28 February 2025

We broke the range – but towards the downside. Bitcoin is now trading near $81,000 – a level not seen since Nov. 2024 when the crypto world looked all rosy and filled with hope. Now, as the crypto fear & greed index suggests, the market sentiment is extremely bearish.

As this plays out, we can only sit and watch it unfold.

Or not!

Today, in our Hot Take, we look at key technical trends and when the market can reverse direction.

Let’s dive into it.

Top-3 stories of the week:

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The newsletter is put together by Giottus Crypto Platform. You can read all the previous issues of Cryptogram here.

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WEEKLY MACROS

• Total crypto market cap - $2.63 trillion - DOWN 18.3%    

• Bitcoin price - $79,104 - DOWN 19.7%

• The dollar index (DXY) - 107.38 - UP 0.9%

• Bitcoin Dominance - 60.72% -  DOWN 0.8%

• Crypto Fear and Greed Index - 16 - Market is in Extreme Fear

THE HOT TAKE

Buy the dip or new lows ahead?

Bitcoin (BTC) is facing heightened market uncertainty as price action remains volatile.

After dropping to multi-month lows around $82,160, BTC rebounded moderately. However, investor sentiment remains fragile, with fears of further downside due to weak liquidity and a lack of strong buying pressure.

US President Donald Trump confirmed that tariffs on imports from Canada and Mexico will proceed, set to begin in early March, with new set of tariffs targeting European countries in pipeline. This decision has raised concerns about potential impacts on trade and economic growth. The recent Bybit hack of $1.5 billion, has triggered additional selling pressure. Short-term holders are now realizing losses, leading to increased market stress and potential further capitulation.

CME Gaps and Potential Price Targets

Bitcoin's price movement is being shaped by two clear CME futures gaps - one to the downside and one to the upside. The first gap, formed in November 2024, sits between $78,000 and $80,700, making it a possible target if selling pressure continues.

On the flip side, a new CME gap has developed between $92,700 and $94,000, which could act as a magnet for price recovery if demand strengthens. Historically, Bitcoin has tended to fill such gaps, making both levels critical in the near term.

Technical Analysis and Next Moves

Bitcoin recently tested the $82,000 support level before rebounding to around $85,000 over the past day, indicating a short-term recovery. The 9-day EMA has consistently acted as a resistance level for Bitcoin and is expected to continue limiting upward movements in near term. The overall structure and momentum remain bearish, with the first indication of a potential trend reversal being a decisive reclaim of the $90,000 level by the bulls.

However, should further downside occur, CME gap around $80,000 presents itself as the next logical support zone. Psychological round numbers often act as key price areas, making $80,000 a critical level to monitor.

ETH/BTC levels to watch

On the daily chart, ETH/BTC has been in a descending channel for months, with lower highs and lower lows. However, there are early signs of weakening selling pressure—the RSI shows a bullish divergence, and the 21-day EMA is flattening. A breakout above the 50-day EMA could trigger a move toward 0.032. On the downside, a drop below 0.027 could push the pair toward the channel’s support.

SOL needs a rebound soon

The SOL/USD pair is attempting a rebound after briefly dipping below $150, aligning with the 9-day EMA. Bollinger Bands remain wide, indicating heightened volatility, particularly around the $176 level. The price is trading well below the mean line, with key support at $132 and resistance at $220.

Meanwhile, the RSI is declining toward neutral territory, signalling weak buying momentum. If SOL fails to reclaim $150, further downside movement could follow with critical support at $120.

Key insights for traders

If you're a skilled trader, follow these tips to navigate the market effectively.

• Follow the trend: Use a higher time frame and moving averages (50 & 200 SMA) to spot the trend—price above means uptrend, below means downtrend.

• Wait for a pullback: Instead of jumping in, wait for the price to retrace to a key level like Fibonacci (50% or 61.8%), support, or a moving average.

• Confirm before entering: Look for signals like a strong candlestick pattern, RSI bouncing from oversold, or price breaking a short-term high/low.

• Set targets & stops: Aim for at least a 1:2 risk-to-reward ratio, placing stop-loss at the retracement low/high and using a trailing stop for big moves.

• Manage risk: Keep risk per trade at 1-2% of your capital, using tools like ATR to adjust for market volatility and stay disciplined.

For investors, the $80,000 level for BTC will present a good opportunity to load some bags for rest of the bull market. Altcoins have not yet showed signs of reversal but they are likely to do so, once the BTC low is confirmed.

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If you have any questions or feedback for us, write to us at [email protected]. You can check out the previous issues here.

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.