Bitcoin (BTC) started the new year on a high, reaching the six-digit level in 2024. Most observers expect 2025 to be similarly remarkable, with BTC predicted to reach $185,000 and higher.

However, the path may not be as directly bullish as expected, as recent price movements suggest that sellers are trying to re-empower themselves, increasing the possibility of a significant price decline in the near future.

Here we mean Bitcoin’s price action, which broke a record high above $108,000 in December and ended the month on a negative note below $94,000, recording its first monthly loss since August.

The two-way price action created a bearish reversal candlestick pattern called a “shooting star” on the monthly chart.

This candlestick has a long upper shadow that reflects the significant difference between the high and the open in the given period, while it comes with a small body that represents the minimal difference between the open and close.

The ratio of the shadow to the body should be at least twice, and the lower shadow is usually very small. In BTC’s case, the upper shadow is almost four times the size of the body and the lower shadow is quite small.

The shape of the shooting star formation indicates that buyers initially tried to push prices higher, but sellers took control at higher levels and pushed prices below the opening level, which may lead to a renewed downward trend in the market.

“The bears are potentially in control,” says the CMT Association’s Level III textbook, explaining the psychology of the shooting star formation.

The shooting star emerged after a remarkable rise from $70,000 to over $100,000, indicating a potential bearish reversal in the coming period.

This will be confirmed if prices fall below December’s $91.186 low, which will be the point to defend for the bulls.

Similar long upper shadow candles have marked previous bull market tops. The latest shooting star’s cautious message aligns with the broader macroeconomic landscape and suggests there could be challenging times ahead for risky assets. This is largely driven by recent hawkish signals from the Fed, rising Treasury yields and a strengthening dollar index.

However, analysts are confident that the Fed will reverse its decision to signal fewer interest rate cuts for 2025, creating a broad bullish trend for BTC and overall risky assets.

My prediction for 2025 is simple: Higher. There has been no fundamental change since November 5th. February will be the best-performing month, although broad markets will be pressured in the short term due to the latest Fed hawkishness,” says trader and analyst Alex Kruger at X.

“The Fed will take a dovish tone again in Q1 and traders will price in further rate cuts,” says Kruger.