Bitcoin has recovered to $8,000 and is continuing its move toward the only bearish FVG on the daily chart, as we anticipated. In any case, on the daily timeframe, this is the only POI area for new short positions. It should be remembered that any rise in Bitcoin at this time is a correction, and that correction could end at any moment, not necessarily within any particular pattern. Bitcoin continues to trade near its yearly lows, and most independent and unbiased experts predict further declines. We fully agree with these forecasts and believe that the downtrend is not over. There are no signs of an end to the bearish trend: no bullish patterns, nor a break in the bearish structure. The fundamental backdrop also remains negative: the Federal Reserve does not intend to lower interest rates in 2026, capital continues to flow into the AI sector, spot demand for Bitcoin remains weak, geopolitical tensions are unstable, and miners are adjusting their equipment to meet AI requirements. We see no reason for significant growth in "digital gold."
Meanwhile, crypto experts have begun to raise alarms again. The Clarity Act, which was intended to facilitate access for institutional traders to cryptocurrencies and make investments safer, more secure, and legal, is struggling to pass through the US Senate. Democrats and Republicans cannot come to a consensus, and the law has been pending approval by Congress for over six months. In addition, geopolitical tensions are rising, oil prices are soaring, the dollar remains consistently strong, and market interest in risk is at a minimum. Thus, it may not be right now, but if the situation does not change, Bitcoin and the entire cryptocurrency market will resume their decline. There are currently no fundamental bases for a bullish trend. Next week, the Fed will hold a meeting, and it is unlikely that there will be any discussion of lowering the key rate, which is crucial for Bitcoin. The Fed is moving closer to tightening monetary policy as US inflation will likely remain elevated in the coming months.
On the daily timeframe, Bitcoin continues to form a downward trend. The trend structure is identified as bearish, and the CHOCH line is now at $82,800, as a new LL (Lower Low) has been formed. Only above this level can it be considered that the downward trend has ended. Since there are still no signals of an upward trend reversal, we believe that the decline will continue. On the daily timeframe, a bearish FVG has formed in the area of $68,000-$70,700, which acts as the only POI for sell positions.
On the 4-hour timeframe, Bitcoin continues to form an upward corrective trend. After liquidity was removed on purchases on July 1, an increase began, as we warned. Recently, only small, local FVGs have been forming, and the reaction to them is typically weak. The price did not react to the last bullish FVG. The pattern has been canceled, but the upward structure remains. It is important to note that any rise in Bitcoin is now fundamentally a correction. Whether to trade the correction is a decision each trader makes for themselves. We note the liquidity pool below the trend line, into which the price is likely to fall with a probability of 90%. There are currently no bearish patterns.
Bitcoin continues to form a complete downward trend. We continue to expect a decline targeting $57,500 (the 61.8% Fibonacci level from a three-year upward trend), although this level has essentially already been reached. However, we do not believe that the downward trend will end here. The last bearish FVG pattern was formed in the area of $68,000-$70,700 on the daily timeframe; therefore, this area serves as a POI for short positions in the coming weeks. On the 4-hour timeframe, Bitcoin continues the second wave of the correction, but sell trades remain more attractive. Short-term long positions are quite permissible, but one must understand that the trend remains downward.
CHOCH – the breaking of the trend structure.
Liquidity – Stop Loss, pending orders that market makers use to build their positions.
FVG – Area of price inefficiency. Price passes through such areas very quickly, indicating a complete lack of either side in the market. Subsequently, the price tends to return and react to these areas in continuation of the main trend.
IFVG – Inverted area of price inefficiency. After returning to such an area, the price does not react to it but rather impulsively breaks through it and then tests it from the other side.
OB – Order Block. A candle on which a market maker opened a position to collect liquidity for forming their own position in the opposite direction.
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