Liquidity Rotation Pressures Crypto Market in the Short Term
Over the next 1–2 weeks, the crypto market is likely to face increased headwinds as capital continues to rotate into traditional safe-haven assets such as gold and silver, both of which are consistently printing new all-time highs (ATHs). This liquidity shift has reduced effective capital inflows into crypto, thereby elevating overall market risk.
On the daily (D) timeframe, the false breakout observed a few sessions ago formed a classic bull trap, triggering a wave of long liquidations amounting to billions of USD. More importantly, the weekly (W) candle that has just closed presents a notably bearish structure, signaling weakening momentum in both the short- and medium-term outlook.
Given the current conditions and heading into this week and next, capital preservation should be the top priority. Long and buy positions should only be considered after Bitcoin and Ethereum complete a corrective phase and establish clearer confirmation signals on the weekly timeframe. Entering trades later, once trend structure is validated, is generally safer than attempting to anticipate a bottom in a high-risk zone.
That said, selective opportunities may still arise among low-cap assets, where price action can decouple from the broader market due to market maker (MM)–driven moves. However, such rallies are highly idiosyncratic and should not be interpreted as a sign of broader market recovery.
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