Bitcoin entered the weekend on shaky ground, suffering a 1.22 percent loss on Saturday, followed by a significant 8.88 percent drop on Sunday. At the opening of the new week, BTC’s daily chart showed the price slipping deep into the TBO cloud formation, signaling an intensifying downward trend.
Support levels breached as decline takes hold
Last Wednesday, Bitcoin dropped below $79,000, marking the loss of a key support that had underpinned its uptrend since late March. This breach was followed by another failed attempt to hold a critical support line on Friday, with the price closing below it.
The daily Relative Strength Index (RSI) fell sharply to 33.45, just above the 31.45 pivot level last seen in April. The TBO indicator revealed two distinct bearish divergences on Friday and over the weekend. Meanwhile, the On-Balance Volume (OBV) indicator slipped under its moving average. Analysts described these developments as compression ahead of a potential further downturn.
MooninPapa, a well-known analyst, commented that when Bitcoin enters the cloud, it typically moves sideways before another pullback is likely. He stressed, “The cloud’s lower boundary at $75,644 now stands as the most critical level.”
Taken together, the penetration of the TBO cloud, breached support zones, and consecutive bearish indicators all suggest that a short-term recovery in Bitcoin is becoming increasingly difficult.
Stablecoin dominance breaks a multi-year line
Amid Bitcoin’s slide, stablecoin dominance drew attention by breaking above its key red reversal line on Friday and rising further through the weekend. This move marked the first time since the 2021 market peak that the stablecoin dominance chart approached the upper band of its TBO cloud.
At the weekly close, stablecoin dominance’s RSI echoed conditions previously associated with major market tops and subsequent sharp corrections. Analysts cautioned that if this ratio closes above the TBO cloud, it could target the 13 percent mark.
A simultaneous rise in both stablecoin and Bitcoin dominance indicates a flow of capital from the wider market into $BTC. In contrast, climbing stablecoin dominance alongside falling Bitcoin share points to a more cautious market mood.
Ethereum and ETHBTC face persistent pressure
Ethereum also struggled to gain ground. After briefly pushing above its own cloud on April 17, ETH quickly fell back under sell pressure on the next trading day. Currently, technical analysts interpret the chart as a “bear flag,” which could see the price pulling back as far as $1,000 if the pattern runs its course.
ETH dominance has slipped since forming a peak in April and continues to trend weakly. The same analysis notes that the ETHBTC pair broke its TBO support, with the weekly RSI hitting a new low, extending a five-year losing streak in the pair.
On Friday, CME futures closed with an unfilled gap at $78,675 for Bitcoin and $2,205 for Ethereum. Historically, such CME gaps tend to fill, but their timing remains unpredictable.
Furthermore, the overall crypto market flashed another bearish divergence. Should the total market cap drop below its cloud, $2.18 trillion would stand as the next major support point.
Macro signals add to the negative outlook
On the macro front, the DXY dollar index has a potential upside target at 99.516, while USDJPY climbing to the 160 mark has sparked renewed concern. The VIX volatility index remains in a low-fear zone within its cloud. Collectively, current macro indicators are seen as insufficient to support a strong Bitcoin rebound in the near term.
While a short-term technical bounce in Bitcoin is possible, continued movement within the TBO cloud, broken support areas, and persistent negative indicators suggest that the crypto market may remain in a period of consolidation.
