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Bitcoin and Ethereum continue to trade near their one-year lows and remain in a corrective phase. Over the past three weeks, ETH and BTC have managed a modest recovery, but there are still no signs of an end to the downtrend that began last year. The fundamental backdrop for the crypto segment remains weak, mainly reflected in low spot demand, capital flows into the AI sector, and the Fed's commitment to achieving 2% inflation, which implies at least the continuation of tight monetary policy. Thus, we still see no basis for a sustained rally in Bitcoin or Ethereum.
Meanwhile, the market continues to watch the actions of the largest BTC-holding company, Strategy, closely. For a long time, Michael Saylor's company strategy served as an indicator of confidence for retail traders and institutions: if Strategy kept buying, it signaled that it knew what it was doing. However, Strategy recently carried out its first Bitcoin sale due to liquidity problems. The price of "digital gold" remains below the cost of mining as well as below Strategy's average purchase price. CryptoQuant said that Strategy's decision to sell bitcoin was correct, but that the company's overall strategy is still far from perfect. CryptoQuant analysts noted that Michael Saylor lacks a clear rule for when to buy Bitcoin to replenish reserves and when to sell to top up liquidity for dividend payments on common and preferred shares. In short, Strategy's trades are chaotic — something we have warned traders about more than once.
At the same time, Grayscale's experts said Strategy's Bitcoin selling could help form a market "bottom." This step should help restore investor confidence in the company's stock. However, in our view, the more frequently Strategy resorts to selling Bitcoin, the more the market will be convinced that the company's long?term strategy is flawed. Michael Saylor's company long adhered to a "never sell Bitcoin" principle and broke that rule in 2026, which indicates a mistake. As a result, investors are likely to be more cautious going forward, and purchases of "digital gold" will be made with greater prudence.
Bitcoin continues to form a full?fledged downtrend. We continue to expect a decline toward $57,500 (the 61.8% Fibonacci retracement level of the three-year uptrend), although this level has essentially already been tested. We do not believe the downtrend will end there. The last bearish FVG was formed in the $68,000–$70,700 area on the daily timeframe, so this zone acts as a POI for short positions in the coming weeks. On the 4-hour timeframe, Bitcoin is in the second leg of its correction, but sell trades remain more attractive because any rally is, a priori, just a correction.
A downtrend that began in August last year continues to form on the daily timeframe. The key sell pattern remains the bearish order block on the weekly timeframe. We do not believe the current downtrend is over, as there are no signs of its completion for either bitcoin or ether. The price has left the sideways channel, so the flat can be considered finished. A deviation of the upper band of the sideways channel never formed, so there were no grounds to open short positions. A new leg of correction is expected after a buy signal forms on the 4-hour timeframe. On the daily timeframe, we advise waiting for the correction to finish rather than trading against the trend.
CHOCH is a change of character / break of the trend structure. Liquidity means traders' Stop?Losses that market?makers use to build their positions. FVG stands for a 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 is an 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 means an 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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