Bitcoin’s ongoing price correction may be approaching its conclusion as realized losses peak significantly above their weekly average, according to recent market analysis. Traders believe the current BTC sell-off could soon stabilize, signaling a potential bottom for the cryptocurrency market.
Bitcoin’s Three-Day Price Drop Triggers Concerns
For the first time since early November, Bitcoin’s daily chart has recorded three consecutive red candles. Historically, this pattern coincided with retests of the 50-day Exponential Moving Average (EMA).
Since Bitcoin’s recent high, its price has dropped over 15%, leading analysts to believe the worst of the drawdown may be over. Independent crypto trader Captain Faibik noted on Dec. 20 that Bitcoin’s correction appears to be “almost done.”
Divergence Patterns Suggest a Bounce or Deeper Pullback
Captain Faibik attributed the current downturn to a massive bearish divergence between Bitcoin’s price and its relative strength index (RSI). This type of divergence often results in an 8%–10% price drop, which he described as a “healthy reset.” He expects Bitcoin’s price to rebound from the $94,000 range.
However, not all analysts share this optimism. Cold Blooded Shiller, another crypto trader, foresees a deeper correction based on similar divergence patterns. Comparing Bitcoin’s recent movements to January 2024, Shiller suggested that the sell-off could push prices as low as $85,000 if the trend persists.
Spot Selling Intensifies as Realized Losses Hit $28.9M
Spot market selling has added to the bearish sentiment. Byzantine General, a futures market analyst, observed a growing disconnect between spot and derivatives markets, driven by relentless selling pressure. Similarly, CryptoQuant analyst Maartunn highlighted the highest Coinbase selling activity since Bitcoin traded at $66,000, with the Coinbase premium plunging to a quarterly low.
The wave of selling has caused Bitcoin’s realized losses to surge. Over the past five days, realized losses reached $28.9 million, marking a 320% increase above the weekly average in 2024. This figure has been exceeded only 10 times this year, according to Bitcoin on-chain analyst Axel Adler Jr.
Key Levels to Watch for Bitcoin
From a technical standpoint, Bitcoin’s mid-term chart shows a bearish break of structure (BOS). However, a reversal may still be possible if Bitcoin manages to close a daily candle above $95,000. Traders are closely monitoring this level as a critical indicator of market direction.
While some analysts suggest the correction is nearing completion, others warn of potential downside risks. The coming days will reveal whether Bitcoin stabilizes or faces further selling pressure.
