Bitcoin and Ethereum have turned down again, and the reasons for the new drop are numerous. In our view, it's very simple. A downtrend began last year, and it is not over yet — there are no signs it has ended. Therefore, Bitcoin can extend its fall for purely technical reasons. In addition, with high US inflation, the Federal Reserve could raise the key interest rate once or twice in 2026, which is negative for all risk assets. Institutional investors are poised to reallocate capital from unprofitable Bitcoin (and especially other cryptocurrencies) into tech stocks and the AI sector, which look more promising in 2026. Miners are also shifting some of their production capacity from crypto mining to providing services to the AI sector. In short, the odds are stacked against the leading cryptocurrency.
Meanwhile, SkyBridge Capital founder Anthony Scaramucci said he is keeping his Bitcoin investments and does not intend to sell the "digital gold." Scaramucci explained that Bitcoin's main trump card is its limited supply. Against the backdrop of the devaluation of government securities and a steadily rising US national debt, Bitcoin is an especially relevant capital?protection tool. He also noted that Bitcoin's value is embedded in its code, unlike politicians' promises, which can change or go unfulfilled. Scaramucci attributed the recent Bitcoin drop to miners having to sell mined coins at any price to cover operating costs. The SkyBridge founder continues to believe in the four?year cycle — three years up followed by one year down — and therefore expects the bear cycle could end as soon as this autumn. We believe the four?year cycle no longer works (nothing lasts forever), and Bitcoin cannot rise indefinitely.
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 no signs of a trend reversal yet. The latest bearish FVG (fair value gap) formed in the $68,000–$70,700 area, serving as a POI (point of interest) for short positions in the coming weeks. On the 4?hour timeframe, a sell signal formed in the first bearish FVG at $62,700–$63,635. Another sell signal in the second bearish FVG could form today, especially given the structure break on the 4?hour chart.
On the daily timeframe, the downtrend that began in August last year is still forming. The key sell pattern remains the bearish order block on the weekly timeframe. We do not believe the current downtrend is over — there are no signs of its completion for either Bitcoin or Ethereum. In the near term, Ethereum may resume its decline with targets at $1,391 and $788. On the 4?hour timeframe, it makes sense to consider small long trades from bullish patterns, but bearish patterns should not be ignored. Yesterday, Ethereum produced the first sell signal in the first bearish FVG; today, it may react to the second bearish FVG and continue to fall alongside Bitcoin, which may also form a similar signal.
Comments on the chartsCHOCH — 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). 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 — 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.