In the ups and downs of the cryptocurrency market, every fluctuation of Bitcoin (BTC) and Ethereum (ETH) touches the hearts of countless investors. Recently, Bitcoin's key trend line has broken down, and Ethereum's key support level has been lost, causing the market to enter a period of adjustment. This article will analyze the subsequent trends of Bitcoin and Ethereum from multiple dimensions including technical, funding, and macroeconomic perspectives, providing references for investors.
1. Bitcoin (BTC): The Path of Fluctuation Seeking a Bottom After Trend Reversal
(1) Fundamental Shift in Trend Structure
The ascending channel connecting $74,500-$98,200-$113,000 was confirmed to have broken down on August 18, marking a milestone event. The ascending channel is a direct reflection of the sustained dominance of bullish forces in the market, while a valid breakdown signifies a fundamental shift in the balance of forces, temporarily halting the mid-term upward trend and leading the market into a mid-term adjustment phase.
From historical data, after similar trend lines break, the market usually requires a 3-6 week consolidation and repair period. During this time, bulls and bears will engage in an intense struggle around key support and resistance levels, and market sentiment will gradually shift from optimism to caution.
(2) Intense Struggle of Short-term Support and Resistance
Currently, the 6H EMA200 average provides short-term support for Bitcoin, temporarily curtailing the downtrend. The EMA200 average, as an important mid-term trend indicator, holds significant support strength. However, the lack of rebound momentum indicates that the bulls have not yet formed an effective counterforce.
In terms of short-term support levels, the 6H EMA200 average (approximately $114,500) and $112,500 (previous high and psychological level) are important defensive lines for short-term bulls. If these support levels are breached, Bitcoin may further test down to $110,000.
On the resistance side, the lower boundary of the original ascending channel (approximately $118,000) and the psychological level of $120,000 constitute strong resistance. Only when Bitcoin can break through these resistance levels with volume can the trend reversal be confirmed; otherwise, the probability of the support level being breached again will increase.
(3) Dual Impact of Macroeconomics and Capital
In terms of the macro economy, the policy direction of the Federal Reserve has a significant impact on the cryptocurrency market. The PPI data released on August 14 exceeded expectations (up 0.9% month-over-month), which weakened the market's expectation for a 50 basis point rate cut in September, putting short-term pressure on Bitcoin. However, in the long run, if inflation can continue to decline, the expectation for a rate cut in February 2025 may still drive Bitcoin to break through $160,000.
In terms of funding, the inflow of institutional capital provides certain support for Bitcoin. The holdings of Bitcoin spot ETFs have reached 1.296 million BTC (accounting for 6.5% of circulation), and the BlackRock IBIT fund has been adding an average of 4,300 BTC per month. If this influx of capital can continue, the holdings may exceed 1.5 million by the end of the year, further tightening circulation and supporting Bitcoin's price.
(4) Signals from Technical Indicators and Operational Strategies
Short-term technical indicators show that Bitcoin is facing retracement pressure. The 4H RSI is approaching 48 (in a weak range), and the MACD red bars are shortening, indicating a marginal weakening of bullish momentum, necessitating vigilance against the risk of a second bottom.
However, from a long-term perspective, the bullish logic has not changed. After the Bollinger Bands contract, an upward direction is chosen, with the Fibonacci extension indicator pointing to a target of $166,000, and the spike in the fear index VIX suggests that the market may rebound from the bottom.
In terms of trading strategies, in the short term, if Bitcoin rebounds to the $118,000-$120,000 range and fails to break through, investors can take short positions with a stop loss reference of $122,000; when it pulls back to around $112,500, one can try going long, targeting $116,000.
In the medium to long term, if Bitcoin can stabilize above $115,000 and break through $120,000, the next target will point directly to $127,865.
2. Ethereum (ETH): Range Consolidation and Directional Choices After Support Breach
(1) Chain Reaction of Key Support Level Breach
$4,320 serves as the last line of defense for Ethereum's 5-wave upward structure; its breach marks the end of the small-scale upward cycle, leading the market into an adjustment phase. The loss of this support level is akin to the first domino falling, triggering a series of chain reactions, and the bullish sentiment towards Ethereum is significantly affected.
When first touching $4,320, based on the key support's struggle, entering a long position was a reasonable choice. However, the market's movement exceeded expectations, as 'whales' dropped two structural points in a row, plunging to $4,225, making market participants aware of the strong bearish force.
(2) Support-Resistance Swap and Formation of Consolidation Ranges
$4,320 has turned from a support level to a resistance level, and a rebound to this area has seen a retracement of $70-$80, perfectly illustrating the technical principle of 'support-resistance swap'. Once a support level is effectively broken, that position becomes an exit point for previously trapped bulls, thus turning into new resistance.
Currently, Ethereum has formed a consolidation range of $4,289-$4,395. It has effectively tested the upper limit (at $4,395) three times and retested the lower limit (at $4,289) twice, aligning with the characteristic of 'breaking out after 2-3 waves of consolidation'. Within this range, both bulls and bears are temporarily in a state of balance.
(3) Long-term Support from Ecosystem and Capital
Despite a short-term price retracement, Ethereum's ecosystem expansion and capital flow provide long-term support. Institutional capital is positioning itself against the trend, with whales recently accumulating 171,000 ETH (approximately $670 million), and BlackRock's ETHA fund seeing net inflows exceeding $1 billion, indicating long-term confidence in Ethereum.
The liquidity injection from stablecoins and DeFi also provides foundational support for Ethereum's price. Tether recently minted $8 billion USDT, with on-chain data showing that over 60% flowed into the Ethereum ecosystem, driving an 8% month-over-month increase in the total value locked (TVL) in DeFi.
(4) Technical Indicators and Operational Strategies
The daily RSI has dropped to 38 (oversold area), and the MACD histogram has shortened, indicating that the bearish pressure is nearing its end, suggesting a technical rebound is needed.
The key signal for the medium to long-term trend is that if Ethereum can stabilize above $4,350 and break through $4,480, it may open a new upward cycle, targeting the historical high of $4,800; if it falls below $4,000, one should be cautious of the confirmation of an M-top pattern.
In terms of trading strategy, in the short term, one can try to go long near $4,150 with a stop loss at $4,100 and a target of $4,300; when rebounding to near $4,390, one can set up short positions with a stop loss at $4,450 and a target of $4,200.
In the medium to long term, if it breaks above $4,480 with a trading volume exceeding $30 billion, one can chase long positions up to $4,800; if it falls below $4,000, one should observe and wait for a new support level to be confirmed.
3. Core Risk Alerts and Response Strategies
(1) Uncertainty of Macroeconomic Policies
A shift in Federal Reserve policy is a potential black swan event. If Powell releases hawkish signals (such as delaying interest rate cuts) at the Jackson Hole meeting on August 22, it could trigger panic selling in the market, impacting the cryptocurrency market.
Moreover, the uncertainty of regulatory policies cannot be ignored. The U.S. SEC's review attitude towards cryptocurrency ETFs, the progress of the Trump administration's Bitcoin reserve plan, etc., may affect market sentiment and lead to price fluctuations.
(2) Structural Risks of Market Liquidity
The leverage pressure in the derivatives market is significant. Currently, the long-short ratio of Bitcoin perpetual contracts has dropped to 1.2:1; if the price falls below $112,500, it may trigger over $1 billion in liquidations, exacerbating short-term volatility.
The liquidity exhaustion of altcoins is also a potential risk. A decline in ETH may trigger a synchronous weakness in altcoins, necessitating vigilance against the 'blood-sucking effect' of capital flowing back from altcoins to mainstream coins, which could impact the overall liquidity of the cryptocurrency market.
(3) Dynamic Adjustment of Operational Recommendations
In terms of position management, it is recommended to keep the total position within 30% to avoid excessive exposure to short-term volatility and reduce risk.
In terms of profit-taking and stop-loss, long positions should have a stop loss reference of 3% below the support level, while short positions should have a stop loss reference of 2% above the resistance level, strictly enforcing discipline to avoid emotional trading.
At the same time, attention should be paid to cross-asset correlations, especially the positive correlation between the U.S. tech sector (such as the Nasdaq 100 index) and Bitcoin. If U.S. stocks decline, it may indirectly suppress cryptocurrency prices.
4. Conclusion: Seizing Opportunities Amidst Fluctuations
The subsequent trends of Bitcoin and Ethereum will present a pattern of 'short-term fluctuations seeking a bottom, medium to long-term upward'.
The struggle between bulls and bears in the $112,500-$120,000 range for Bitcoin will determine the short-term direction. If it stabilizes above $115,000 and breaks through $120,000, the probability of hitting $160,000 by February 2025 is high.
The consolidation repair in the $4,000-$4,480 range for Ethereum is the main theme in the medium term. If it breaks above $4,480, a new upward cycle may commence, targeting the historical high of $4,800.
Investors need to closely monitor the Federal Reserve's policy trends, institutional capital flows, and changes in the signals from technical indicators, seizing structural opportunities while controlling risks, and moving steadily in the fluctuations of the cryptocurrency market.
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