KEYTAKEAWAYS
- ETFs continue to drive recent Bitcoin market movements; BlackRock's shift from buying to selling signals reduced institutional interest.
- Bitcoin's bearish technical indicators, including the Three Black Crows pattern, suggest the downtrend may continue.
- After rapid growth, SOL faces potential top formation with bearish technical signals and waning bullish momentum.
CONTENT
In the Crypto Pre-drink, we serve up a daily shot of the hottest crypto news and market insights to fuel your investment decisions.
Over the past month, both Bitcoin and Ethereum have displayed weak trends, with technical patterns suggesting a downturn. Bitcoin’s rebounds have progressively weakened, each less forceful than the last, and Ethereum has shown little capacity for recovery, particularly when its exchange rate with Bitcoin approaches 0.05.
ETF INFLUENCE ON BITCOIN PRICES
This recent market movement has been predominantly driven by ETFs. Following the approval of several ETFs in January, Wall Street institutions aggressively bought into Bitcoin, injecting billions of dollars daily and nearly doubling the price over two months. However, since April, especially in recent weeks, BlackRock has ceased its net buying activities, shifting instead to net selling, leading to a sudden depletion of market funds. Post the Bitcoin “halving” event in April, market funding rates plummeted dramatically, even turning negative, indicating extreme caution among investors, which has directly impacted market sentiment.
ASSESSMENT OF BITCOIN’S PRICE
Bitcoin experienced another decline overnight, initially rebounding to around $63,000 before facing downward pressure. Evening trading showed some uplift, but the continuation was weak, eventually breaking below the $62,000 level and closing low, with the lowest point around $60,800. The daily close was a significant bearish candlestick, forming a Three Black Crows pattern with the previous two days’ candlesticks, signaling a downward trend still dominates the market.
TECHNICAL ANALYSIS OF BITCOIN TRENDS
Analyzing the four-hour chart, Bitcoin initially rebounded, then moved upwards before experiencing another downturn. The overall market behavior has mostly aligned with expectations, although the rebound was relatively modest, failing to exceed the previous day’s high. The price continued to trend along the lower trajectory of the chart. As it turned downward again, the $64,500 level acted as a significant resistance, with the breaking of lower points showing bear dominance. This bearish trend from the late trading hours of the previous day is likely to continue today, suggesting there is still room for further declines. Investors are advised not to attempt bottom-fishing prematurely.
ASSESSMENT OF SOL’S PRICE
SOL’s price surged from a low of $8 to a high of $210 in approximately 15 months, achieving significant growth during a period characterized by a market transition from bearish to bullish conditions. Such rapid increase prompts speculation about further potential rises; however, such expectations are risky. The market has become fragmented this year, with each cryptocurrency displaying distinct trends, differing from previous bullish cycles.
TECHNICAL ANALYSIS OF SOL TRENDS
The risks associated with SOL have emerged for several reasons. Primarily, the recent price surge was driven by Wall Street speculation. Market indicators now suggest that SOL has reached its peak:
- Resistance at Previous Highs: The price has reached the peak of the last bull market, encountering significant resistance.
- Broken Long-Term Uptrend: SOL has breached the second long-term ascending trendline, signaling a shift in the upward trend.
- Substantial Retracement: The price has retraced more than 50% from its highs.
- Volume Patterns: There has been an increase in volume on declines and a decrease on rebounds, indicating weakening bullish momentum.
- Consolidation Zone: Currently, the market is in a consolidation phase. Last week, a hammer candlestick appeared, suggesting a temporary halt in the downtrend, but without significant buying volume to suggest a strong rebound.
- Bearish MACD Crossover: The MACD has shown a high-level bearish crossover.
As bullish strength wanes and bearish momentum gains, the market appears to be forming a top. While this doesn’t imply an immediate drop, it indicates that the uptrend has altered and risks have emerged. Major sell-offs require time and the participation of buyers to sustain the market; once selling is exhausted, the market trend may conclude.
