Day by day, the situation in the cryptocurrency market has remained unchanged for a month and a half. On the daily timeframe, it remains a sluggish, weak upward correction, while on the 4-hour timeframe, it continues to be a flat pattern with a minimal upward incline. Thus, this is currently a very unattractive time for trading, as there is neither a pure flat market nor a trend. The President of the United States announced on Monday about successful negotiations with Iran, which resulted in the postponement of the ultimatum for strikes on energy assets for five days. Bitcoin experienced a slight surge in optimism following this event, but nothing has fundamentally changed. Traders can still expect a weak upward movement that will border on a flat trend. The majority of patterns on the 4-hour timeframe are being ignored, which, once again, points to the movement's unattractiveness. On the daily timeframe, there are no new patterns, and Bitcoin has not reacted to those already present on the chart.
If the war in the Middle East ends, it may support "digital gold" for a time, but it's unlikely to last long or be significantly impactful. In our view, the market is preparing for a renewed decline well below the trend line on the daily timeframe. The $57,500 target has not been met, and we still see no signs that the downward trend is ending. The Fed worsened the fundamental backdrop for the cryptocurrency market last week, effectively abandoning further monetary policy easing indefinitely. Traders expect the key interest rate to be reduced again by the end of the year, but the Fed's stance may change 10 more times by then.
One thing is clear: the current movement is a correction, and Bitcoin has several obvious targets below. Investors are in no hurry to buy "digital gold," despite the attractiveness of current prices and assurances from Michael Saylor, Robert Kiyosaki, and Cathie Wood. In our opinion, the downward trend is not over, and it is too short-term to expect the start of a new bullish trend at this time.
On the daily timeframe, Bitcoin continues to form a downward trend. The trend structure is identified as descending, and the CHOCH line is currently at the level of $97,900. Only above this level can we consider the downward trend to have ended. It is worth noting that the last sell signal was formed within the "bearish" FVG ($96,900 – $98,000). Thus, traders had a great opportunity to capture nearly all of the recent downward movement. The relevant target for this decline remains at $57,500, the 61.8% Fibonacci retracement level. As there are no signs of an upward trend change, we believe the decline will continue. On the daily timeframe, the nearest area of POI for new sell trades is in the range of $79,500 – $81,100.
On the 4-hour timeframe, the price has completed a 5-week flat movement; however, the trend has not yet begun. The CHOCH line, which serves as support for the upward correction, is at the level of $65,500. Breaking this line will indicate the completion of the correction that has lasted over a month. The order-block was impulsively broken, and the breaker-block was also impulsively broken, but no clear signals have been formed. The flat cannot be considered relevant at this time, the short-term upward trend cannot be deemed completed, and the bearish sentiment in the market persists. The last bearish FVG was canceled after Trump's speech, and the IFVG formed on its base did not yield a significant reaction either. The FVG near the upper boundary of the former sideways channel has also not been reacted to.
Bitcoin continues to form a full-fledged downward trend. We continue to expect a decline, targeting $57,500 (the 61.8% Fibonacci level of the three-year upward trend), and there are currently no signs of a trend reversal. But even the $57,500 level no longer looks like a final stop. Currently, the only notable POI is the nearest bearish FVG on the daily timeframe, which is located quite far from the price. On the 4-hour timeframe, Bitcoin's movement again shows all signs of being flat. An obvious target remains below the trend line on the daily timeframe, indicating a liquidity pool.
CHOCH – change of character in the trend structure.
Liquidity – liquidity, stop losses of traders that market makers use to build their positions.
FVG – Fair Value Gap, a price inefficiency area. Price quickly passes through such areas, indicating a complete lack of one side in the market. Subsequently, the price tends to return and react to such areas.
IFVG – Inverted Fair Value Gap. After returning to such an area, the price does not receive a reaction from it; it impulsively breaks through and then tests it from the other side.
OB – Order Block. The candle on which the market maker opened a position with the aim of capturing liquidity to form its own position in the opposite direction.
*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.
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