Key Points
- Bitcoin’s price is showing a “shooting star” pattern, indicating potential selling pressure.
- Despite the bearish signal, expectations for Bitcoin’s price remain high, with predictions of a rally to $150K-$200K.
Bitcoin’s price has recently shown signs of recovery, rising from under $93,000 on January 1 to nearly $100k. However, a “shooting star” pattern on the technical chart is appearing, indicating potential selling pressure.
As we move into 2025, predictions for Bitcoin’s price are optimistic, ranging from $150K to $200K. Despite the bullish outlook, the path to these figures may not be straightforward. After reaching an all-time high of $108K in December, Bitcoin experienced strong selling pressure, resulting in negative monthly returns.
Understanding the Shooting Star Pattern
This fluctuation in price has resulted in a bearish reversal candlestick pattern known as the “shooting star”. This pattern is characterized by a long upper wick, indicating a significant gap between the high and opening price for the period, alongside a small body that reflects a minimal difference between the opening and closing prices.
For this pattern to form, the upper wick must be at least twice the size of the body, with the lower wick being negligible or absent. In Bitcoin’s case, the upper wick is nearly four times the size of the body, accompanied by a barely visible lower wick.
The shooting star pattern suggests that buyers initially drove prices higher, only for bears to dominate later and push the price below the opening level. After Bitcoin’s price uptrend from $70,000 to over $100K in Q4 2024, the shooting star pattern emerged, indicating 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.
What’s Next for Bitcoin?
The formation of the Bitcoin price shooting star coincides with macro developments that suggest potential challenges for risk assets. This is due to the Fed’s hawkish outlook for rate cuts in 2025 amid sticky inflation. Additionally, a rising US Dollar and Treasury Yield suggest caution ahead in the short term.
Another cautionary sign is the significant outflows from the BlackRock Bitcoin ETF this week, indicating bearish sentiment among institutional players. However, analysts remain optimistic that the Fed will reverse its recent stance, signaling fewer rate cuts for 2025 and paving the way for a bullish outlook for Bitcoin and other risk assets.
