Bitcoin and Ether remain in a pause before... a new leg up? Or a correction? Notably, the two most important recent developments for the crypto world were more negative than positive. Central banks (notably the Fed) have begun tightening monetary policy, which raises demand for safe assets such as bank deposits and sovereign bonds. And although demand for Treasuries has fallen globally, their yields have risen, which means investors could restore demand for these securities in the future if the US government and others take measures to reduce budget deficits and sovereign debt. If capital flows into debt markets, demand for Bitcoin will not increase. In addition, the regulatory Clarity Act was not passed and is unlikely to be reconsidered in the near term, since the US is preparing for congressional elections. Expect a new review of the bill no earlier than November, and the voting outcome will largely depend on election results. Recall that Republicans even voted against the Clarity Act in the Senate. It will be very difficult for Donald Trump to secure the 60 votes necessary for passage.
Meanwhile, it became known that one of the largest public Bitcoin holders, Metaplanet, increased its reserves by 11,000 coins. Earlier, it had sold 10,000 coins, so its net accumulation rose by 1,000 and now totals 44,000. Of course, it is far behind Strategy, which this week also bought Bitcoin for several dozen million dollars, but that is the point we would like to note. Broadly speaking, only Strategy has been buying Bitcoin aggressively; other companies and investors allocate only a very small portion of their portfolios to "digital gold." We do not believe Michael Saylor's strategy-style accumulation strategy is a model for other investors. Strategy is fully focused on building a Bitcoin treasury, so its financial health and share price now depend entirely on Bitcoin's price. Admit it—it strongly resembles "putting all eggs in one basket."
Trading recommendations for BTC/USD:
Bitcoin shows signs of the start of a new bull trend. This trend begins, as is often the case, with a pump that has no specific clear reasons. The Fed has not started cutting rates, and the Clarity Act was not passed. In the near term, on the daily timeframe, Bitcoin may be in decline because sellers are currently aided by a bearish FVG. We also note that the current breakout beyond the daily sideways channel may be a deviation. Yes, a deep deviation, but still a deviation. If so, Bitcoin could head for $70,800 and even maintain the downtrend that began last year. We believe short positions are more relevant in the near term.
Trading recommendations for ETH/USD:
On the daily timeframe, the technical picture for Ether changed completely in just a few days. Now, Ether is oriented toward a new uptrend. However, traders should rely primarily on the weekly chart, where Ether has set a course for $4,800—the upper boundary of a five-year sideways channel. On the daily timeframe, the first bearish FVG did not produce a noticeable price reaction, but the next FVG, together with a similar pattern on Bitcoin, could provoke a significant decline in Ether. On the 4-hour chart, there was a reaction to a local bearish FVG, after which a fairly powerful drop began—a move that could have been traded with shorts on a clear signal. We continue to expect declines in both Ether and Bitcoin.
Explanations for the illustrations:
CHOCH — change of character, break of trend structure.
Liquidity—liquidity, stop losses, and pending orders that market makers use to build positions.
FVG — fair value gap, an area of price inefficiency. Prices move quickly through such areas, indicating the absence of one side in the market. Later prices tend to return and react to these areas in the direction of the main trend.
IFVG — inverted fair value gap. After a return to such an area, price receives no reaction and impulsively breaks through, then tests from the other side.
OB — order block. The candle on which a market maker opened a position to capture liquidity and form a position in the opposite direction.