Dalio does not believe in central banks

[Ben Graham]

Bitcoin continues to pull the entire crypto market with it, but now downward rather than upward. Recall that a sell signal was formed on the daily TF (alongside the weekly TF), which we had been waiting for about a month. Since fundamental background is not driving Bitcoin's movement at this time, we focus on technical factors.

Recall that all the key growth drivers of recent years have long since played out for Bitcoin, with a margin: the halving, expectations of Fed easing, favorable crypto conditions in the US under Donald Trump, and the rollout of ETF instruments. Of course, if investors of all stripes continue to buy, Bitcoin will rise even without new growth drivers. But in that case, technical signs of a new uptrend should appear. At the moment, there are none.

Meanwhile, Ray Dalio, head of the hedge fund Bridgewater Associates, said in an interview that central banks around the world are unlikely to want to build Bitcoin reserves. Recall that the hope for central banks is shared by many famous investors. They expect regulators to begin buying Bitcoin, which would naturally raise its price. However, Dalio doubts this scenario because Bitcoin is not stable, private, or secure. According to Dalio, hacking the Bitcoin network is currently a rather difficult task. But in a few years, with the development of AI and supercomputers, this may become possible. Then any Bitcoin holder would risk losing their crypto capital.

Dalio also noted that money serves as both a medium of exchange and a store of value, and that it outperforms all cryptocurrencies, which are very rarely (globally) used as a means of payment or exchange. Bitcoin, in its 17th year of existence, essentially remains a high-risk investment instrument, not a payment method. The payment function is handled much better by USDT, whose price is stable and always equals the US dollar.

Recommendations for trading BTC/USD:

Bitcoin continues to form a full-fledged downtrend. The two nearest targets (the bullish OB in the $98,000–$102,700 area and the bullish FVG) have been worked off; now expect a fall to $70,800 (the 50.0% Fibonacci level of the three-year uptrend). Of the POI areas for selling, only the bearish FVG on the daily TF in the $96,800–$98,000 area can be highlighted. This pattern was worked off and received a price reaction. Now a sell trade can be managed while waiting for various confirmations to form on both TFs.

Recommendations for trading ETH/USD:

On the daily TF, a downtrend continues to form. The key sell pattern was and remains the bearish order block on the weekly TF. The movement provoked by this signal should be strong and long-lasting. The correction in the crypto market may be complete. On the daily TF, there are no clear POI areas for selling Ether. There are none on the 4-hour TF either, so in the near term, one should orient by Bitcoin, which has already formed a sell signal on the daily chart. The $2,717 and $2,618 decline targets remain relevant — and these are only the nearest targets. Ether's long-term downside potential is much greater.

Note the liquidity pool on the daily chart in the form of a trendline. Below that line are stop losses and pending sell orders. Those orders are liquidity for market makers. We are almost certain that Ether will show a drop below the trendline.

Explanations of the illustrations:

CHOCH – break of trend structure.

Liquidity – liquidity; traders' stop losses that market makers use to accumulate their positions.

FVG – area of price inefficiency. Price moves very quickly through such areas, indicating a complete absence of one side in the market. Subsequently price tends to return and receive a reaction from such areas.

IFVG – inverted area of price inefficiency. After returning to such an area, the price does not receive a reaction but impulsively breaks through it and then tests it from the other side.

OB – order block. The candle on which a market maker opened a position to take liquidity and form their own position in the opposite direction.

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