Bitcoin and Ethereum have been trading in sideways channels for several weeks after a sharp surge. However, that does not mean the downtrend that began last year is over. On the daily chart, Bitcoin is rangebound between $60,000 and $82,500, while the weekly chart still shows a downtrend. So, regardless of what anyone says, we do not believe a new "bull" market has begun. I remind you that most analysts still refer to the four?year cycle, according to which Bitcoin should finish its downward correction this autumn and begin a new bull phase. But the four?year cycle is not eternal. Many of the so?called "experts" constantly forecast Bitcoin's rally, as if the cryptocurrency could never fall — and if it does, that is simply an excuse to buy at cheaper prices.

Meanwhile, Arthur Hayes has joined the ranks of analysts predicting perpetual upside for "digital gold." Hayes believes mechanisms to expand the money supply have already been set in motion in the US, and excess liquidity is flowing into financial markets. As a result, Bitcoin could return to and renew its ATH near $126,000 this year thanks to fresh capital inflows. Arthur Hayes also said that over the coming years Bitcoin could rise to $250,000–$500,000 driven by the same monetary expansion in the US.

Hayes's argument is logically coherent: the more money in the economy, the more capital investors have, and investors do not keep money under a mattress — they allocate it to various instruments, Bitcoin among them. But in our view, this relationship does not guarantee Bitcoin's growth, and it certainly does not guarantee explosive growth. Note that recent years have seen Bitcoin's new ATHs slow down: each subsequent high is closer to the previous peak than the one before. Thus, a bull market is possible, but there are no clear technical signs that it has started. We would not count on a parabolic rise toward $250,000.

Trading recommendations for BTC/USD

Bitcoin continues to form a downtrend despite the strong week?earlier rally. We still expect a drop toward $57,500 (the 61.8% Fibonacci retracement of the three?year uptrend), although that level has effectively already been tested. We do not believe the downtrend is finished. The current rise looks weak for a corrective move and is not a strong case for opening longs. Liquidity may be swept from the $82,850 high, which could trigger another leg down. On the 4?hour chart, another decline can be expected after a second liquidity sweep of recent highs (deviations). We believe a fall to $75,500 is quite likely this week.

Trading recommendations for ETH/USD

On the daily timeframe, Ethereum's technical picture has changed dramatically in just a few days. Ethereum may now be able to start a new uptrend. Yet traders should focus on the weekly chart, where ETH could target $4,800 — the upper band of a five?year sideways range. On the daily chart, the nearest bearish FVG has been filled, but that FVG belongs to the previous trend; if it triggers a market reaction, it will most likely be corrective. Let me also highlight the liquidity sweep of the April 17 high and liquidity removal on the 4?hour chart. Bitcoin likewise swept liquidity on the 4?hour chart and remains in a broad sideways range. Therefore, Bitcoin is currently biased lower, and if a decline begins, Ethereum will likely head down as well.

Coments 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 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.