Bitcoin and Ethereum continue to correct after significant drops, but demand remains low, so thoughts of a "bullish" trend are currently unfounded. Many experts note that the "bottom" of the market could form in the $40,000 to $55,000 range, but in our opinion, even this range may not represent a final stop. Many traders have grown accustomed to believing that Bitcoin will rise indefinitely in price, or they merely take cues from Strategy. However, we believe Bitcoin can freely fall to 2022 levels, despite assurances from Kiyosaki, Wood, and Saylor. It should be remembered that Bitcoin is not physical gold, nor are there real assets backing it, such as businesses and real estate. There are no technical signs indicating an end to the downward trend for either Ethereum or Bitcoin.
Meanwhile, experts continue to highlight the capital outflow from spot ETF instruments. Reports indicate that approximately $6.5 billion has been withdrawn from funds over the last 30 days, marking the largest monthly capital outflow since their launch in early 2024. Spot ETFs initially provided quick access to cryptocurrencies, which was very convenient for investors. They did not need to open accounts on cryptocurrency exchanges to buy Bitcoin or Ethereum, store various access keys, or deal with transfers between wallets and cryptocurrency exchanges. Hence, buying Bitcoin through an ETF was much easier than through an exchange. However, this fact supported Bitcoin during a bullish trend, while it creates additional problems for it during a bearish one. If it is easier to buy Bitcoin through an ETF, then it is also easier to sell it.
Galaxy Research noted that sales through spot instruments are increasing, and this is no longer an isolated incident, coincidence, or event tied to any specific factor. This is now a trend of capital outflow. BlackRock indicates that an outflow of capital from some spot instruments could signify an inflow into others. According to BlackRock, institutional investors are not completely giving up on Bitcoin but are acting much more cautiously under current circumstances than before. However, relying solely on internal demand, Bitcoin will find it extremely difficult to recover or initiate a new bullish trend. Currently, large investors are focusing more on the AI sector and technology stocks. Only Strategy continues to buy Bitcoin for all the money.
Trading Recommendations for BTC/USD:
Bitcoin continues to form a full-fledged downward trend and a correction against it. We continue to expect a decline targeting $57,500 (the 61.8% Fibonacci level from the three-year upward trend), and there are still no signs of an impending upward trend. The last bearish FVG was formed in the range of $68,000 – $70,700, making this area a point of interest (POI) for short positions in the coming weeks. On the 4-hour timeframe, the cryptocurrency may be in an upward correction for the near future, so if traders wish to trade against the trend, they can consider small longs from bullish patterns. However, the correction could end at any moment.
Trading Recommendations for ETH/USD:
On the daily timeframe, the downward trend that began last August continues. The key selling pattern remains the bearish order block on the weekly timeframe. We do not believe that the current downward trend is complete, as there are no signs of an impending reversal for either Bitcoin or Ethereum. In the near future, Ethereum may resume its decline, targeting $1,391 and $788 if Bitcoin reacts to the bearish FVG on the daily timeframe. Until that happens, small long positions can be considered on the 4-hour timeframe based on bullish patterns. The market did respond to the last bullish FVG, but the growth is very weak. Traders should remember that a correction is simply a correction. It is far better to trade with the trend.
Explanations for Illustrations:
CHOCH – break in trend structure.
Liquidity – liquidity, Stop Loss, and pending orders that market makers use to build their positions.
FVG – Area of price inefficiency. Price moves through these areas very quickly, indicating a complete absence of one side in the market. Subsequently, price tends to return and react to such areas in continuation of the main trend.
IFVG – Inverted area of price inefficiency. After returning to such an area, the price does not respond but impulsively breaks through and then tests from the other side.
OB – Order Block. The candle on which the market maker opened a position aimed at gathering liquidity to form their own position in the opposite direction.
