Bitcoin ‘spinning top’ candle targets $115K after recent 15% BTC flash crash

Bitcoin’s (BTC) price has swiftly recovered above $100,000 after a flash crash cast a wick down to $90,500 on Dec. 5.

*Bitcoin 4-hour chart. Source: Cointelegraph/TradingView*

Despite the 14% plunge from its all-time high of $104,600, Bitcoin has rallied by 4.57% on the daily chart, maintaining a bullish position above each EMA level on the 4-hour chart.

Bitcoin funding rate resets after $400 million liquidation

Bitcoin’s swift decline occurred within one hour, during which the candle high and low values were $99,105 and $90,500, respectively. Bitcoin liquidations crossed over $400 million during this brief period, identified as the largest liquidation event since 2021.

However, the major positive takeaway from the liquidation event was BTC’s funding rate undergoing a reset. BTC’s open interest-weighted funding rate has dropped from 0.09% on Dec. 4 to 0.01% on Dec. 6.

Byzantine General, a Bitcoin futures analyst, said the funding rate reset and that Bitcoin looks “really good.”

*Bitcoin futures metric analysis by Byzantine General. Source: X.com*

The anonymous trader highlighted the sharp decline in the funding rate, decreased aggregated open interest to the $95,000 level, and a drop in the aggregated spot premium. All these factors indicate a relatively deleveraged futures market compared to a few days back. The analyst added,

“If BTC just continues pumping after that liq cascade, that would be insane, and then there’s truly nothing that can stop this train.”

“This is normal” for Bitcoin

After the price volatility on Dec. 5, Bitcoin’s 1-day chart pictured the formation of a bearish spinning top candlestick pattern. A spinning top indicates a period of indecisiveness for the asset, as both buyers and sellers push prices in opposite directions.

Coincidentally, this pattern has been observed at previous important milestones for Bitcoin. Charles Edwards, the founder of Capriole Fund, highlighted that Bitcoin had acted similarly when it crossed $1,000 and $10,000, stating, “this is normal” for BTC.

*Bitcoin 1-day analysis by Charles Edwards. Source: X.com*

As illustrated in the chart, a similar bearish spinning top candle pattern was observed when BTC crossed $10,000 in December 2017 and witnessed severe price fluctuations after it crossed $1,000.

On both occasions, the bearish volatility was short-term, and the price continued to move upward after these milestone targets were attained. Thus, bullish market tendencies are expected to repeat this time as well.

Bitcoin Price, Markets, Bitcoin Futures, Price Analysis, Market Analysis — *Bitcoin 1-day chart. Source: Cointelegraph/TradingView*

Based on Fibonacci extensions, the immediate target for Bitcoin remains at $115,000, another 15% uptick from the $100,000 level. With the relative strength index or RSI coiling under the overbought region, an aggressive breakout can take prices as high as $124,500, which falls 3 times higher with respect to the Fibonacci extensions’ swing low value of $90,500.