Bitcoin and Ethereum have made another push higher and are getting closer to a full-fledged "bull" trend. We still cannot name the reasons why the new sharp rise in digital assets began. Of course, it all comes down to supply and demand. Demand surged, so the price rose. However, why demand increased is hard to say, even after the fact. Let me remind you that the last two major events for the crypto world were negative. Central banks (notably the Federal Reserve) began tightening monetary policy, which raises demand for safe assets like bank deposits and government bonds. The Clarity Act, a bill intended to regulate digital-asset investing in the US, again failed to pass through Congress. By logic, the crypto market should have fallen rather than show a new explosive rally. However, as we warned earlier, pumps do not need reasons, and there will be no warning before they start.

Meanwhile, it has become clear that the latest upward leg in Bitcoin was not driven by US investors, which partly explains Monday's move. According to CryptoQuant data, demand on the US crypto exchange Coinbase has barely increased recently. Demand is rising on the international exchange Binance. Thus, American investors are indeed not rushing to buy new Bitcoin due to the lack of clear and understandable crypto-sector regulation that the Clarity Act might have provided, and also because Fed tightening sharply boosts Treasury and bank deposit yields.

Of course, this does not mean that no US investor bought any Bitcoin in recent weeks and months. However, the demand structure shows that American investors are not in a leading position. CryptoQuant also reported that it is not yet confident about a continued recovery to the ATH. Company analysts noted that historically it was US spot demand that formed the basis for a long and strong bull trend — something that is again not being seen now.

Trading recommendations for BTC/USD

Bitcoin shows all the signs of the start of a new bull trend. This trend begins, as usual, with a pump that has no concrete or clear reasons. The Fed has not started cutting interest rates, and the Clarity Act has not been passed. In the near term, on the daily timeframe, Bitcoin may react to the bearish FVG, which could trigger a downward correction. We also note to traders that the current breakout beyond the daily consolidation channel may be a deviation — yes, a deep deviation, but still a deviation. On the 4?hour timeframe, long positions can be considered locally from the most recent bullish FVG. However, we currently favor a corrective scenario.

Trading recommendations for ETH/USD

On the daily timeframe, the technical picture for Ethereum changed completely in just a few days. Ethereum is now looking toward a new uptrend. However, traders should base decisions on the weekly chart, where Ethereum is heading toward $4,800 — the upper band of a five?year sideways channel. On the daily chart, the first bearish FVG did not produce a significant price reaction; the next FVG might. Bitcoin also filled the nearest bearish FVG, so both cryptocurrencies may begin a correction in the near term. In both cases, the rise in digital assets is related to a pump. There are currently more fundamental reasons for a drop in both cryptocurrencies than for further growth. But you can't tell the market or market?makers what to do.

Comments on the charts

CHOCH is a change of character / break of the trend structure. Liquidity means traders' Stop?Losses that market makers use to build their positions. FVG stands for a Fair Value Gap (area of price inefficiency). The price often moves quickly through such areas, indicating the absence of one side in the market. Later, the price tends to return and react to these zones. IFVG is an Inverted Fair Value Gap. After a return to such a zone, the price does not react but impulsively breaks through and then tests it from the other side.

OB means an Order Block. A candle on which a market maker opened a position in order to harvest liquidity and then form their own position in the opposite direction.