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Bitcoin still shows little intention to recover. After the latest sell-off, the world's largest cryptocurrency has traded sideways for three weeks while quietly drifting lower. That leaves far higher odds of another drop in the "digital gold" than of an immediate rebound. A materially sustained rise can only be discussed after prices break out of the sideways channel to the upside.
Meanwhile, Euro Pacific Capital president Peter Schiff warned traders that Bitcoin faces further declines and urged everyone to get rid of "digital gold" as soon as possible. Schiff said a fall to $50,000 could trigger cascade liquidations of long positions and stop losses. Moreover, he allowed for a drop to $20,000 — or possibly lower. He also noted that each trend and each correction is different. Today, Bitcoin is tightly linked to leverage, institutional investment, and hype — factors that helped push it toward $126,000 but could also lead to a much deeper correction than down to $60,000. So far, Bitcoin has lost only half its value, but historical experience shows it can correct much more.
Peter Schiff also argued that Bitcoin has no intrinsic value and therefore could theoretically fall to any level. Its price is often tied to mining costs, but rising mining expenses do not change Bitcoin's intrinsic worth. Additionally, Bitcoin is highly volatile and unstable, so institutional traders may rotate out of it into more predictable assets like gold and stocks.
Bitcoin continues to form a full?fledged downtrend. We still expect a decline with a target of $57,500 (the 61.8% Fibonacci level of the three?year uptrend), and there are currently no signs of a trend reversal. Even $57,500 no longer looks like a final stop. From POI areas, note the nearest bearish FVG on the daily timeframe, which is located quite far from the current price. Also, pay attention to deviations of the upper boundary of the sideways channel on the 4?hour timeframe, since the trend remains bearish.
A downtrend is still in progress on the daily timeframe. The key sell pattern has been and remains the bearish order block on the weekly timeframe. As we warned, the move triggered by that signal can be strong and prolonged. After its formation, Ethereum has already slumped about 55% — roughly $2,500. In the near term expect an upside correction, but the price has got stuck in a fairly narrow sideways channel. While inside the range, trading should be done only from the channel borders.
CHOCH — change of character / break of the trend structure. Liquidity — liquidity, traders' Stop Losses that market?makers use to build their positions. FVG — Fair Value Gap (area of price inefficiency). Price often moves quickly through such areas, indicating the absence of one particular direction in the market. Later, the price tends to return and react to these zones. IFVG — Inverted Fair Value Gap. After a return to such a zone, the price does not react but impulsively breaks through and then tests it from the other side.
OB — Order Block. A candle on which a market maker opened a position in order to harvest liquidity and then form their own position in the opposite direction.
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