• De-escalation in the Middle East eases pressure on risk assets.
• Ethereum has approached a decision zone near $1732-$1760.
• The DXY is trading near 99.530 ahead of the Fed decision and the FOMC projections.

Disclaimer: this material is not financial advice or a call to action. The analysis presented is the private opinion of its author. Incrypted is not responsible for readers' investment decisions.

Bitcoin ― de-escalation breaks the short structure

The asset reached previously set targets ― we saw a technical return of the price into the upper four-hour price imbalance (4H FVG) around $65,500, right below the previous week's high (PWH) level. The market maker executed a scenario of unloading local oversold conditions after sweeping the liquidity pool at the equal lows (EQL) at the $60,691 mark.

However, the weekend dramatically changed the fundamental picture. The escalation between Iran and the US abruptly gave way to news of a resolution of the conflict and preparations for the signing of a peace agreement on June 19.

For the markets this means the removal of geopolitical pressure and a weakening of defensive positions in the Dollar Index (DXY). This opens the way for a rebound in risk assets.

The main threat this week ― the classic market trap «buy the rumor, sell the news» closer to the 19th. The situation is complicated by the meeting of the US Federal Reserve (Fed) on June 17, where the determining factor will be the first full-format speech by the regulator's new chair, Kevin Warsh.

Priority scenarios on the bitcoin chart:

Scenario A ― local risk-on

A local technical pullback into the nearest 4H FVG around $64,000, a stop sweep below the current zone and a V-shaped impulse upward with the goal of testing the all-time high at $69,198.

Scenario B ― deep position-building

A more aggressive correction to the lower 4H FVG in the $62,000 range. This implies a hard flush of late buyers and a subsequent powerful move to marks above $69,000.

Scenario C ― a news trap

A manipulative price rise upward on a positive backdrop, a test of $69,000 and a subsequent cascading crash in sync with the stock market.

The goal ― a full sweep of the equal lows at $60,691 and a move into the global block of $58,000-$52,000. This option will switch on instantly in case the peace agreements fall through.

Risk factors: an overly rapid shift to peace talks raises questions. In parallel, the S&P 500 index is trading at highs without any meaningful corrections.

Layer this onto low summer liquidity ― and we get an ideal environment for false breakouts.

Tactics: we move current short positions to breakeven. Buying from current marks on the news carries unjustified risk. It makes sense to wait for a reaction from the $62,000-$64,000 support levels.

Ethereum ― a decision point

The structure of the leading altcoin has become significantly clearer. The asset was aggressively bought up from the local bottom at $1560, and the price is now testing the PWH at the $1732 mark, running into the 4H FVG resistance zone of $1732-$1760.

From below, reliable support is formed by the FVG of $1640-$1680 and the previous week's low (PWL) at $1602. Above, a price magnet remains ― the unfilled problem block of $1840-$1880.

A decline in bitcoin dominance amid the geopolitical de-escalation creates favorable conditions for a rotation of capital into altcoins. The key marker for further movement is the nature of the impulse. A jagged, emotional rise will lead to a quick counter-trend, while a steady one will lead to consolidation of positions.

Priority scenarios on the Ethereum chart:

Scenario A — technical growth

A controlled pullback into the lower support block of $1640-$1680 to refuel with liquidity, after which comes a directional impulse overlapping the upper cluster of $1840-$1880.

Scenario B — the illusion of an altseason

A pullback-free breakout of the current $1732-$1760 resistance, the formation of false confidence among retail and a subsequent hard reversal to update lows below $1560.

Scenario C — liquidity grab and crash

A sharp price spike straight to the upper FVG of $1840-$1880, a large player locking in positions against late buyers and a cascading drop beyond the PWL at $1560.

Tactics: strict synchronization with bitcoin. The outcome of the peace agreement on the 19th and the Fed's rhetoric on June 17 will be the main catalysts. We practice taking profit in parts, strict margin control and stops at breakeven.

The Dollar Index ― geopolitical de-escalation, a fork before the Fed and new liquidity zones

Last week played out in a harsh inflationary regime. As we saw from the producer price index (PPI) reports, industrial pressure supported the dollar and forced the index to test a local high.

However, over the weekend the disposition changed. The sudden announcement of a Middle East peace agreement for June 19 removed from the market the defensive bid that had been feeding the DXY. The index corrected and is now trading around 99.530.

The new five-day stretch concentrates all attention on the Fed's decision on Wednesday. This is the hour of reckoning for the American currency ― Kevin Warsh's rhetoric and the updated FOMC economic projections will decide whether the dollar gets fuel for a new wave of growth or goes into a prolonged nosedive.

The technical picture

On the four-hour timeframe, the dollar index is squeezed between strong inefficiency zones. The index is trading right below the monthly high and testing local volume clusters.

Key structural levels:

• previous week's high (PWH) ― 100.314. This is the main resistance above;
• previous month's high (PMH) ― 99.544. A positional battle is currently underway around it;
• previous month's low (PML) ― 97.625. This is the global medium-term target;
• inefficiency zones (4H FVG): one unfilled imbalance is located above the PWH, while three more clear cascading FVGs are placed below the current price ― around 99.30, 98.70 and 97.40.

Current trading scenarios:

Scenario A ― technical liquidity grab and decline (positive for cryptocurrencies)

The index makes a local rise, fills the nearest 4H FVG around 99.70-99.80, catches a hard rejection below the PWH and turns down amid dovish Fed rhetoric.

Within this scenario the price cascades through supports, enters the lower 4H FVG around 99.00 and heads toward the medium-term low. Such an outcome would free the hands of bitcoin buyers and launch a wave of rotation into altcoins.

Scenario B ― a local pullback followed by a buy-up (a threat to long positions)

The index slides down locally, fully fills the cascade of the nearest 4H FVGs and tests the 99.10-99.20 zone.

There the market maker finds buyer volume, forms a V-shaped reversal and with a powerful impulse returns the price above the PMH at 99.544, followed by a move to a new high at 100.314. For the crypto market this would be a signal of a resumption of the systemic short trend.

Scenario C ― a pullback-free assault on the highs (a bloodbath for digital assets)

This is the harshest scenario. The Fed's statements turn out to be maximally hawkish, while the Middle East deal falls apart. Without preliminary pullbacks, the DXY breaks the PMH, impulsively absorbs the PWH at 100.314 and flies to test the upper unfilled 4H FVG.

In that case bitcoin and the entire rest of the digital asset spectrum will end up under a cascading liquidation press.

News triggers of the week:

• Wednesday, June 17, 15:30 ― retail sales volume (m/m) for May. A leading indicator of consumer activity;
• Wednesday, June 17, 21:00 ― the Fed interest rate decision and the FOMC economic projections. The epicenter of volatility;
• Wednesday, June 17, 21:30 ― the FOMC press conference. Kevin Warsh's direct remarks will set the dollar's trend for weeks ahead;
• Thursday, June 18, 15:30 ― the Philadelphia Fed manufacturing activity index and weekly jobless claims;
• Friday, June 19 ― a bank holiday in the US (Juneteenth). A thin market and empty order books in the second half of the day.

Sentiment and tactics

The main rule remains unchanged: a rising DXY methodically sucks liquidity out of risk assets.

Until Wednesday evening, positional waiting will prevail in the market. One should not open large positions in high-beta pairs at the moments when the Fed meeting results are published.

Because of the Friday holiday in the US, the market maker will try to trade out the entire volume of Wednesday and Thursday as aggressively as possible. It is better to wait for the daily candles to close after the Fed press conference, assess the DXY's position relative to the key 4H FVG zones and only then make systemic trading decisions.

Source: Incrypted