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Bitcoin has been in a kind of upward move that is actually viewed as a correction for about a month and a half. This is clearly visible on the daily timeframe. The liquidity pool below remains untouched, and the price is 90% likely to move toward it. On the 4-hour timeframe, it's clear that the price has returned to a sideways channel. Thus, our view remains unchanged — the downtrend is not over; the market is on pause.
Meanwhile, Glassnode analysts noted that volatility in the crypto market has been ebbing away, and there are no catalysts for a new upswing. The situation in the Middle East is reducing investor appetite for risk assets, and it's hard to find a riskier asset than cryptocurrency. Analysts also point out that a large number of investors bought Bitcoin above $80,000 and are currently holding those positions at unrealized losses. This group has been underwater for six months and faces a choice: close positions with a small loss on any price recovery or fully capitulate as the bearish trend develops. The firm believes that completing the downtrend will likely require a further price drop, which would trigger a new wave of selling and, as a consequence, attract new investors with attractive prices. The total number of coins currently lost is about 8.4 million — effectively half of the entire supply of "digital gold."
There is only one conclusion: the downtrend is not over, and at current prices, no new investors are willing to buy the "digital gold" that is supposed to "compete with physical gold." Let me remind you that after each uptrend, Bitcoin inevitably lost up to 70–80% of its value, and downward corrections lasted at least a year. Therefore, we still believe the downtrend that began last year is not finished.
Bitcoin continues to form a full-fledged downtrend. We still expect a decline toward $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 the final stop. Of the POI areas, the only notable one now is the nearest bearish FVG (fair value gap) on the daily timeframe, inside which a signal could form within the next few hours. On the 4-hour timeframe, Bitcoin's movement again shows all the signs of a flat/range market, so it makes sense to track only deviations of the sideways channel borders.
On the daily timeframe, a downtrend and its corrective bounce continue to form. The key sell pattern was 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 that pattern formed, Ethereum had already lost about 55%, roughly $2,500. Ethereum may continue a weak upward correction in the near term, but any correction eventually ends. On the 4-hour timeframe, ETH worked through recent FVGs fairly well and last night reacted to a bearish FVG from which the daily downtrend may resume. Bitcoin also reacted to a bearish FVG.
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). The price often moves quickly through such areas, indicating the absence of one side 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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