Bitcoin's Sideways Movement and Ethereum's Risk of Decline: Trader Predicts Movement of Two Cryptocurrencies

• Bitcoin has remained within the same price range for the third week.
• Ethereum has removed local lows but has not fully entered the 4H FVG.
• DXY is testing the lower 4H FVG after a deviation and sharp dump.
• CPI and PPI will be the main macro triggers of the week.

Disclaimer: This material is not financial advice or a call to action. The analysis presented is the private opinion of its author. Incrypted is not responsible for the investment decisions of readers.

Market Analysis - Price Pressures Untouched Extremes and Preparation for Inflation Block

Last week solidified the cryptocurrency market in a state of sticky consolidation. Despite shocking data regarding the U.S. labor market - the number of non-farm payrolls at 162,000 against expectations of 55,000 - local impulses were quickly extinguished by counter volume.

Charts continue to depict accumulation, forming dense liquidity pools on both sides of the current ranges.

Bitcoin - Prolonged Compression and Protection of May's High

Bitcoin is spending its third consecutive week within the same price square. The attempt to realize an upward scenario ended with the collection of local highs, but the chart did not reach the key target zone.

The reversal occurred at the mark of $82,282.8 - to activate the daily price imbalance (Daily FVG) of $82,828-$84,000, buyers fell short by $546. The May high of $82,828.7 remains completely untouched.

The current structure forms a double resistance barrier: last week's high (PWH) of $82,282.8 and the May high of $82,828.7. The former key level of $81,500 has transitioned to the status of interim resistance.

From below, the picture remains frozen. The nearest support is the fresh Daily FVG of $77,000-$78,000. Below lies a dense cascade of unfilled zones: last week's low (PWL) of $76,151.9, the mark of $75,588, historical thresholds of ATH 2024 at $73,881.4 and ATH 2021 at $69,198.7, as well as a deep imbalance of $64,000-$65,000.

August's minimum levels (EQL) around $62,500 still act as a final magnet for large capital.

Indicators confirm the lull: the 4H RSI has stagnated at 48.7 for the second week, while open interest remains at 106,800 with no signs of aggressive accumulation or liquidation of positions.

Scenario A - Support on Imbalance and Breakthrough

Diving into the Daily FVG of $77,000-$78,000 while holding the zone as support. From there, a full impulse is formed towards PWH of $82,282.8 with a pass through the May extreme.
Four-hour chart BTC/USDT.P. Data: TradingView .

Scenario B - Pool Removal and Structure Break

Impulse spike at $82,282.8 with entry above $82,828.7 for forced liquidation of shorts. The absence of price consolidation above the level provokes a harsh correction to 0.5 Fibo W at $72,513.6.
Four-hour chart BTC/USDT.P. Data: TradingView .

Scenario C - Two-Sided Liquidation

Manipulative spike above $82,828.7, immediate reversal to PWL $76,151.9, and further return to the range. The market maker is collecting stops on both sides of the sideways movement in anticipation of a fundamental driver. Four-hour chart BTC/USDT.P. Data: TradingView .

Ethereum - Local Lows and Price Vacuum

Ethereum has shown a similar dynamic but with a focus on the lower boundaries. The chart successfully removed local PWL lows, updating the weekly minimum to $2,355.12.

However, a full entry into the 4H FVG did not occur - the price only touched the upper boundary of the imbalance and returned to the range of $2,355-$2,566, where it has been for the third consecutive week. The upward impulse faded at $2,547.00, falling short by $19 of last month's maximum (PMH).

The main threat to the asset is hidden below the current marks. The price gap of $1,920-$2,220 remains completely untouched. Below are the Daily FVG $1,900-$1,920 and last month's minimum (PML) $1,820.61.

If sellers break the current support, a decline in this zone will occur almost without resistance. Open interest is gradually decreasing to 2.29 million, indicating local unloading of positions.

Scenario A - Dive into FVG and Bounce

The break of the ascending microstructure and movement below $2,355.12 with a full dive into the 4H FVG. Forming a base in the imbalance opens the way to resistance at $2,547-$2,566. Four-hour chart ETH/USDT.P. Data: TradingView .

Scenario B - Holding Structure and Breakout

Protection of pullbacks above $2,440 and further impulse through PWH $2,547.00 with a confident hold above PMH $2,566.40 for movement beyond $2,600. Four-hour chart ETH/USDT.P. Data: TradingView .

Scenario C - Spike of Monthly Maximum and Dump

Liquidity extraction above $2,566.40, collection of short stops, and sharp reversal with a breach of the entire sideways movement down to the untouched imbalance of $2,100-$2,080.

Four-hour chart ETH/USDT.P. Data: TradingView .

Fundamental Triggers of the Week

• CPI inflation report. This is the key marker of the current week. Data on consumer prices will be the last argument for the U.S. Federal Reserve (Fed) before the meeting on September 16. Acceleration of inflation will solidify the hawkish stance of the regulator, while a slowdown will return risk appetite;
• Legislative activity in the Senate. The return of American lawmakers on September 15 is accompanied by expectations of a vote on the CLARITY Act. The decision could provoke a sharp spike in volatility across the market;
• Geopolitical factor. The conflict in the Middle East has moved to the background, but a sudden escalation could trigger an disproportionately strong dump of risk assets.

The current position of quotes in the middle of the ranges dictates strict risk management rules: opening new trades at current marks is mathematically unprofitable.

Short positions accumulated from the upper limits remain relevant. Decision-making points are exclusively located at the edges of trading ranges: reaction in the block $82,282-$82,828 for Bitcoin to assess shorts and the zone $77,000-$78,000 for profit-taking and considering speculative purchases.

Unfilled daily gaps below remain the main mid-term targets for market makers.

Are we ready to meet the inflation block with open positions or is it better to wait for the charts to break out of the three-week sideways movements?

Dollar Index - Dump After Deviation, Testing 4H FVG and Calm Before the Inflation Storm

Retrospective and Current Position

Last week for the Dollar Index ended with a notable dump. After a manipulative throw over PWH with a new high of 99.863 and liquidity gathering from shorts, DXY faced a harsh rejection against Friday's labor market data, i.e., NFP.

As a result, the price vertically pierced intermediate levels and collapsed into the lower 4H FVG zone 98,900-99,100, where it is currently trying to find a bottom at 98,954.

At this moment, the dollar is locally oversold, and the RSI on the 4H is around 37. The market has taken a pause. Monday will proceed under reduced liquidity due to Labor Day in the USA, so the main resolution is postponed to the second half of the week when the key inflation block will be released.

Technical Picture and Levels

The structure is squeezed between obvious magnets:

• from above: broken PML 99,692, fresh PWH 99,863, and unfilled 4H FVG above 99,600. These are targets for a corrective bounce;
• from below: the current working 4H FVG 98,900-99,100, which serves as the first line of defense for buyers. Just below it is PWL 98,831 and a deeper untouched 4H FVG in the block 98,400-98,700.

Any decision regarding the Fed rate on September 16 will be processed from these boundaries. We highlight three scenarios for the inflation week.

Scenario A - Loss of Support and Capitulation to Lower Imbalance

DXY does not hold the current base in the 4H FVG 98,900-99,100. A break of PWL 98,831 occurs, after which the index accelerates into the deep 4H FVG 98,400-98,700.

This is the most positive scenario for risk assets, particularly Bitcoin and Ethereum, which will give them fuel to break through the upper limits of the current sideways movements. DXY Index Chart. Data: TradingView .

Scenario B - Holding Base and V-Shaped Reversal

The current 4H FVG serves as a solid support. The index accumulates positions and on strong inflation data, i.e., PPI/CPI, issues a powerful upward impulse, breaking resistance at 99,692 and heading towards PWH 99,863.

This is the scenario where the crypto market will go to fill the unfilled daily gaps left below. DXY Index Chart. Data: TradingView .

Scenario C - Manipulative PWL Removal and Aggressive Buyback

The price sluggishly trades ahead of news release, then makes a sharp squeeze under PWL 98,831 to gather liquidity from longs, not reaching the deep FVG and V-shaped buying back to 99,692.

This is a classic trap before a strong macroeconomic release. DXY Index Chart. Data: TradingView .

Fundamental Triggers of the Week

• Monday, September 7 ― Labor Day in the USA. The absence of Wall Street means a thin market. Movements may be sharp but not structural;
• Thursday, September 10, 15:30 ― Producer Price Index (PPI) and unemployment claims. A warm-up before the main day;
• Friday, September 11, 15:30 ― Consumer Price Index (CPI) and core CPI. These are the final figures for the Fed. An acceleration in inflation will mean a pump for the DXY, while a slowdown will lead to a dump of the dollar and a green light for the crypto market.

Trading Plan

Today, in light of the holiday in the USA, entering the market means trading market noise. We closely monitor the reaction of the DXY in the current 4H FVG.

If the dollar starts to show weakness and slides down to PWL 98.831 before the CPI release, this will be a leading signal for long positions on major crypto assets.