Bitcoin and Ethereum are still going through a correction, which could take quite a long time. Over the past month and a half, Ethereum and Bitcoin have managed a modest recovery, but there are still no signs that the downtrend that began last year has ended. The fundamental backdrop remains weak for the crypto market, primarily expressed in low spot demand, capital flowing into the artificial intelligence sector, and the Fed's commitment to bringing inflation to 2%, which implies at least a continued tight monetary policy. Thus, we still see no reasons for a sustained rise in Bitcoin and Ethereum.

Meanwhile, former BitMEX CEO Arthur Hayes said the AI sector could one day collapse because it is built on credit money, which could trigger a new "2008-style crisis." According to Hayes, if an AI crash occurs, liquidity would flow into Bitcoin, and "digital gold" could potentially rally to $1 million. Hayes said investors treat spending on data centers and energy infrastructure as technology investments, whereas in reality it is effectively leasing real estate. Thus, for Bitcoin — which is suffering greatly from the development of AI — the only thing left is to wait for that sector to collapse. Whether that will ever happen is more a philosophical question. We also note that an AI "bubble" has been inflating for more than a year. Whether and when it will burst is impossible to predict. Interestingly, Robert Kiyosaki has been predicting for about five years the collapse of the US economy, the US dollar, and the US stock market. As we can see, no collapse has occurred so far. As for a possible rally of Bitcoin to $1 million, more down-to-earth data show that the global uptrend (which has lasted almost 20 years) is slowing. Each subsequent ATH (all-time high) is getting closer to the previous one. And an uptrend cannot last forever, however much some may wish it to.

Trading recommendations for BTC/USD

Bitcoin continues to form a full-fledged downtrend. We continue to expect a drop with a target of $57,500 (the 61.8% Fibonacci level of the three-year uptrend), although this level has essentially already been played out. We do not believe the downtrend is over. The last bearish FVG pattern was formed in the $68,000–$70,700 area on the daily timeframe, so that area acts as a POI for short positions in the coming weeks. On the 4-hour timeframe, Bitcoin is again tilting toward a decline, but the moves will most likely remain choppy and whipsaw-like.

Trading recommendations for ETH/USD

On the daily timeframe, a downtrend that began in August of last year continues to form. The key sell pattern remains the bearish order-block on the weekly timeframe. We do not believe the current downtrend is over, as there are no signs of its completion in either Bitcoin or Ethereum. At the moment, a second leg of the correction is underway, which could resume shortly, since a bullish order-block has been formed and buy-side liquidity has been swept. However, at the same time, Bitcoin is again "looking down," so the decline could resume. The order-block ultimately generated a buy signal, and the price reacted to that pattern. But if Bitcoin resumes its decline, Ethereum will also resume its fall, since the Bitcoin dominance index remains high.

Comments on the charts

CHOCH is change of character / break of the trend structure. Liquidity means traders' Stop?Losses that market?makers use to build their positions. FVG is 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 stands for 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 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.