Bitcoin rose by $18,000 in just a few days, but the crazy rally quickly stopped, and Bitcoin ultimately went flat. Of course, this may be a simple pause — a calm before a new surge. During strong trends, Bitcoin often halts and then, even without a correction, posts a new powerful move. Thus Bitcoin's current inability to continue north does not mean the local upward impulse is finished. Recall that neither Ether nor Bitcoin have yet broken their downtrends that began last year, so the current upward impulse should be viewed as local. There is also a high probability of a flat forming on the daily and weekly TFs. On the weekly TF, the current upward move appears to be a simple correction, and the downtrend is not over.
Meanwhile, former Binance CEO Changpeng Zhao said that in the next "bull" cycle Bitcoin could overtake gold by market capitalization. Gold's market cap is now over $30 trillion; Bitcoin's is $1.5 trillion. Of course, anything is possible in this crazy world, but this forecast seems somewhat inflated and optimistic to us. Compare gold and Bitcoin dispassionately: gold is a physical precious metal that humanity has used as a store of value for centuries. Bitcoin is computer code with no physical application or intrinsic use value. If gold ever stops serving as a store of value you can still make spoons and forks out of it — some utility. You cannot make anything out of Bitcoin. We do not belittle Bitcoin's value, but in our view it will never become more popular than gold with investors. By the way, gold's supply is also limited, so this property is not unique to Bitcoin.
Zhao also said that, over time, states will begin to accumulate digital assets, and more than half of such an "ideal reserve" could be Bitcoin. Remember that national reserves are meant to preserve capital in any situation and at any time. For example, if a Third World War begins and the internet stops working, gold will still be recognized globally — but Bitcoin?
General BTC/USD Picture on 1D
On the daily TF, Bitcoin continues to form a downtrend. The trend structure is identified as descending, and the CHOCH line is at $82,800, where the last Lower High (LH) was formed. Only above this level can the downtrend be considered complete. The last and only bearish FVG was pierced through and turned into a bullish IFVG. Thus, in the future, this area will be a POI for long positions. Bitcoin has not yet broken the downtrend, but over the last two weeks the odds of the bearish trend ending have risen sharply. However, there is a high probability of a flat forming between $60,000 and $82,500. That would mean price could take liquidity from the last LH and then start a new decline.
General BTC/USD Picture on 4H
On the 4-hour TF, it is clear how Bitcoin literally rocketed. Analyzing the 4-hour TF right now makes little sense because the moves are too strong. Therefore, signals in the coming days should be sought on the daily TF or even the weekly TF. Nevertheless, one point must be noted. Price removed liquidity from the last local high for the second time and also formed a flat. Thus, a second deviation of the upper boundary of the sideways channel could trigger a drop toward the lower boundary.
Trading Recommendations for BTC/USD
Bitcoin continues to form a downtrend despite the strong rally a week earlier. We continue to expect a decline targeting $57,500 (the 61.8% Fibonacci level of the three-year uptrend), although this level has effectively already been played out. We do not believe the downtrend is finished. The current rise in the top crypto looks very little like a corrective move, and this is not a strong argument for opening long positions. The current movement looks more like pumping. Liquidity may be grabbed from the $82,850 high, which could provoke a new leg of the downtrend. On the 4-hour TF, one can also expect another drop after the second liquidity grab from the last local high.
Explanations for the illustrations:
CHOCH — change of character (break in the trend structure).
Liquidity — liquidity, stop losses, pending orders that market makers use to build their positions.
FVG — fair value gap (area of price inefficiency). Price moves quickly through such areas, indicating that one side was absent; later, price often returns to and reacts at these levels, continuing the main trend.
IFVG — inverted fair value gap. After returning to such an area, price does not react; instead, it impulsively breaks through and then tests it from the other side.
OB — order block. A candle where a market maker opened a position to collect liquidity to form their own position in the opposite direction.
