Traders looking to impulsively take exposure to bitcoin (BTC) at record prices due to the "fear of missing out" (FOMO) should note that the market now looks notably confused, a shift away from the recent strong bull momentum.

The confusion is evident in BTC's trading on Thursday, as it finally rose to six figures, tapping record highs near $103,900 before plummeting to $91,100, ultimately ending the day in UTC at approximately $97,000, data from TradingView and CoinDesk show. The trading range was so large that it engulfed all the price action since Nov. 20.

This led to the formation of a "high wave candle," characterized by a small real body that shows the gap between the open and closing prices, along with large shadows (wicks) that reflect unusually wide price swings throughout the day.

It's a sign that the bulls now have less than full control, with sellers looking to reassert themselves, serving as a cautionary indicator for those looking to chase the market at this moment. This cautionary signal becomes even more significant given that the pattern has appeared at record highs, representing a failure to maintain gains above the closely-watched $100,000 mark.

"The long upper shadows mean that sometime after the session's open, buying pressure thrust the security's price to an extended high. During the same session, selling pressure drove the price to a protracted low. Yet, by the session's close, the price returned almost to the opening price. That's confusion," <a href="https://cmtassociation.org/" target="_blank">CMT</a>'s explainer for high-wave candles says.

The high wave candle gets its name because Japanese traders liken the extended shadows, or wicks, to large ocean waves.

The high wave candle, coupled with the bearish divergence of the relative strength index, a momentum indicator, points to consolidation or a temporary bearish shift in the market trend. A bearish divergence occurs when the momentum oscillator sich as the RSI doesn't confirm the new high in prices.

The message is consistent with several analysts <a href="https://www.coindesk.com/markets/2024/12/05/market-makers-may-keep-bitcoin-around-100-k-as-overheated-market-faces-pullback-risks" target="_blank">expressing concerns</a> about overcrowding in long positions and the potential for price pullbacks.

Moreover, directional plays become challenging while prices remain locked within Thursday's range, indicating ongoing market confusion. If it breaks below the range, more sellers may enter the market. Conversely, a move above Thursday's high would suggest a resumption of the bullish trend.

Notably, Deribit-listed BTC calls expiring at the end of December now trade at a three volatility premium over puts, down from the five or higher seen on Thursday, according to data source Amberdata. This shift indicates that bullish sentiment has tempered.

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