Bitcoin and Ethereum are still trading not far from their one?year lows and are undergoing corrections. Over the past two weeks, both Ethereum and Bitcoin have recovered slightly, but there are still no signs that the downtrend that began last year has ended. The fundamental backdrop for the crypto segment remains weak, mainly reflected in low spot demand, capital rotation into the artificial?intelligence sector, and the Fed's commitment to bringing inflation to 2%, which implies at least a prolonged tight monetary stance. Therefore, we still see no grounds for a sustained rally in Bitcoin or Ethereum.

Meanwhile, Michael Saylor's company Strategy — which recently executed its first large Bitcoin sale citing a lack of liquidity — has introduced a new analytical tool, the Bitcoin Banking Adoption Index. This index shows the degree of involvement of the world's largest banks in the crypto segment. It's worth noting up front that the ranking includes only the 25 largest banks and currently shows just 32% integration overall. Fidelity tops the list with a score of 71%. The index evaluates four aspects: Bitcoin trading, the presence or absence of crypto products and derivatives, lending, and senior?management support.

In our view, this index is fairly subjective and does not reflect the real situation. Remember that banks are financial institutions whose primary goal is to earn profit — they are businesses. Thus, they adapt to their clients' demands. If there is demand for such services and products, a bank will introduce them; if not, it won't. So the degree of Bitcoin adoption by banks depends directly on adoption by consumers, traders and investors. Essentially, the Bitcoin Banking Adoption Index is a neat illustrative statistic. Strategy is clearly trying to signal that Bitcoin's popularity is growing in the corporate sector, which is naturally aimed at attracting new investment.

Trading recommendations for BTC/USD

Bitcoin continues to form a full downtrend. We still expect a drop toward $57,500 (the 61.8% Fibonacci level of the three-year uptrend), although that level has essentially already been tested. We do not believe the downtrend will end there. The most recent bearish FVG was formed in the $68,000–$70,700 area on the daily timeframe, so that zone serves as a POI for short positions in the coming weeks. On the 4-hour timeframe, Bitcoin is in a second corrective swing, but sell trades remain more attractive since any rally now is, a priori, a correction. At present, the 4?hour chart only shows a bullish FVG.

Trading recommendations for ETH/USD

On the daily timeframe, the downtrend that began in August last year continues. The key sell pattern remains the bearish order block on the weekly timeframe. We do not believe the current downtrend is over, since there are no signs of reversal for either Bitcoin or Ether. The market is currently flat. Therefore, in the near term, we would watch for deviations to the upper boundary of the sideways channel to open shorts with targets of $1,680 and $1,505. At the moment, the upper band of the sideways channel has been worked off, so a deviation and bearish patterns may form.

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.