Bitcoin & Ethereum Forecast: Crypto Winter Risk Grows

What to Know

• Bitcoin is testing major support at $60,000 amid weak risk sentiment
• A break below $60,000 could open downside toward $55,000 or even $38,000
• Ethereum is threatening the $1,800 level with $1,500 as the next potential target
• Institutional positioning limits aggressive dip-buying during sharp declines
• Tariff uncertainty and fragile global risk appetite weigh on crypto markets

Bitcoin and Ethereum

The backdrop for cryptocurrency and pretty much everything else right now revolves around tariffs and the concerns as to where we go next. The Supreme Court in the United States struck down those tariffs only to see the president go through another route and start levying tariffs. Really at the end of the day, there does not seem to be any relief for that.

At this point, when you look at the risk appetite around the world, it is tentative at best. When you start talking about Bitcoin and Ethereum, you are talking about way out on the risk appetite spectrum. After all, there is no real-world use case for any crypto at the moment, not on any type of scale at least. This is all about what might happen in 20 years and therefore it is a risky investment.

Bitcoin

The Bitcoin chart looks horrific and I am not going to sugarcoat it. If Bitcoin falls through the $60,000$ level, it could really unravel, perhaps down to $55,000$. After that we could be talking about $38,000$. It is that bad right now.

The best-case scenario is to go sideways and defend $60,000$, but quite frankly, you would need to see weeks if not months of sideways action to get people taking the risk in this market going forward because it is a different market than it was the last couple of crypto winters. There are institutions involved and institutions do not chase assets that drop 20% a month.

That is essentially what we have seen here with the exception of a little bit of quiet trading around the holidays. Ultimately, it is not a market that is to be messed around with right now and unfortunately for the rest of crypto, if Bitcoin does not do well, nobody else does. Watch this $60,000$ level; we break down below there, you will see a lot of ugly things happening in other assets.

ETH/USD

Speaking of ugly things happening in other assets, we now have Ethereum threatening $1,800$ and there is nothing on this chart that suggests that it is going to hold. Quite frankly, I think we are going to $1,500$ pretty quickly and why not? If Bitcoin breaks down, nobody is going to want Ethereum either.

We just do not have that killer must-have application or ecosystem that cryptocurrency desperately needs to make it relevant. Ethereum is also an institutionally held asset, although on a much smaller scale, and they of course won’t be throwing millions of dollars into something that just cannot hold its own in the markets.

I think we are looking at a protracted crypto winter. However, if we were to turn around and take out the $2,250$ level to the upside that could be the beginning of something pretty special in Ethereum, but I just do not see that right now. I do not see the catalyst and if traditional assets are doing so-so at the moment, Bitcoin and Ethereum are going to truly struggle.

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