Bitcoin Forms Shooting Star Pattern Indicating Potential Bearish Reversal
Bitcoin (BTC) price has recovered from lows of under $93,000 on January 1, gaining 5% and targeting a rally to $100K. However, BTC is forming a “shooting star” pattern on the technical chart, indicating potential selling pressure.
Expectations for 2025 suggest BTC could rally between $150K and $200K. Nonetheless, following Bitcoin's all-time high of $108K in December, it has faced significant selling pressure, resulting in negative monthly returns.
The shooting star pattern, characterized by a long upper wick and a small body, indicates a bearish reversal. In this case, the upper wick is nearly four times the size of the body, with a barely visible lower wick.
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Photo: TradingView
- This pattern shows that buyers initially pushed prices higher, but bears dominated later, pushing the price below the opening level. Following the uptrend from $70,000 to over $100K in Q4 2024, this shooting star suggests a possible bearish reversal.
A confirmation of this reversal would occur if prices fall below the December low of $91,186, a critical support level for bulls.
Where Is BTC Price Heading Next?
The shooting star formation coincides with macro developments indicating challenges for risk assets. This occurs amid the Fed's hawkish outlook for rate cuts in 2025 due to persistent inflation. Additionally, a rising US Dollar and Treasury Yield suggest caution in the short term.
Significantly, massive outflows from the BlackRock Bitcoin ETF indicate bearish sentiment among institutional investors. However, analysts remain optimistic that the Fed may reverse its recent stance, signaling fewer rate cuts for 2025, which could benefit BTC and other risk assets overall.