Bitcoin (BTC) kicked off 2024 on a strong note, briefly crossing the six-figure threshold. Many analysts remain optimistic about 2025, with forecasts suggesting BTC could reach $185,000 or beyond. However, recent price movements hint that the path forward may not be as smooth as anticipated, with sellers beginning to reassert control.
December’s price action serves as a cautionary signal. Despite hitting an all-time high above $108,000, Bitcoin ended the month below $94,000, marking its first monthly loss since August. This downward close formed a bearish reversal candlestick pattern known as the “shooting star” on the monthly chart.
A shooting star candlestick features a long upper wick, indicating a significant gap between the period’s high and open, paired with a small body that shows minimal difference between the open and close. In Bitcoin’s case, the upper wick was nearly four times the size of the candle’s body, with a barely visible lower wick.
This pattern suggests that while buyers initially pushed prices higher, sellers regained control near the peak, driving prices back down and signaling potential bearish momentum ahead. According to the CMT Association’s Level III textbook, a shooting star indicates that “bears are potentially in control.”
The bearish signal becomes more significant given Bitcoin’s preceding uptrend from $70,000 to over $100,000. If BTC falls below December’s low of $91,186, it would confirm a bearish reversal, making this level crucial for bulls to defend.
Historically, similar candlestick patterns with extended upper wicks have coincided with major market tops during previous bull cycles.
Macroeconomic Headwinds
The current caution aligns with broader macroeconomic signals. Hawkish projections from the U.S. Federal Reserve, rising Treasury yields, and a strengthening U.S. dollar index (DXY) are creating a challenging environment for risk assets like Bitcoin.
Despite these short-term headwinds, some analysts remain optimistic. They predict the Federal Reserve will eventually adopt a more dovish stance in early 2025, which could reignite bullish momentum for Bitcoin and other risk assets.
“My prediction for 2025 is simple: higher. Nothing has fundamentally changed since Nov. 5. February will be the best-performing month, with the recent Fed hawkishness still holding broader markets back short-term,” said trader and analyst Alex Kruger on X.
Kruger expects the Fed to shift dovish in Q1, leading traders to reprice expectations for rate cuts and providing support for BTC’s upward trajectory.
In summary, while Bitcoin’s long-term outlook remains positive, the recent bearish candlestick pattern and macroeconomic factors suggest caution in the short term. The $91,186 support level will be critical in determining the market’s next major move.
