However, the emergence of a “shooting star” pattern on the Bitcoin price chart signals potential bearish pressure ahead.
Bitcoin BTC $107 529 24h volatility: 1.6% Market cap: $2.14 T Vol. 24h: $28.90 B price has shown a good recovery from the lows of under $93,000 on January 1 gaining 5% from there and eyeing a rally to $100K and beyond. However, BTC is forming a “shooting star” pattern on the technical chart which suggests that sellers are looking to strike once again.
Moving into 2025, expectations are high that BTC price will rally anywhere from $150K to $200K this year. However, this road couldn’t be as straightforward and bullish throughout. Following Bitcoin’s all-time high of $108K last month in December, the crypto asset has seen strong selling pressure with negative monthly returns.
This two-way price action has resulted in a bearish reversal candlestick pattern dubbed the “shooting star”. As shown in the below image, the candle is characterized by a long upper wick, indicating a significant gap between the high and the opening price for the period, alongside a small body that reflects a minimal difference between the opening and closing prices.
For such a formation, the upper wick must be at least twice the size of the body, with the lower wick being negligible or absent. In BTC’s case, the upper wick is nearly four times the size of the body, accompanied by a barely visible lower wick.
Photo: TradingView
The shooting star pattern shows that the buyers initially drove prices higher only for bears to dominate later and push the price below the opening level. Following the Bitcoin price uptrend from $70,000 to over $100K in Q4 2024, the shooting star pattern has emerged suggesting a potential bearish reversal.
Confirmation of this reversal would occur if prices fall below the December low of $91,186, a critical support level that bulls must defend.
Where Is BTC Price Heading Next?
The formation of the Bitcoin price shooting start aligns with the macro developments which show headwinds ahead for risk assets. This comes amid the Fed’s hawkish outlook for rate cuts in 2025 amid sticky inflation. On the other hand, a rising US Dollar and Treasury Yield hint at caution ahead in the short term.
Another major caution sign in the near term is the massive outflows from the BlackRock Bitcoin ETF this week hinting bearish sentiment among institutional players. Analysts remain optimistic that the Fed will reverse its recent stance signaling fewer rate cuts for 2025, paving the way for a bullish outlook for BTC and risk assets overall.
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