Cryptocurrency Market Analysis: Bitcoin and Ethereum Downtrend Outlook

Cryptocurrency Market Downtrend Continues

Bitcoin and Ethereum continue to exhibit downward momentum as the prevailing downtrend, which began last year, remains intact. Technical indicators suggest that the correction cycle is ongoing, with no clear signals of a trend reversal in the current market environment.

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Macroeconomic factors continue to weigh on risk assets. Potential interest rate hikes by the Federal Reserve in 2026, driven by persistent inflation, create a challenging environment for cryptocurrencies. Concurrently, institutional capital flows are increasingly shifting toward tech equities and the artificial intelligence sector, which currently present more attractive risk-adjusted profiles.

Mining Sector Transition and Market Forecasts

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The mining landscape is undergoing a structural shift as firms reallocate computing power to provide services for the AI sector. Jiang Zhuoer, CEO of BTC.TOP, has projected a potential decline in Bitcoin to the $42,000–$44,000 range by the end of the year. This outlook is supported by technical analysis of the mNAV indicator, which suggests a market bottom may materialize within the next six months.

Market participants have observed that 2025 marked the first historical instance where Bitcoin failed to appreciate following a halving event. This development challenges traditional assumptions regarding the post-halving price performance and highlights the shift in market dynamics as miners prioritize AI infrastructure over crypto mining profitability.

Technical Analysis: BTC/USD and ETH/USD

Bitcoin remains in a clear downtrend with an initial target of $57,500, representing the 61.8% Fibonacci retracement level of the preceding three-year uptrend. The $68,000–$70,700 zone serves as a significant Fair Value Gap (FVG) and a Point of Interest (POI) for maintaining short positions, as the bullish structure on the 4-hour timeframe has been invalidated.

Ethereum is similarly positioned within a sustained downtrend initiated in August of last year. Price targets for the asset currently stand at $1,391 and $788. Consistent with Bitcoin, the 4-hour timeframe for Ethereum confirms a break in bullish structure, with recent bearish FVGs providing reliable signals for the continuation of the downward trend.

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