The crypto market is testing everyone’s resolve right now. Bitcoin dropped below $30K to six-month lows this week, and if you’ve been following my posts over the past couple of months, you know I’ve been increasingly cautious about the macro backdrop since China’s crackdown started feeling real.
But here’s the thing — cautious doesn’t mean sitting on your hands. It means trading smarter and shorter.
The Retracement That Matters
After the latest dip, we saw what looked like a solid bounce. Pretty textbook, actually. If you pull up 30-minute candles on ETHGBP, you can map the retracement levels off the recent high of ~1406 and low of ~1227:
- 60% retracement: ~1334
- 50% retracement: ~1316
- 40% retracement: ~1298
- 30% retracement: ~1280
ETH found support around 1230 — which lines up almost exactly with where it bounced on May 23rd. That’s not a coincidence. When the same level holds twice, it tells you something about where buyers are sitting.
What’s interesting is we haven’t tested all the Fibonacci retracement levels yet. The 78.6% level for ETHGBP sits around 1368, and for BTCUSD, the highest Fibonacci target comes in around $31,956. We got close to that zone before rolling back over — which tells me we’re still very much in a range-bound, uncertain market.
I’m Trading the Chop, Not Fighting It
I’ll be honest — I nearly sold out a nice little Cake position for a 20% gain on the bounce. I hesitated. That was probably a mistake, because I’m still pretty convinced things are heading down again before they go up in any meaningful way.
I’ve been running a similar playbook on BSW — bought in, watched it run up about 40%, and I’ve been earning yield on top of that through their pools. The math on some of these DeFi plays is genuinely compelling when you size them right. A well-placed position can net you enough daily yield to cover a meal or two. It’s not life-changing money, but it adds up — and more importantly, it keeps your capital productive while the broader market figures out what it wants to do.
The key here is I’m not holding these positions with diamond hands. I sold out my short-term wins because I think we’re heading lower. If BTC drops below $30K again — and I think it will — the next leg down could be sharper. That’s the pattern we’ve been seeing: each test of a support level gets weaker until it breaks.
The Macro Backdrop Isn’t Great
I don’t personally subscribe to the “crypto supercycle is dead” narrative, but I can see why it’s gaining traction. The macro backdrop just isn’t as supportive as it was three months ago. Between China’s mining crackdown, regulatory noise globally, and the general risk-off sentiment, the tailwinds have turned into headwinds.
MicroStrategy now holds over 105,000 BTC at an average cost of about $26,080. That’s a useful benchmark — it tells you where at least one very large, very committed buyer’s cost basis sits. If BTC gets down to that $25K-$26K range, I’d start getting pretty comfortable buying again with real conviction.
There was an analyst about a month back calling for $17K. I think that’s extreme, but I wouldn’t dismiss it entirely. Markets have a way of going further than anyone expects in both directions.
My Playbook Right Now
Here’s where I’ve landed: I think ETH moves with BTC regardless of its own technical levels. There’s been a clearly solid push upward on ETH at times, but it gets dragged down every time Bitcoin wobbles. So I’m watching BTC levels as the primary signal.
My approach for the next few weeks:
Trade the bounces. Buy dips into DeFi positions, take profits on 15-25% pops, and don’t get greedy. The bounce this week was a standard retracement — not a reversal.
Stay in DeFi yield. Until we get price stability, I’d rather have my digital assets earning yield in DeFi protocols than sitting in spot positions hoping for a recovery. I was talking about this opportunity after DeFi got crushed, and I still think it’s the right move.
Watch the $30K level on BTC. If it breaks convincingly, I think we see $25K-$26K before any real bottom forms. That’s where I go from trading mode back to accumulation mode.
Keep position sizes modest. This isn’t the time to be a hero. Small bets, quick profits, capital preservation.
The Bottom Line
I’m still hell-bent on the idea that we see more downside before this is over. The bounces are tradeable — and I’m trading them — but I’m not confusing a retracement for a trend change. The Fibonacci levels give us a roadmap, and until we break convincingly above the 78.6% retracement on both ETH and BTC, I’m treating every rally as a selling opportunity.
The opportunity in crypto right now isn’t in holding and hoping. It’s in staying nimble, taking what the market gives you, and being ready to deploy real capital when the dust settles. We’re not there yet — but I think we’re getting closer.
