Bitcoin has recovered to $8,000 and continues 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 is essential to remember that any rise in Bitcoin at this time is a correction, and that correction can end at any moment. It does not necessarily need to happen within any particular pattern. Bitcoin continues to trade near its yearly lows, and most independent and unbiased experts predict further declines. We completely agree with these forecasts and believe that the downward trend is not over. There are no signs of an end to the bearish trend: no bullish patterns or breaks in the bearish structure. The fundamental backdrop remains negative: the Federal Reserve does not intend to lower the key rate in 2026, capital continues to flow into the AI sector, spot demand for Bitcoin remains weak, geopolitical conditions are unstable, and miners are adjusting their equipment to meet AI requirements. We see no reason for significant growth in "digital gold."
Over the weekend, Donald Trump ordered the halting of strikes on Iran, explaining that he wanted to give Tehran another chance at negotiations. Naturally, few in the market believe this statement; however, it cannot be denied that Trump is personally interested in quickly concluding the war, especially since elections are approaching in the US and Americans do not support a war with Iran, which forces them to deal with high gasoline prices and rising inflation. Thus, this week, Iran and the US may return to diplomacy, which is good for all risk assets. If there is a chance to conclude the war (even if just a remote one), then inflation has a chance to return to the Fed's target levels (again, even if just a remote one). This means the Fed will not hurry with tightening monetary policy, which is entirely unnecessary for Bitcoin. Therefore, at the beginning of the new week, Bitcoin received some support, but it cannot be called strong, so any rise remains inherently corrective.
Overall Picture of BTC/USD on the 1D Timeframe
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 since 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 for 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 serves as the only POI for sell positions.
Overall Picture of BTC/USD on the 4H Timeframe
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 usually weak. The price did not react to the last bullish FVG and may ignore the last bearish FVG as well. Note the liquidity pool below the trend line, into which the price will likely fall with a probability of 90% when the current correction ends.
Trading Recommendations for BTC/USD:
Bitcoin continues to form a substantial 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 this downward trend will end here. The last bearish FVG pattern was formed in the area of $68,000-$70,700 on the daily timeframe, so this area serves as the POI for short positions in the coming weeks. The 4-hour timeframe indicates that Bitcoin continues its second wave of correction, but short trades remain more attractive overall. Short-term long positions are quite permissible; however, it should be understood that the trend remains downward.
Explanations for Illustrations:
CHOCH – the break of the trend structure.
Liquidity – 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 such 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, instead impulsively breaking through it and then testing it from the other side.
OB – Order Block. A candle on which a market maker opened a position to collect liquidity to form their own position in the opposite direction.
