Earlier today, Bitcoin rapidly returned to the $110,000 mark. The start of the season of corporate reports in the US, which may turn out to be less positive than many expect, growing trade tensions between the US and China, and significant outflows from spot ETFs have all contributed to a renewed decline in risk appetite. Last week's historic crypto market crash is also still fresh in traders' minds.

On Tuesday, US spot ETFs for Bitcoin and Ethereum saw a combined net outflow of $755 million. These withdrawals accelerated amid a sharp drop in open interest, indicating a reduction in leveraged positions. This shift has pushed many crypto traders into a defensive stance.

Large institutional players — previously key drivers of Bitcoin and Ethereum's rally — now appear to be pulling capital out, putting considerable pressure on prices. While outflows are evident, they don't necessarily indicate a shift in long-term investment strategies or broad profit-taking. Withdrawals during panic phases are not unusual and often reflect short-term sentiment rather than structural changes.

The decline in leverage suggests that traders are becoming more risk-averse, scaling back positions in anticipation of further price drops. After nearly $20 billion in long liquidations late last week, few would bet on an aggressive rally fueled by excessive borrowing — at least not in the near term.

In the short term, the outlook for Bitcoin and Ethereum remains uncertain. Continued drops in open interest and ETF outflows may result in further downward pressure. Investors should remain cautious and account for potential volatility when making decisions. While the long-term outlook for the crypto market may still be positive, the current environment calls for prudence and a conservative approach.

Macroeconomic tensions are also adding to the pressure. Renewed US-China trade frictions, underscored by 100% tariffs on Chinese imports and fresh reports of export restrictions from Beijing, are further dampening market sentiment.

Trading recommendations

Bitcoin technical outlook

Buyers are currently targeting a return to $112,200, which would open the path to $114,200, followed closely by $116,300. The ultimate upside target is the $118,400 zone — a breakout above this level would confirm bullish market strength. In case of a decline, support is expected at $109,900. A breakdown below this area could quickly push BTC toward $108,600, with the final support level at $106,700.

Ethereum technical outlook

A solid close above $4,037 would open the door to $4,318. The most ambitious upside target lies at $4,403, a breakout of which would reinforce bullish momentum and attract increased buying interest. If Ethereum drops, buyers are expected around $3,858. A fall below this level could trigger a decline toward $3,717, with the final support zone near $3,505.

What's on the chart

• The red lines represent support and resistance levels, where price is expected to either pause or react sharply.
• The green line shows the 50-day moving average.
• The blue line is the 100-day moving average.
• The lime line is the 200-day moving average.

Price testing or crossing any of these moving averages often either halts movement or injects fresh momentum into the market.