Bitcoin and Ethereum have shown a rapid rise, which has now clearly started to fade. The US Treasury's decision to increase bond repurchase volumes triggered a surge in the cryptocurrency market, but we continue to wonder how long it will last considering it relies on a single supporting factor. Essentially, this was a "black swan" that arrived unexpectedly. Despite the strong growth of both cryptocurrencies, we do not believe that the downward trend is over. The fundamental background remains weak for the crypto segment, and the downward trends in both Ethereum and Bitcoin have not been broken. We still do not observe grounds for sustained growth. The prospects for the cryptocurrency segment have become much more optimistic, but we warn traders that we might be dealing with a pump or manipulation.
Meanwhile, Caitlin Long, CEO of Custodia Bank, explained that the latest round of growth in the cryptocurrency market was driven by the US Treasury's decision to increase the repurchase volumes of long-term bonds, which is essentially an attempt to control the yield curve of securities. Many experts have already stated that controlling the yield curve is a very bad idea that is unlikely to yield the desired results. However, such measures from the Treasury have significantly increased investor appetite for risk. Nevertheless, Long believes that fundamental factors and the technical picture indicate that the four-year cycle is still ongoing, which means its "bear" phase is not over.
It is worth noting that Ms. Long refrained from making predictions about Bitcoin, which, in our opinion, demonstrates her wisdom and disinterest. Many experts, as soon as Bitcoin rose in price, immediately began to predict new price records in the near future. This only drives traders and investors away from them and their forecasts. According to such experts, Bitcoin will grow indefinitely, which in itself seems quite dubious. In our view, the Fed's tight monetary policy, the capital influx into the AI sector, and the decreasing popularity of crypto assets due to artificial intelligence will prevent Bitcoin from renewing its ATH (All-Time High) this year. We also do not see technical signs that the downward trend has ended. On the contrary, the weekly timeframe clearly shows that the "bear" trend is still intact.
Bitcoin continues to form a downward trend despite strong growth from the previous week. We maintain our expectations for a decline with a target of $57,500 (the 61.8% Fibonacci level from a three-year upward trend), although this level has essentially already been tested. But we do not believe that the downward trend is over. The current rise of the leading cryptocurrency hardly resembles a correction, but this cannot be a convincing reason for opening longs. The current movement resembles a pump the most. Liquidity may be taken from the peak of $82,850, which could provoke a decline in the leading cryptocurrency and confirm a transition to sideways movement. On the 4-hour timeframe, we expect a new round of decline from the last "bearish" FVG.
On the daily timeframe, the technical picture has changed completely in just a few days. Now, Ethereum may begin a new upward trend. However, traders can currently only base their moves on the weekly chart, where Ethereum may target $4,800, which represents the upper band of the five-year sideways channel. On the daily timeframe, the nearest "bearish" FVG has been tested, but this FVG belongs to the previous trend. If it does provoke a market reaction, it will likely be corrective. We also note the liquidity taken from the peak on April 17 and the liquidity taken on the 4-hour timeframe. Bitcoin has also taken liquidity on the 4-hour chart. Thus, at the very least, a correction is brewing, but on the 4-hour timeframe for Ethereum, we are watching a flat formation, and Bitcoin is also in no hurry to begin its decline.
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 is 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 stands for 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 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.
*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.
¡Los informes analíticos de InstaSpot lo mantendrá bien informado de las tendencias del mercado! Al ser un cliente de InstaSpot, se le proporciona una gran cantidad de servicios gratuitos para una operación eficiente.
