Following yesterday's significant rise in Bitcoin and Ethereum, which marked the largest gains in recent weeks, there has been a notable correction that highlights the challenging situation in which market participants revise their portfolios and sentiment.

According to SoSoValue, recent days have seen mixed inflows and outflows in spot BTC and ETH ETFs, indicating volatility that reflects the uncertainty hanging over the cryptocurrency market ahead of an important policy meeting of the Federal Reserve. This volatility is also indicative of the market's dependence on macroeconomic data, which have been somewhat lacking lately.

Investors are exercising caution, closely monitoring the Federal Reserve's policy decisions and a further agenda. A rate cut is expected to support risk assets, including the cryptocurrency market. However, despite the short-term volatility, the fundamental factors supporting the long-term growth of BTC and ETH remain intact. As institutional adoption increases, the development of the DeFi ecosystem, and the forthcoming approval of several legislative initiatives aimed at fostering the digital assets market, all create a favourable environment for continued growth. Long-term oriented investors view the current disarray as an opportunity to accumulate positions in leading cryptocurrencies at more attractive prices.

In the coming weeks, the flow dynamics into spot ETFs will serve as a key indicator of market sentiment and price direction. Sustained inflows may signal a resumption of the bullish trend, while further outflows could intensify market pressure, increasing the likelihood of a correction. Market participants should remain vigilant and adapt to changing conditions by developing strategies aligned with their individual risk profiles and investment goals.

Trading recommendations

Regarding Bitcoin's technical picture, buyers are currently targeting a return to the $116,300 level, which would pave the way to $118,400, and from there, it will be a short distance to the $120,600 level. The most extended target will be the high around $121,700; surpassing this level would indicate a strengthening bullish market. In case of a Bitcoin decline, I expect buyers to step in at $113,800. A return of the trading instrument below this area could quickly push BTC down to around $111,600, with the most distant target being the $109,300 region.

For Ethereum's technical outlook, a clear consolidation above the $4,186 level opens a direct path to $4,299. The most extended target will be the high around $4,403; exceeding this would signal increased buyer interest and a strengthening bullish market. Should Ethereum decline, I anticipate buyers at $4,071. A return of the trading instrument below this area could quickly drop ETH to around $3,949, with the most distant target being the $3,818 region.

What's on the chart

• The red lines represent support and resistance levels, where price is expected to either pause or react sharply.
• The green line shows the 50-day moving average.
• The blue line is the 100-day moving average.
• The lime line is the 200-day moving average.

Price testing or crossing any of these moving averages often either halts movement or injects fresh momentum into the market.