Bitcoin, which had been showing signs of the bullish momentum this week, dropped sharply during this morning's trading session, completely erasing yesterday's gains. This suggests that many institutional players are still not ready to buy even at current levels, which could lead to a deeper and more prolonged correction of the asset toward the $100,000 area.

Besides, technical analysis also points to strong resistance levels that Bitcoin has been unable to break through in recent days. The failure to hold above these levels may have caused disappointment among traders and triggered stop-loss orders, further accelerating the downward move.

However, it's important to remember that the cryptocurrency market is known for its volatility, and sharp declines are often followed by explosive rallies. It is clear that a new growth driver for the crypto market could be the September Federal Reserve meeting. Until then, it's hard to expect any breakout. Without clear signals of policy easing from the Fed or positive news capable of pushing the market upward, consolidation or slight downward movement is likely to remain the main scenario. Should the regulator decide to lower interest rates, this could significantly support the crypto market. Lower borrowing costs make risk assets like cryptocurrencies more attractive to investors.

As for Ethereum, recent data shows that Ethereum's exchange reserves have dropped to a 3-year low. This fact alone indicates a long-term horizon among holders and their confidence in the prospects of the second-largest cryptocurrency by market capitalization. A decrease in ETH supply on exchanges usually signals that investors prefer to store their assets off trading platforms—possibly in staking, DeFi protocols, or simply in cold wallets in anticipation of future growth. In addition, this waning supply on exchanges could potentially fuel an upward price movement if demand increases. Limited availability creates scarcity, which in turn may trigger price growth.

Trading recommendations

Bitcoin technical outlook Buyers are currently aiming to reclaim the $111,600 level, which opens a direct path toward $113,200, and from there, the next milestone is $115,600. The ultimate target is the high around $117,600; a breakout above this level would signal a strengthening bull market. In case of a decline, buyers are expected around the $109,700 mark. A return of the asset below this area could quickly push BTC down to around $108,200, with the most distant target being the $106,700 zone.

Ethereum technical outlook A clear consolidation above the $4,421 level opens the way toward $4,499. The ultimate target is the high around $4,601; breaking through this level would confirm a strengthening bull market and growing buyer interest. If the price declines, buyers are expected at the $4,328 level. A drop back below this area could push ETH down to around $4,223, with the most distant target being the $4,132 area.

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.