Bitcoin has entered a telling phase of the current cycle, with the daily chart printing three consecutive red candles for the first time since the first week of November. That stretch of selling arrived just as the calendar turned toward year-end trading, a period historically associated with heightened volatility. The three-day downside sequence echoes a pattern observed in a prior market phase when Bitcoin also revisited the 50-day exponential moving average, a key gauge used by traders to gauge intermediate-term momentum and trend strength. The price move comes after Bitcoin had already retraced more than a fifth of its all-time peak, underscoring a broad wave of profit-taking and caution reverberating through the market. As traders digest this sequential decline, the emphasis remains on how the asset responds to a pivotal price juncture near the 50-day EMA, and what that response could signal about subsequent price direction.
In the context of price action, Bitcoin’s recent trajectory also highlights the ongoing tug-of-war between momentum and mean reversion. The immediate narrative centers on whether the current dip marks a temporary pause within a broader up-and-down cycle or a more persistent price weakness that could test newly established support levels. The three consecutive red candles on the daily frame stand out not merely as a standalone event but as part of a broader pattern that market participants have watched closely since early November. The proximity to the 50-day EMA adds a layer of technical significance: if BTC holds above this dynamic average, bulls may view it as a bullish validation of the trend’s resilience; if it fails to sustain, bears could seize on the breakdown as an opportunity to push prices lower. Traders will also scrutinize the interplay between price and volatility, as shifts in the 50-day EMA often accompany shifts in market psychology and risk appetite.
Key levels and reference points remain under close watch. Bitcoin’s price has fallen by more than 15% from its all-time highs, a correction that has attracted diverse interpretations among market observers. The decline has tested traders’ nerves and prompted a range of assessments about how much of the drawdown remains in the pipeline. In the near term, attention centers on whether a bounce could materialize from current levels or whether renewed selling pressure could extend the downside. The price is tracking near critical thresholds, with the 50-day EMA acting as a meaningful line of demarcation in the eyes of many technicians. The immediate question for traders is whether the setup will yield a healthy reset courtesy of a short-term rebound, or whether it will evolve into a deeper correction that consumes more of the gains realized earlier in the cycle.
Analysts and traders have begun to articulate near-term scenarios grounded in historical behavior and technical signals. One prominent market observer, Captain Faibik, who operates as an independent crypto trader, suggested that Bitcoin’s correction is nearing its conclusion as price action trades under the $93,000 mark on December 20. In an X post, Faibik pointed to a pronounced bearish divergence between Bitcoin’s price and its relative strength index (RSI) over the preceding month. Such divergences—where price makes new lows while RSI fails to do so—are often interpreted as precursory signals of a momentum shift, typically followed by an 8% to 10% decline labeled as a “healthy reset.” According to Faibik’s analysis, the current downside pressure could wane if price gains constructive footing and begins to rebound from the $94,000 zone, an area highlighted in the accompanying chart as a potential springboard for renewed buying interest. The emphasis on the RSI divergence underscores a broader market concern: that momentum behind the rally has cooled enough to warrant a pause or consolidation before the next move.
In contrast to Faibik’s more cautious optimism, another respected trader in the crypto space, Cold Blooded Shiller, withholds near-term optimism and argues for a deeper pullback based on the same divergence signal. By drawing a parallel to January 2024, the trader warned that a pattern mirroring that earlier episode could unfold again, setting the stage for Bitcoin’s price to extend its decline toward as low as $85,000 if selling pressure persists and the market fails to establish a robust buying interest at higher levels. The tension between these two viewpoints reflects a broader market dynamic in which divergent interpretations of the same technical indicators coexist, illustrating how traders weigh risk and reward differently within the same price framework. The debate is further amplified by the behavior of spot market participants, whose actions can amplify or dampen the trajectory as the price tests critical thresholds.
Meanwhile, another notable voice in futures market analysis, Byzantine General, highlighted ongoing selling pressure from spot holders and framed it within the context of derivatives pricing. The analyst observed that there is “a perp premium at the moment because spot is selling off so much it’s disconnecting from the derivatives market.” This observation points to a structural dynamic where spot selling creates a misalignment with the derivatives market, potentially signaling that traders are pricing risk differently on the two sides of the market. In practice, such an apparent dislocation can influence hedging activity and broader market sentiment, especially if it persists across multiple sessions and creates a feedback loop that reinforces selling in the near term. The discussion around the perpetual funding rate or “perp premium” adds a layer of complexity to the interpretation of price action, as it suggests that futures traders might be operating under different stressors than those participating in the spot market.
On-chain analytics also reflect a market under stress, with analysts noting that selling pressure in the spot market has coincided with notable realized losses on the network. Maartunn, a well-known CryptoQuant analyst, described the current environment as the most significant Coinbase selling activity observed since Bitcoin last traded near $66,000. The implication is that exchange outflows and inflows are contributing to a sustained pressure on price, as traders convert or withdraw holdings in response to risk signals and price uncertainty. The Coinbase premium—the difference between on-chain exchange rates and broader market pricing—has declined to a quarterly low, underscoring a shift in market mechanics where immediate selling and liquidity considerations are moving in sync with price declines. The combination of elevated selling pressure and a compressing Coinbase premium signals an environment where buyers must step in decisively to halt the downtrend or risk further retracement toward lower support bands.
The on-chain narrative extends to the broader measurement of how capital is being realized and realized losses are distributed across the market. In a notable development, Bitcoin’s realized losses over the most recent five days surged to $28.9 million, a figure that represents approximately 320% above the weekly average for 2024. The swing in realized losses signals that market participants are actively taking profits or cutting losses in response to volatility, thereby generating a temporary but meaningful drain on the network’s capital flow. The fact that the $28 million milestone has been crossed only ten times within the current year indicates that the present level of realized losses is relatively exceptional and warrants careful monitoring by traders and risk managers. This on-chain metric provides an alternate lens through which to view price action, complementing the traditional price charts with an aggregate view of how capital is actually being realized in response to price movements.
From a technical perspective, the mid-term chart analysis reveals a bearish break of structure (BOS), indicating that the price action has broken a previously established trend framework. While this break is significant, there remains a clear invalidation level that would diminish bearish momentum: if Bitcoin closes a daily candle above $95,000, the current bearish thesis would lose some of its credibility. On the 4-hour chart, Bitcoin has managed to recover above $95,000 after dipping briefly to around $92,777, signaling that volatility remains high but that buyers have found some footing at elevated levels. The critical takeaway is that for the bearish sentiment to be decisively nullified, a sustained daily close above $95,000 would be expected, ideally accompanied by follow-through in the subsequent sessions. The price action around these levels will likely set the tone for near-term directional bets and risk assessment across trading desks.
In this environment, traders are watching a few core themes with heightened interest. First, the immediate bounce zone around the $94,000 range has become a focal point for positioning, with bulls hoping for a fast relapse to a more comfortable bid area and bears aiming for a continuation of the down-leg that began earlier in the month. Second, the potential path to $85,000—if the lower-range scenario materializes—rests on sustained weakness and a failure to establish new baselines of demand above the 95,000 threshold. Third, the dynamics of the spot market versus derivatives, including the role of the Coinbase premium and perp funding rates, add another layer of complexity to the equation, illustrating how market microstructure can influence price trajectories beyond simple price-action patterns. Each of these themes contributes to a broader narrative about risk, return, and liquidity in Bitcoin trading as the market navigates a period of elevated volatility.
Given the current landscape, the most prudent approach for market participants is to consider both the technical setup and the on-chain context in tandem. On the technical front, the key is whether the price can sustain a daily close above critical thresholds, particularly above $95,000, to invalidate the current bearish projection. A decisive close beyond that level would not guarantee an immediate reversal but would significantly reshape traders’ risk expectations. Conversely, failure to reclaim the $95,000 ceiling could sustain a risk-off environment where further downside remains plausible, especially if the 4-hour recovery does not translate into sustained daily strength. On-chain metrics, including realized losses and exchange-specific activity, offer additional pressure gauges that complement the price-driven narrative. In combination, these factors inform a nuanced risk framework that helps traders calibrate entries, stops, and position sizing in a market characterized by high volatility and rapid sentiment shifts. As always, investors should remain mindful of the broader macro backdrop and any developing catalysts that could alter the balance between risk and reward in the Bitcoin market.
Conclusion
Bitcoin has entered a consequential phase, with three consecutive daily red candles highlighting ongoing weakness in the near term while the market weighs a diverse array of technical, on-chain, and microstructural signals. The simultaneous proximity to the 50-day EMA and the appearance of a bearish divergence between price and RSI have created a scenario in which a bounce remains plausible but is far from guaranteed. The perspectives of individual analysts illustrate a spectrum of potential outcomes: from a near-term correction that may be near its end and a bounce around the 94,000 level to a more extended depreciation toward the mid-80,000s if conditions align with January 2024’s pattern. The dialogue surrounding spot selling versus derivatives dynamics, including the presence of a perp premium and the evolving Coinbase premium, adds a critical layer of complexity to price discovery in the Bitcoin market, suggesting that liquidity and market structure are playing meaningful roles in shaping price trajectories.
Meanwhile, on-chain activity—seen in the elevated realized losses and the notable Coinbase selling activity—indicates that market participants are actively reassessing risk and reallocating capital as volatility remains elevated. The bearish break of structure on the mid-term chart underscores the fragility of the current uptrend and highlights a pivotal threshold at $95,000 that could determine whether the market sustains its current direction or pivots toward a new regime. Traders should monitor how price responds to the $95,000 area, the behavior of the 50-day EMA, and the cadence of buying interest around the $94,000 region, all of which will help define the trajectory over the coming sessions.
In sum, Bitcoin’s near-term outlook remains a balance between potential resilience and risk of renewed weakness. The combination of three red daily candles, RSI divergence, and the weight of on-chain and market microstructure signals will likely dictate the tone of price action in the weeks ahead. Market participants should prepare for continued volatility and maintain disciplined risk controls as BTC tests critical levels and navigates the evolving landscape of spot versus derivatives dynamics. The coming moves will not only reflect pure price action but also the complex interplay of investor sentiment, liquidity flows, and technical thresholds that define the ongoing Bitcoin price discovery process.
