Bitcoin and Ethereum remain in a correction that has been building for weeks. I remind you that recent developments have been more negative than positive. Central banks (notably the Federal Reserve) continue to tighten monetary policy, boosting demand for safe?haven assets rather than for Bitcoin. The Clarity Act remains just a bill; if Democrats win control of Congress, there is a good chance the bill will never become law. Historically, Bitcoin also tends to weaken after US midterm elections. Today that list of negatives grew with the hack of the world's largest crypto exchange, Binance. Taken together, the fundamentals for further crypto market gains look shaky. We do not deny that the asset can rise on any news — the recent dollar rally is proof of that — but at present there are neither technical signals nor fundamental reasons to expect an uptrend.
As already reported, Binance was hit by a hacker attack resulting in the theft of tokens worth $6 billion. What is known so far? Outflows were recorded across five blockchains, and the withdrawn funds were immediately spread across multiple crypto wallets. Tether has already frozen about $1 billion in USDT, which may be related to the Binance breach. As soon as news of the theft leaked online, withdrawals accelerated, triggering a drop in Bitcoin of several thousand dollars. The entire crypto market fell along with Bitcoin, which is logical and expected. At this stage, we believe "digital gold" got off lightly, but the overall fall could have been much larger.
Binance has stated that users' funds are fully safe. How is that possible if tokens were stolen? Safe, but in other people's wallets? Presumably the exchange means that all stolen funds will be returned or compensated to owners. Possibly. Yet the important fact is that the largest crypto exchange was breached. We believe AI was likely involved. If so, such incidents will probably increase as AI capabilities advance — and even more so once quantum technologies reach the required level. In fact, analysts who are not biased toward perpetual Bitcoin appreciation have long warned that the entire Bitcoin network could be compromised. That raises even greater worries for ordinary users' wallets.
Trading recommendations for BTC/USD
Bitcoin shows signs of a nascent "bull" trend. This trend, as often happens, began with a pump lacking clear fundamental drivers. However, in the near term on the daily timeframe, Bitcoin may decline: the price has reacted to the two latest bearish FVGs and formed a bearish order block. Traders should note that a breakout beyond the daily sideways channel could be a deviation — a deep deviation, but a deviation nonetheless. If so, Bitcoin could head for $70,800 and potentially maintain the downtrend that began last year. We consider short positions to be the most relevant in the near term.
Trading recommendations for ETH/USD
On the daily timeframe, the technical picture for Ethereum has changed completely. Ethereum is now poised to develop a new uptrend. However, bulls can only rely on the weekly chart, where Ethereum is targeting $4,800 — the upper band of a five?year sideways channel. On the daily chart, the first bearish FVG did not produce a strong price reaction, while Bitcoin did react to its own FVGs — and Ethereum's price is 80–90% correlated with Bitcoin. With Bitcoin beginning to correct, Ethereum also moved lower. Therefore, near?term declines are expected. Ethereum's targets are around $1,850 and $1,391. On the daily timeframe, Ethereum received a sell signal from the nearest FVG. Several sell signals formed on Bitcoin, so Ethereum does not even need its own additional triggers to fall.
Comments on the charts
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 stands for a 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 is an 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 an 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.
