially driving price action down to around $85,000. This projection, if realized, would reflect a more entrenched retracement and a potential test of the lower half of the mid-$80,000 range, depending on how momentum and demand dynamics evolve in the face of ongoing selling pressure and potential shifts in risk sentiment across the broader crypto ecosystem.
Beyond these individual forecasts, industry observers have highlighted the ongoing tension between spot selling and derivatives pricing. Byzantine General, a futures market analyst, drew attention to persistent selling by spot holders and argued that the market is currently characterized by a “perp premium” that reflects the disconnect between spot liquidity and the derivatives arena. In this view, heavy selling pressure in the spot market is creating a misalignment with futures pricing, a phenomenon that can both reflect and amplify volatility as traders reprice risk and adjust hedging strategies in response to price shifts and liquidity conditions. This perspective underscores the complexity of the current phase, where multiple drivers—ranging from on-chain behavior to market microstructure—interact to shape Bitcoin’s near-term trajectory.
In parallel, Maartunn, a CryptoQuant analyst, stressed the magnitude of Coinbase-related selling pressure, noting that the current level of selling activity on Coinbase represents the most significant intensity since Bitcoin traded around $66,000. According to Maartunn, the selling pressure has been relentless, a characteristic that has been reflected in a marked decline in the Coinbase premium, which fell to a quarterly low. This dynamic points to a broader pattern of exchange-level liquidity being pulled from the market, a factor that can exacerbate price declines during periods of risk-off sentiment and can complicate the path to a sustainable rebound if new buyers remain scarce at the current levels.
In this context, the market appears to be weighing the interaction between on-chain selling pressure, exchange-specific dynamics, and the evolving sentiment of both retail and institutional participants. While some analysts emphasize the potential for a short-covering or mild bounce if price action stabilizes around key support zones, others warn that the combination of heavy spot selling and unfavorable macro cues could extend the downturn, at least in the near term. The ongoing discourse among traders reflects a broader conversation about how best to interpret RSI divergences, moving-average interactions, and the relative strength of spot versus derivatives markets in predicting the next major move for Bitcoin.
On-chain metrics, realized losses, and the pressure on sellers
As selling pressure intensified by the hour, on-chain metrics began to reflect mounting stress across market participants. The volume of realized losses—the losses embedded in coins that have moved from one address to another after being held for a period of time—reached notable levels as the week progressed. An on-chain analyst highlighted that Bitcoin’s realized losses over the preceding five days totaled approximately $28.9 million, representing a roughly 320% increase above the weekly average observed in 2024. This figure carries significance for traders and observers because realized losses can serve as a gauge of the distribution of losses among different cohorts of holders and may illuminate whether selling is concentrated among short-term holders who are taking quick losses, or if it is driven by longer-term investors rebalancing risk or trimming exposure in light of deteriorating price action.
The importance of realized losses in this context extends beyond a single data point. When losses surpass short-term averages by a wide margin, it can imply that the market is experiencing a period of elevated pain and potential capitulation or a capitulation-like event is forming. The dynamic is particularly relevant for market participants who use on-chain metrics to inform positioning and risk controls. As the handling of realized losses unfolds, traders may reinterpret the strength and durability of conviction among different market segments. This could influence whether a potential rebound is met with renewed demand or is overshadowed by ongoing willingness to accept losses and exit positions.
In conjunction with realized-loss signals, other on-chain indicators have painted a picture of a market under pressure. The combination of heavy selling volume and elevated realized losses aligns with a broader narrative of risk-off sentiment taking hold, at least temporarily. Traders watching these metrics may interpret the data as evidence of a liquidity squeeze or a flight from risk assets, which in turn could shape how market participants manage leverage, margins, and hedging strategies. The net effect is a market that remains vulnerable to further downside moves if selling accelerates, even as some observers point to potential tailwinds that could support a reversion if demand returns or macro conditions improve.
Technical structure, levels to watch, and potential reversal signals
From a technical perspective, mid-term charts suggested a bearish break of structure, a signal that has often preceded further downside in a risk-off environment. However, there are explicit levels that traders monitor for potential reversal or invalidation of the current bearish momentum. A key threshold identified by market analysts is the daily close above $95,000. If Bitcoin can sustain a daily close above this level, the immediate bearish bias could be dampened, and the path toward a more stable consolidation or upside continuation would gain traction. Conversely, a failure to hold above this zone would reinforce the bearish framework, potentially attracting more sellers and pressuring the price toward lower targets.
The 4-hour chart underscores the rapidity with which price action can shift in a condensed timeframe. In the most recent display, Bitcoin experienced a sharp fall to around $92,777 before forming an immediate recovery back above $95,000. This intraday recovery indicates that bulls still see value at higher prices, but it also highlights the fragility of the market as short-term traders react to micro-level price moves and liquidity conditions. For the bulls to gain credible traction, a daily candle closing decisively above $95,000 would be an important psychological and technical marker, signaling that buyers are willing to defend the higher ground and that the market might be ready for a more sustained bounce rather than a brief squeeze.
These technical considerations sit within a broader context of macro and micro market dynamics. The observed BOS—or bearish break of structure—on the mid-term chart is a warning that, absent a decisive reversal signal, the market could remain in a corrective phase for an extended period. Traders often use BOS as a prompt to reassess risk exposure, tighten stop losses, and contemplate hedging strategies that mitigate the potential for further drawdown. In addition to the price levels, traders pay attention to the volume profile and market depth around the $95,000 area. Above this price point, there may be more robust resistance that could slow a new rally unless accompanied by a significant pickup in buying demand or favorable catalysts that shift sentiment.
As the technical narrative evolves, market participants will also consider the interplay between chart patterns, moving-average dynamics, and cyclical timing tools. The combination of a potential backtest of the 50-day EMA seen in prior episodes with the current divergence signals can create a complex decision framework for traders. The situation invites careful analysis of whether any observed rally would be sustained or if price action would stall and re-enter a consolidation phase. For investors and traders who rely on technical cues, the overarching message is that key price thresholds, on a daily basis, will continue to serve as critical decision points. A close above $95,000 could shift the mood, while continued pressure near or below the $92,000–$93,000 band could leave the market susceptible to another leg down, particularly if accompanied by deteriorating on-chain signals or a renewed expansion of risk-off sentiment.
Market context: derivative dynamics, spot selling, and premium gaps
An essential dimension of the current setup is the relationship between spot markets and the derivatives arena. Market participants have observed that persistent selling pressure in the spot market can create a disconnect with derivatives pricing, an observation encapsulated in the concept of a perpetual premium or “perp premium.” When spot market activity intensifies selling pressure and prices move lower, the derivatives market can reflect a lag or a misalignment that may contribute to heightened volatility as traders attempt to manage risk and arbitrage the price differences between venues. This dynamic underscores the importance of monitoring liquidity distribution across exchanges and understanding how order flow and liquidity provisioning can shape short-term momentum.
The Coinbase exchange, in particular, has become a focal point for discussions about selling pressure and liquidity supply. CryptoQuant analysts have highlighted that Coinbase has seen unusually high levels of selling activity, with data pointing to the most intense selling there since Bitcoin traded around $66,000. The implications for price action are multi-faceted. A continued pattern of heavy exchange selling can drain demand, push bid depth further from the best offers, and increase the likelihood that subsequent price moves will be driven by smaller, more nimble traders who react quickly to price shifts. The downshift in the Coinbase premium—the difference between spot price and the platform’s premium—adds another layer of concern for traders who depend on a steady flow of buy-side liquidity to anchor rallies.
In a climate where on-chain signals and exchange data are giving mixed messages, traders must weigh multiple inputs to form a coherent view. The divergence between spot and derivative activity can create a delicate balancing act: if the spot market continues to drain liquidity, the probability of a rapid snapback may diminish unless new demand materializes swiftly. On the other hand, if buyers re-emerge with strength—perhaps in response to macro re-pricing, improved risk appetite, or a favorable shift in market sentiment—the same dynamics could produce a sharp reversal, especially if the price remains above critical support levels. In the absence of a clear, decisive catalyst, market participants may opt for a cautious approach, waiting for confirmation signals from price action, order-flow patterns, and on-chain metrics before committing to larger exposures.
Realized losses, risk management, and potential trading implications
The realized-loss metric adds a lens of risk awareness to the current market narrative. With the past five days generating approximately $28.9 million in realized losses, the data point signals a period of pain for holders who have chosen to sell into weakness or who have adjusted their positions in response to price declines. The reported figure—a magnitude that stood well above the weekly average and that has appeared only a handful of times this year—offers a tangible sense of the stress in the market and can influence the behavior of both short-term traders and longer-term investors. When realized losses breach such thresholds, there is a tendency for risk-averse participants to retreat further, potentially compounding downward momentum. This is especially true if the losses reflect liquidations or forced selling pressures that ripple through the order book.
From a trading perspective, this information can shape risk-management decisions. Traders might tighten stop losses, reduce position sizes, or hedge exposure to mitigate potential downside surprises in the event of renewed selling pressure. Conversely, bold traders may view the inundation of losses as a capitulation signal that could precede a bottom, particularly if price action exhibits a pattern of higher lows and higher highs after a period of pressure. The key is to observe whether the market can stabilize around established support ranges or whether the selling continues to cascade, pushing the price toward lower targets and testing the resilience of market participants who have built positions based on perceived value in the current price bands.
The broader risk environment also includes macro considerations, regulatory developments, and shifts in investor sentiment toward digital assets as a risk-on or risk-off asset class. While short-term catalysts like economic data releases or policy signals can drive volatile moves, the longer-term trajectory depends on a combination of on-chain dynamics, macro momentum, and the ongoing evolution of market infrastructure that supports liquidity and risk management. Market participants should remain mindful of the fact that realized-loss dynamics do not operate in isolation; they interact with price, liquidity, and the overall risk tolerance of the market, potentially shaping the amplitude and duration of any ensuing move.
Structural view: consolidation, key levels, and potential scenarios
Looking at the structural picture, Bitcoin is navigating a critical juncture where several technical and on-chain signals converge to map plausible future paths. The overall setup suggests a market that could enter a period of consolidation between established bounds or prepare for a continuation of the downside with a selective upside tilt only if demand returns with conviction. The critical threshold around $95,000 remains a focal point for traders: a daily close above that level would be interpreted as a counter-bias event that could pave the way for a steadier ascent, while failure to sustain above it would reinforce the current bearish narrative and push attention toward lower levels.
The immediate objective for bulls is to demonstrate strength through a daily close above $95,000 and to maintain intraday momentum that keeps prices above nearby resistance while carving out a sustainable uplift. In this frame, a successful retest of the $94,000 zone could act as a launching pad for a more confident rally if buyers show convincing demand and the broader market backdrop remains supportive. On the downside, the key risk remains a breach of the mid-$90,000 to low-$90,000 region, where buyers could be tested again, potentially catalyzing another wave of selling pressure if macro news or risk signals deteriorate further.
From a strategic standpoint, market participants may consider a range of approaches depending on risk tolerance and time horizon. For short-term traders, a focus on intraday price action around the $92,000–$96,000 corridor, with attention to volume and order-flow changes, could yield opportunistic trades if momentum signs persist. For longer-term investors, the emphasis shifts toward identifying whether the market holds critical support zones, how the RSI behaves relative to price, and whether accumulation or distribution patterns emerge over several weekly bars. A methodical risk-management framework, including predefined stop levels and position-sizing rules, becomes essential in navigating the volatility and protecting against abrupt reversals that could erase gains accrued during brief relief rallies.
The scenario also invites a broader contemplation of the market’s path forward in the context of ongoing macro developments, sentiment cycles, and structural shifts in the crypto ecosystem. If the market can sustain price action above the key level and if on-chain signals begin to reflect improved balance between selling pressure and buyer participation, the door could open for a measured recovery, potentially accompanied by a normalization of funding rates and a narrowing of the Coinbase premium. However, if selling persists and liquidity remains scarce, the risk of renewed downside increases, as does the probability of a more protracted consolidation phase that tests the resolve of market participants who have positioned for a rebound or a fresh leg higher.
Broader context: implications for traders and risk-aware strategies
In a market characterized by volatile price swings, the interplay of price action, RSI divergence, on-chain metrics, and exchange dynamics provides a multifaceted canvas for traders to interpret the risk-reward landscape. The situation calls for a balanced approach that integrates technical signals with a careful assessment of liquidity, market depth, and the evolving posture of both spot and derivatives markets. Traders who emphasize context-driven decisions—such as recognizing when a pattern resembles a prior corrective phase, validating signals across multiple timeframes, and respecting known support and resistance thresholds—are more likely to navigate the environment with fewer surprises.
For risk-conscious players, a prudent strategy might involve tiered exposure, where positions are staged into strength only after confirmation signals emerge and are supported by robust volume and momentum metrics. Conversely, more aggressive participants may seek to exploit temporary dips, provided they implement rigorous risk controls and have a clear plan for exiting if the market fails to sustain a bounce or shows signs of renewed, broad-based selling. In all cases, the emphasis should be on disciplined risk management, diversified exposure across correlated assets where appropriate, and a careful watch for developments that could alter the market’s sentiment, such as regulatory updates, macro data surprises, or shifts in institutional flow that could reorient risk appetite.
It is essential to reiterate that this analysis is intended for informational purposes and should not be construed as investment advice. The market remains influenced by a constellation of factors—price action, macro dynamics, on-chain activity, liquidity conditions, and trader psychology—that can change rapidly. Investors and traders should perform their own due diligence, consider their risk tolerance, and consult with financial professionals as part of a comprehensive strategy that reflects their individual objectives and constraints.
Conclusion
Bitcoin’s recent trajectory—highlighted by three consecutive daily red candles, a potential retest of the 50-day EMA, and a spectrum of diverging analyst interpretations—paints a picture of a market at a delicate inflection point. The convergence of on-chain stress indicators, Coinbase-specific selling dynamics, and persistent spot-versus-derivatives dislocation adds layers of complexity to the decision matrix for traders and investors. While some voices anticipate a near-term recovery with a bounce around the mid-$90,000s, others warn of a deeper dip toward the mid-$80,000s if the RSI-driven divergence proves durable and selling pressure remains broad-based.
Crucially, the path forward hinges on how price interacts with key levels—particularly a daily close above $95,000 to invalidate the immediate bearish thesis—and how on-chain and exchange metrics evolve in tandem with macro conditions. The market’s short-term mood will likely hinge on whether buyers can reassert control at the critical price juncture, supported by resilient liquidity and steadier demand from both retail and institutional participants. As always, participants should prepare for continued volatility, remain mindful of the potential for rapid shifts in risk sentiment, and maintain a disciplined approach to risk management as the narrative unfolds.
