⚖️ Bullish arguments: Potential start of the third wave on the weekly chart
1. Wave patterns and cycle signals
According to cryptocurrency analyst Jason Pizzino's Elliott Wave Theory model, Bitcoin is currently in the fourth wave adjustment phase. If it breaks the downward trend on the monthly chart, the fifth wave could push the total market value of the cryptocurrency market to a peak of $4.4 trillion by April 2025. Recently, Bitcoin broke out of a multi-month descending wedge pattern, releasing potential bullish reversal signals. If it breaks the $86,000 resistance after a consolidation on the daily level, it may initiate the upward third wave.
2. Macroeconomic environment and risk aversion demand
The U.S. dollar index hits a three-year low (99.4), combined with the uncertainty of Federal Reserve policy, gold has surpassed historical highs to $3,357 per ounce, accelerating capital flow into safe-haven assets. Bitcoin's status as 'digital gold' is reinforced, and if the dollar continues to weaken, BTC is likely to attract capital inflows. Additionally, U.S. tariff policies are raising inflation expectations, and the Federal Reserve may be forced to restart quantitative easing, further supporting Bitcoin's anti-inflation narrative.
3. On-chain data and institutional movements
Bitcoin whales continue to accumulate, with addresses holding 100-1000 BTC absorbing over 300% of the annual issuance. The amount of BTC held on exchanges has dropped to the lowest level since 2018, indicating strong confidence among long-term holders. At the same time, the total net asset value of BTC ETFs has reached $93.6 billion, with institutional funds continuously flowing in.
⚖️ Bearish arguments: Monthly volume divergence
1. Volume and market momentum divergence
Although Bitcoin's price remains high and fluctuating, the monthly volume level shows a trend of shrinkage, indicating insufficient buying power in the market. Data from CoinGecko shows that the total market value of cryptocurrencies fell by 18.6% in the first quarter of 2025, with Ethereum’s gains being reversed, and overall market momentum is weak.
2. Short-term holder selling pressure risk
On-chain data shows that approximately 170,000 BTC is being moved from the wallets of short-term holders who have held for 3-6 months. Such behavior typically indicates profit-taking or panic selling, which could trigger significant price volatility. In contrast, the movement volume of long-term holders is extremely low, intensifying market divergence.
3. Policy and liquidity risks
The Federal Reserve maintains a 'no market rescue' stance, coupled with fluctuations in U.S. Treasury yields (e.g., the 10-year yield drops to 4.40%), suppressing short-term speculative sentiment towards risk assets. Additionally, BTC liquidity on exchanges has fallen to historic lows, and a sudden large-scale sell-off could lead to a price flash crash due to insufficient liquidity.
🔍 Observation checklist and key signals
1. Key breakthrough point (CME futures gap theory)
- Upward target: If the BTC daily closing price effectively breaks the $86,000 resistance level (with a required volume increase of 25%), it may challenge the psychological barrier of $90,000, even triggering a liquidity test towards $92,000.
- Historical correlation: After gold breaks $3,357, historical data shows that Bitcoin may break past its previous highs within the next five months, forming a lag effect.
2. Invalid signal (bearish confirmation condition)
- Weekly closing price falls below $83,000: The current support range is $83,000-$83,500. If this level is lost, it may retrace to $80,000 and trigger a chain liquidation risk in the derivatives market.
- Technical pattern invalidation: If the price remains stagnant for an extended period without breaking through, it may create a false breakout of an 'ascending wedge', leading to a trend reversal.
💡 Comprehensive logic and strategy suggestions
The current market is at a critical node of bullish and bearish game:
- Bullish advantages: Macroeconomic risk aversion demand, institutional accumulation, technical pattern breakout signals.
- Bearish risks: Volume divergence, short-term holder selling pressure, liquidity traps.
Operational suggestions:
- Breakthrough following strategy: Confirming the $86,000 breakthrough and gradually building positions, targeting $88,000-$90,000, with a stop-loss set below $84,500.
- Defensive positioning: If the price breaks below the $83,000 support, positions can be moderately reduced or hedged, waiting for bottom-fishing opportunities around $80,000.
Note: Market analysis is subjective and should be combined with individual risk preferences for independent decision-making to avoid high-leverage operations.