Bitcoin & Ethereum Outlook: Approaching an Inflection Point

Markets move fast — narratives even faster.

This past week we witnessed how quickly sentiment can flip when just a bit of uncertainty is removed from the table. After the President introduced a 90-day pause on tariffs, both traditional markets and crypto reacted with explosive upside moves. Bitcoin, Ethereum, and equities rallied 20%+ in some cases — a classic reminder that markets are forward-looking and often overreact in both directions.

The Pause that Fueled the Bounce

The market hates uncertainty more than bad news. The tariff pause didn’t solve anything long-term — but it gave investors time. Time to see whether real progress will be made between the US and its trade partners over the next 3 months. Until then, the focus shifts:

→ Will the bounce hold?

→ Is this the start of a new trend or just a relief rally?

Why I Stayed Calmed When Fear Was Everywhere

I don’t blame anyone who reduced risk or stepped away from the market — the macro headlines have been ugly. But part of my mission is to offer data-driven clarity when emotions take over.

When fear is extreme, the obvious move is not to blindly buy or sell. It’s essential to understand what stage of the market cycle we are in. Context matters. Sometimes the best trade is no trade — even doing nothing is a decision, and often, it’s the hardest one to make.

Over the past week, I’ve shared several posts highlighting why I believed this was a time to stay patient or even accumulate.

This blog will walk you through some of the data I used to reach that conclusion — and provide links to those posts for transparency. The Data Behind My View

1. Bitcoin On-chain & Off-chain Risk Model

Our flagship model (supporting 24 coins) — which blends on-chain metrics (from blockchain activity) with off-chain market data (e.g. price, volatility, volume) — was signalling that Bitcoin risk was dropping into the 20-30% prime accumulation zone (see X post).

This was triggered on April 8th — two days before the market’s strong rally.

For context, the same model showed a risk level of 76.6% back on November 24th, 2024 (at $98K) — when everyone was euphoric, calling for Bitcoin to go from $100K to $150K in a straight line.

→ You can explore the interactive chart here 2. Bitcoin Price vs. Power Law Regression

Another critical signal for me was Bitcoin’s deviation from its long-term power law regression line — a model I’ve discussed many times before.

At the time of the post, this deviation was around -22%, indicating that Bitcoin was undervalued — especially considering we are still early in the bull cycle. Historically, these negative deviations during the early stages of a bull run have provided excellent long-term risk-reward opportunities.

On the flip side, what really makes me cautious is when this deviation moves above +70%. That’s when I start to believe we are entering a high-risk zone where a significant correction becomes more probable.

Of course, that doesn’t mean you sell everything the moment we hit those levels — strong assets like Bitcoin can stay overvalued for extended periods. But history shows that when the price stretches far above (>70%) its power law trend the risk of a sharp pullback increases.

3. Short-term Bubble Risk: No Signs of Overheating

A simple but powerful tool to assess if Bitcoin is overextended in the short term.

This metric is built by dividing Bitcoin’s price by its 20-week Simple Moving Average (20wSMA) — which is part of the well-known Bitcoin Bull Market Support Band (20wSMA & 21wEMA).

When this ratio (the red line in the chart) stays below 1 (the green line), it suggests that Bitcoin is not overheated. Historically, when the ratio stays below 1 shows that the probability of a crash caused by speculative excess is low.

As you can see in the chart, for the past several months this metric has remained below the green line — confirming that the recent price action was not driven by unsustainable speculation or leverage.

4. Whale Behavior: Smart Money Was Accumulating

Another important piece of the puzzle for me is whale behavior — the activity of large Bitcoin holders.

Using on-chain data, we can track whether wallets holding large amounts of Bitcoin are accumulating or distributing. Historically, whales tend to accumulate during fear and distribute during euphoria.

Over the past few weeks, the data was clear: whales were adding to their positions. They weren’t selling into weakness — they were quietly accumulating.

This is classic smart money behavior. When retail investors panic and exit the market, whales step in and take the other side of the trade.

Ethereum Bottom Indicator Flashed

On April 8th — just two days before the market rally — I shared on social media that Ethereum had reached a price level that was becoming very attractive to me (see X post).

This signal came from a model I personally developed — an equation designed to estimate Ethereum’s bottoming zones based on its long-term price behavior.

The idea is simple: I track Ethereum’s price relative to its long-term trend and calculate standard deviation bands around it. Historically, when Ethereum’s price approaches the -1 standard deviation line (the orange line on the chart), it has been a prime accumulation zone.

There’s always risk in any model — for example, during the Covid crash, the price briefly dropped even lower — but in most cycles, this level has marked excellent long-term buying opportunities.

On April 8th, Ethereum was again approaching this critical zone — a rare signal that told me risk was low and potential reward was high.

Final Thoughts

One important date to keep in mind for the markets is April 15th — the so-called “Tax Day” in the U.S. Historically, this has marked a significant turning point.

Up until Tax Day, we often see selling pressure as investors look to settle their taxes — whether by liquidating assets to pay for them or by managing their portfolios for tax reasons. This selling can create short-term headwinds in the market. But after Tax Day, we often see a reset — the selling pressure subsides, and markets can start to regain momentum.

At the same time, global liquidity is starting to shift. China has already taken steps to boost liquidity, and soon, the U.S. will join with the end of Quantitative Tightening (QT) and the anticipated rate cuts. This combination of factors is setting up for a potentially significant market reset.

For anyone still uncertain about entering the market, now may be one of the most important periods to do your homework. The conditions are aligning, and the risk-reward potential could be significant for those prepared to make informed decisions. If you’re interested in diving deeper into the data I’ve mentioned, including the charts I’ve shown in this post, you can explore them in their interactive format on our platform. Our tools provide real-time data and insights to help guide your decision-making.