Bitcoin's recent decline has been rapid and fierce. The first strong support we anticipated at 69000 was only slightly resisted before being broken. The trend then continuously fell below the second strong support at 63000, plunging to 60000 before rebounding and beginning to stabilize.
69000 This area is the shallow bear position we defined, and we had high hopes for it, but faced with a reality as fragile as paper, we need to update our thoughts on the upcoming market. The trend has formed, the shallow bear is unlikely, and the deep bear has become a reality!
Looking back at 2025, the most common phrase we hear is that the four-year cycle of Bitcoin has failed, but the market in the past few months has given us a loud slap in the face with reality. As we said, the cycle may be weakened, but it will never fail!
From a larger cycle perspective, Bitcoin has broken through two major levels of support in such a short time, indicating that 60,000 is not the bottom, and we need to look further down.
The reasoning is simple, fast and ruthless. This wave of decline structurally belongs to the major C wave drop. According to historical patterns, such C wave declines will generally follow a five-wave structure, with five waves lower than three waves. Therefore, after a rebound, it is highly likely that new lows will follow!
From the external environment perspective, Powell's term will end on May 15, 2026. Optimistically, if Trump's nominee is confirmed, the new chairman will be dovish, advocating for easing. However, historically, it generally takes 2 to 3 months for the market to react to easing, so the new cycle may begin around August...
Moreover, there are still uncertainties regarding the nomination. Opponents are also active. If the new chairman fails to get confirmed in time, the Federal Reserve may need to have Vice Chairman Philip Jefferson temporarily act as chairman. He is hawkish and concerned about inflation, which is not friendly to easing. Therefore, the external environment is quite complicated, and it's not as simple as changing personnel in May and easing in June!
To sum it up in one sentence: internal and external troubles, the bottom has not yet arrived, everyone should prepare psychologically for at least half a year of long-term resistance!
Back to the market, where will the bottom be? Let's roughly deduce it.
Looking at it from our previous perspective, there are still several key positions downwards. First, from the annual line perspective, the lows of the last two bear markets were near the MA7 position of the annual line. Currently, MA7 is around 54638, which is worth paying attention to.
Let's take a look at the Fibonacci of the bullish candlestick for 2024. The 0.236 position is 54388, which basically aligns with the MA7 position. This means the support strength here is quite strong!
Looking at the weekly chart, the important moving average MA233 is currently at 56654, which is roughly in the same range. This means that the 54000 to 57000 range has consolidated several large supports. Adding in the extreme volatility caused by a series of liquidations, the bottom is likely to appear between 51000 and 57000!
From a strategic perspective, entering in batches below 60,000 will definitely not be a problem. If a black swan event pushes it down to the 40,000 range, do not hesitate; go all in! Note that this discussion is only for spot trading; for contract operations, proceed at your own risk!
Lastly, let's talk about the short to medium-term market situation on the daily chart. The current rebound is the main tone, finding opportunities to go long is much safer than going short. The short-term pressure at 71000 has already been touched today, and the rebound will continue. The next pressure level to watch is between 74000 and 75000, and above that, we will face the significant pressure level of 80000.
There is a significant downward gap at CME. After the gap, it accelerated downwards, so we temporarily judge this as a downward breakout gap, and the likelihood of it being filled is very low. Therefore, the lower edge or halfway of the gap is a massive pressure point; it could very well be the end of this rebound. We need to be aware of this!
Reflecting on all our viewpoints since August, the major trend projections have been completely correct. The upcoming market remains dangerous, so everyone should prioritize caution and cherish the moment!
To summarize the operational thoughts: in the short term, we are currently fully invested, waiting for Bitcoin to rebound between 75000 and 80000 to consider making a swing trade. If it pulls back, we will buy back the spot; in the medium to long term, a reversal must stabilize above 82000 USD on the daily chart to have an upward trend, so for now, we will focus on swings, buying high and selling low. We will make judgments based on the current market situation, which is more rational.
