Bitcoin's Technical Indicators Flash Warning: Understanding the Monthly Close

The latest monthly candle for Bitcoin , with a significant $12,000 wick above, presents challenges for bullish investors, hinting at potential downward pressure on the BTC price. This candle may signify another bearish month on the horizon.

Bitcoin continually battles to reverse its sideways and downward movements. It appeared poised for a breakout after Tuesday’s surge past the descending trendline, suggesting a possible escape velocity. Unfortunately, trading volume did not match the enthusiasm, as bears quickly pushed the price back beneath the ascending trendline, leaving BTC stuck as of Wednesday.

Two recent false moves, upward and downward, indicate a standstill. Yet, Bitcoin's price is now at the triangle's apex, suggesting an imminent decisive shift.

In the short term, BTC exhibits a series of progressively higher lows against sharper descending highs. Following dual fake-outs, the price is constricted to the triangle's narrow endpoint, poised for movement—be it up, down, or sideways. A downward trajectory would put the long-standing ascending trendline from 2021 to the test as a support zone.

Technically, given December’s unfavorable candle, the likelihood leans towards more sideways or downward movement. The market might experience uncertainty until late January, coinciding with Donald Trump's inauguration, sparking potential market shifts.

The monthly BTC chart highlights the concerning candle, potentially a shooting star—a candidate for signaling a downtrend's onset. The debate about its classification persists due to its longer top wick and relatively modest bottom wick. Should bearish trends dominate, Bitcoin may breach the ascending trendline, targeting the 0.382 Fibonacci level at $85,000 for a rebound. Additionally, retesting the low $70,000s could become a buying stronghold, foreboding high market activity if reached.