This week saw notable shifts in both crypto and traditional markets, influenced by macroeconomic developments, ETF flows, and key technical factors. Here’s a structured overview of the current landscape and what to monitor moving forward.

Here’s what we’ll cover today:

🌍 Market Recap & Macro Overview: Quick recap of crypto & traditional markets this week, also covering key macroeconomic factors affecting risk assets.

📉 Bitcoin (BTC) Breakdown: Key support & resistance zones for the weekend. ETF flows & their impact on BTC’s price action. Liquidation heatmaps: Where the next squeeze could happen.

📊 Ethereum (ETH) Outlook: Is Ethereum showing strength or lagging compared to Bitocin? Key technical levels & breakout setups.

🚀 Solana (SOL) Analysis: SOL’s trend structure compared to BTC & ETH. Crucial levels for continuation or correction.

Let’s dive in!

The FOMC meeting delivered no surprises this week, with rates remaining unchanged and the balance sheet rundown continuing, although at a significantly slower pace. Markets favor certainty, and following the meeting, both traditional markets and crypto saw some relief. However, this was short-lived as the S&P 500 encountered resistance at around $5,700 and Bitcoin was unable to trade past $87,500.

Gold has surpassed $3,000 for the first time in history and is not showing any signs of weakness yet. We expect its strong trend to continue as long as there is no significant shift in the global macro environment. This remains a clear indication that uncertainty is still high and investors are seeking the safe-haven asset.

We’d like to highlight the Fed’s recent decision to slow, rather than completely halt, quantitative tightening. It’s important to note that Bitcoin managed to surge from $18,000 to $110,000 despite extremely tight liquidity conditions. Now, with all major central banks beginning to stimulate their economies and global liquidity conditions easing, market cycles are likely to unfold naturally. This, among other data, strengthens our view that the Bitcoin bull run should continue. 

Additionally, the current consensus suggests the Fed will conclude its balance sheet runoff by mid-2025, meaning QT could officially end as soon as the next FOMC meeting.

On Tuesday, we outlined in a Bitcoin Briefing on X that the liquidation heat map showed significant clusters of liquidation leverage around $85,000, making it likely for Bitcoin to take out that resting liquidity in a bullish short-term scenario. Following the FOMC meeting, we indeed saw a price pump to $87,500 before facing rejection.

Notably, total Bitcoin Spot ETF net inflows have been positive for the past four days, fueling said pump and potentially signaling relief and renewed confidence among investors.

We are currently trading just below the key short-term level of $84,300. The liquidation heat map highlights major clusters of liquidation leverage just below the current price at $83,300 and another at $80,600. Additionally, there is another cluster, though less significant, above the recent high at $87,600.

Bullish scenario: Given the fact that we are trading below our key level at $84,300 again, a bullish scenario would involve reclaiming that level and continuing the uptrend toward the recent high at $87,500. Long entries could be considered on a potential retest of $84,300, with invalidation if the level is lost again.

Bearish scenario: With significant liquidation leverage positioned below the current price and Bitcoin trading beneath the key level of $84,300, a short-term bearish continuation appears likely. We expect both liquidity clusters to be reached, making a retest of the area around $80,000 probable. If that level fails to hold, a further decline toward the $73,000 region should be kept in mind as a worst-case scenario.

Ethereum moved higher during the FOMC meeting on Wednesday, reclaiming $2,000, but failed to break above the 2024 lows and was rejected at that level. With quantitative tightening still in effect, it appears increasingly likely that ETH/BTC will continue trending lower, at least until the Fed concludes its balance sheet runoff or a major shift in market sentiment occurs.

Looking at Ethereum's chart against the dollar, the ongoing downtrend remains strong, and we have yet to see a bullish weekly engulfing candle close, which would signal a potential reversal. Additionally, the inability to reclaim and hold above $2,000 or the value area low is another sign of weakness in our view.

Bullish scenario: In a bullish scenario, we’d like to see Ethereum reclaim both the psychological level of $2,000 and the value area high at $2,120. This would not only indicate short-term strength but could also set the stage for a sentiment shift and potential trend reversal, especially if the ongoing higher timeframe downtrend is broken.

Bearish scenario: While we must remain objective, the bearish scenario appears more likely given Ethereum’s weakness and recent inability to hold above $2,000. In this case, Ethereum would continue its downtrend, likely retesting the recent lows at $1,800 and potentially extending further toward the point of control at $1,600.

Solana continues to trade lower on its Bitcoin pair, though not as rapidly as before, showing increased consolidation and potential signs of a trend reversal. The 0.0015 area has held well over the past weeks, though we may see a retest of support around 0.0014 before trending higher again. This would likely go hand in hand with Ethereum retesting the lows on its Bitcoin pair.

The Solana chart against its dollar pair looks healthy on the other hand, still holding above the major support level at $120. As long as price respects this area and trades above it, there should be no concern. However, keep in mind that Solana, like the rest of the altcoin market, is currently in a strong downtrend, and unless it clearly breaks this trend and shifts its structure, we should expect the downtrend to continue.

Bullish scenario: Given that Solana is trading in a clear range between $120 and $180, we could see a trend reversal at our current support, followed by a swift move to the upside targeting the range highs and potentially changing the trend character, which could pave the way for a broader sentiment shift and further upside movements. Entries could arise on a retest of current levels, with invalidation if we lose $120 as support.

Bearish scenario: In a bearish scenario, if we lose $120 as support, the current downtrend would likely continue. In that case, potential targets include the psychological level at $100, which is critical to hold in order to avoid further downside. If that level is broken as well, $80 would be a key technical level to watch.

I hope this report provided you with valuable insights into the latest market developments and geopolitical shifts.

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As always, stay informed, stay prepared, and have a fantastic weekend! 🚀

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