Bitcoin (BTC) entered 2024 on a strong note, briefly surpassing the six-figure milestone. With forecasts predicting BTC could reach $185,000 or higher by 2025, optimism remains high among investors. However, recent price action signals potential hurdles ahead, as sellers appear to be regaining control.

In December, Bitcoin hit an all-time high above $108,000 but ended the month below $94,000, marking its first monthly decline since August. This two-way movement resulted in a bearish reversal candlestick pattern known as the “shooting star” on the monthly chart.

A shooting star pattern typically consists of a small body and a long upper wick, representing a significant gap between the period’s high and opening price. The upper wick must be at least twice the length of the body, with a minimal lower wick. In Bitcoin’s case, the upper wick was nearly four times the size of the body, while the lower wick was barely noticeable.

This formation suggests buyers initially drove prices higher, but sellers ultimately gained control and pushed prices below the opening level. According to the CMT Association’s Level III textbook, this pattern often indicates a shift in momentum, with bears potentially taking the reins.

The shooting star emerged following a strong uptrend from $70,000 to over $100,000, raising the risk of a bearish reversal. Confirmation of this reversal would require Bitcoin to drop below December’s low of $91,186, a critical level for bulls to defend.

Historically, similar candlestick patterns with pronounced upper wicks have preceded major market tops in previous bull cycles.

Macro Challenges Ahead

The bearish implications of the shooting star align with broader macroeconomic challenges. Hawkish signals from the Federal Reserve, rising Treasury yields, and a strengthening U.S. dollar index (DXY) are adding pressure to risk assets, including Bitcoin.

However, some analysts remain optimistic about the bigger picture. Trader and analyst Alex Kruger believes the Federal Reserve may reverse its stance on rate cuts in early 2025, providing relief to financial markets.

“My outlook for 2025 remains bullish. February is likely to be a standout month, even though current Fed hawkishness continues to weigh on short-term performance,” Kruger said on X. “I expect the Fed to adopt a more dovish stance in Q1, which will drive renewed momentum in BTC.”

While the shooting star pattern raises caution flags in the near term, long-term optimism persists, with many analysts viewing any pullback as a potential buying opportunity in anticipation of further upside in 2025.