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Bitcoin staged a kind of rally after a month-long range and immediately ended it. On the daily timeframe, it's clear the current upward move is a weak correction, and there is a liquidity pool below that price is likely to revisit with about 90% probability. On the 4-hour timeframe, you can see how slowly Bitcoin is rising, if it's rising at all. A fast, sharp fall and slow minor gains are classic signs of a downtrend. Thus, our view remains unchanged — the downtrend is not over; the market is in a pause.
Meanwhile, Donald Trump issued another ultimatum to Iran. If Tehran does not reopen the Strait of Hormuz within 48 hours (which expires today), the US will strike Iran's power plants. The day after the latest US threats, Iranian officials warned that any attack on their energy infrastructure would be met immediately by retaliatory strikes on the energy assets of regional allies. In addition, information infrastructure, in particular data centres that carry up to 20% of global internet traffic, could be targeted. So, Iran and the US could further escalate military actions today, and as usual, the whole world would suffer.
Oil and gas will continue to rise, Middle Eastern energy will shrink further, and energy worldwide will become more expensive. As a consequence, mining costs will also increase. We've said before that because of the halving every four years, Bitcoin must roughly double over that same period for mining to remain profitable. Each year, it becomes harder for Bitcoin to grow because its adoption among investors is already fairly high. In other words, those who wanted to buy Bitcoin for the long term have largely already done so. Those planning to buy are waiting for a better entry. Mining costs keep rising constantly, while mining revenue drops by half every four years. Bitcoin needs perpetual price growth to keep mining profitable — which seems unlikely...
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. From POI areas, note only the nearest bearish FVG on the daily timeframe, which is quite far from the price. On the 4-hour timeframe, the latest FVG could theoretically be used to look for sell signals. Below, an obvious target remains — the liquidity pool beneath two trend lines.
On the daily timeframe, a downtrend is still in progress. 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. Since that pattern formed, Ethereum has already fallen roughly 55% (about $2,500). In the near term, an upside correction is still possible; the 4-hour order block has been invalidated, and Ethereum has left the sideways channel. Charts currently show only bearish FVGs as POI areas for selling. Buying in a downtrend should be cautious and short-term.
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 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.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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