TL;DR

• BTC is down & ETH is down

• BTC over-performed ETH this week 

• Bitcoin dominance is down

• The hot coin we look at this week is $S

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BTC & ETH Market Update 📈

Crypto is down this week, with BTC down by 11.1% and ETH down by 15.3%:

Bitcoin dominance has decreased over the week, starting from 58.1% to a high of 59.05% and ending at 57.6%. Investor sentiment, regulatory changes, technological advancements, and the overall growth of the cryptocurrency sector shape Bitcoin's market dominance. Its reputation as "digital gold" also enhances its position, making it a key player in the market.

It’s going to be interesting to see whether this trend will continue in the short term, as capital in crypto tends to flow initially to BTC and then further out on the risk-curve, starting with altcoins like ETH and then into mid- or low-cap coins.

Bitcoin’s price action remains volatile after a sharp sell-off saw BTC drop to a 2025 low of $78,300 before rebounding to an intra-day high of $85,120.

Despite the recovery, market analysts remain divided on whether Bitcoin has formed a bottom or if the recent bounce is a trap for overleveraged bulls. Traders now anticipate range-bound trading in the short term as the market establishes new support and resistance levels.

The Feb. 28 rebound to $85,000 initially sparked optimism among traders, but Bitcoin failed to secure a higher daily close, casting doubt on the sustainability of the rally. Data from TRDR.io revealed a strong spot bid on Coinbase when BTC dipped to $78,300. However, sustaining this momentum remains a key challenge.

Market analyst Magus expects Bitcoin to trade within a $72,000–$85,000 range in the coming weeks, indicating a period of price consolidation. He shared a chart on X illustrating his expectations, stating, “Expecting BTC to build a range like this now.”

Meanwhile, trader Horse pointed out that Bitcoin’s weekend price action could weaken further due to traders using BTC as a hedge against potential market-moving comments from former U.S. President Donald Trump. “I’m guessing that BTC returns over the weekends will continue to go more negative than they already are, as tradfi uses it to hedge for anything Trump says before Sunday futs open,” he said.

Despite the recent price drop, Bitcoin’s 29% decline from its all-time high of $110,000 is not unusual. Crypto trader Intern highlighted that 30% corrections are a common feature of Bitcoin bull markets and have historically presented strong buying opportunities. His analysis suggests that while volatility may persist, long-term investors should not be alarmed by the current downturn.

Wintermute trader Jake O echoed this sentiment, describing the current market conditions as a significant dislocation between sentiment and fundamentals. He compared the setup to August 2024, when Bitcoin briefly dipped below $50,000 due to mass liquidations before recovering. “For anyone with long-term conviction in the space, the current disconnect between positioning/sentiment vs fundamentals has never looked better,” he said.

A key development noted by HighStrike’s head of options and crypto trading, JJ, is that Coinbase spot bids were “filled” for the first time since Bitcoin’s September bottom at $52,000. This suggests an initial shift in market dynamics, with buyers stepping in at lower levels. However, it remains to be seen whether this will translate into sustained upside momentum.

From a technical perspective, Chartered Market Analyst Aksel Kibar described Bitcoin’s drop to $78,000 as a “sharp retest”, though he refrained from calling it a confirmed bottom.

Despite the recent rebound, Bitcoin’s daily Relative Strength Index (RSI) remains in deeply oversold territory, and the prevailing lower high and lower low candlestick formations signal caution. If Bitcoin fails to close above key resistance levels, the downtrend could persist in the near term.

Bitcoin’s recent price action suggests a period of choppy trading as the market stabilizes after a significant drawdown. Analysts point to a likely range between $72,000 and $85,000 in the short term, while historical data supports the idea that these corrections are normal in bull markets.

The presence of spot buying activity on Coinbase provides some optimism, but technical signals indicate that Bitcoin’s recovery is not yet confirmed. Traders should remain cautious as the market navigates potential headwinds.

Ethereum (ETH) is nearing a two-year low weekly close, with the price dropping to $2,070—its lowest level since January 2024.

The 7.4% decline on February 28 led to over $200 million in liquidations, reflecting heightened bearish pressure. Crypto investment manager 0xLouisT noted that Ethereum’s social sentiment is at its lowest in the past 12 months.

ETH has dropped 24.5% in the past week, marking its worst performance since 2022. If the price closes below $2,100, the double-top pattern on the weekly chart could trigger a further 28% decline toward $1,500.

Crypto investor Jason Pizzino warned that Ethereum would be “in more trouble” if it closes below the $2,000-$2,100 range, reinforcing the importance of holding above key support.

Despite the bearish technical outlook, OnchainHQ’s Leon Waidmann observed that ETH exchange balances continue to decline alongside price, suggesting accumulation by investors.

Glassnode data also points to a cost-basis distribution price of $1,890, indicating a potential retest if bearish momentum persists. Meanwhile, crypto trader Morin identified a demand zone between $2,100 and $1,900, suggesting ETH could stabilize if selling pressure eases.

Regulatory uncertainty is another headwind for Ethereum. The U.S. Securities and Exchange Commission (SEC) has postponed its decision on Ether ETF options trading on Cboe until May 2025.

This follows a similar delay for Nasdaq ISE’s application to list options tied to BlackRock’s iShares Ethereum Trust (ETHA). Institutional demand for spot Ether ETFs remains strong, with Fidelity’s Ethereum Fund holding $1.3 billion in assets and BlackRock’s ETH ETF surpassing $3.7 billion.

Ethereum’s ability to hold the $2,000 level will be key in the coming weeks as traders assess the impact of technical patterns, investor accumulation, and regulatory developments.

Ethereum (ETHUSD) Analysis:

As of February 28, 2025, Ethereum is trading at $2,130.24, having broken below the $2,230 support level. The price remains within a horizontal trend channel, suggesting continued movement in the same range. Immediate resistance is now at $2,230, while further downside remains possible amid weak volume balance and high volatility.

Bitcoin (BTCUSD) Analysis:

As of February 28, 2025, Bitcoin (BTC) is trading at $80,184, down 5.69% for the day. The short-term outlook is bearish, with resistance at $92,300 and no clear support, indicating further downside risk. In the medium term, BTC remains weak after breaking below key support at $92,364, with the next major support at $70,000. The long-term trend is still positive, with BTC holding within a rising trend channel and key support at $72,000. A breakdown below this level could shift the outlook further bearish.

Expected Trading Ranges:

• Ethereum (ETH): Support at $2,000; Resistance at $2,230.

• Bitcoin (BTC): Support at $72,000; Resistance at $92,300

Market Outlook:

Bitcoin is range-bound between $72,000 and $85,000 after a 29% correction. While strong Coinbase bids offer support, the downtrend persists with lower highs. A retest of $78,000 is possible if momentum fades, but historically, such drawdowns present buying opportunities. A higher daily close is needed to confirm renewed strength.

Ethereum must hold the $2,000-$2,100 range to avoid further downside toward $1,900. Accumulation signals suggest long-term confidence, but a break lower could trigger increased volatility. A rebound to $2,300 remains possible if support holds.

BTC/ETH ratio has seen an increase:

Over the last six days, the BTC to ETH exchange rate has generally increased, rising from 34.92 ETH on Feb 22 to 37.97 ETH on Feb 28, marking an overall 8.7% increase. Despite a brief dip on Feb 25 (-2.20%), the trend remained upward, with notable gains on Feb 24 (6.43%) and Feb 28 (2.65%). This suggests that Bitcoin has been gaining strength against Ethereum over the past week.

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Hot Coin: $S🔥

In this week’s newsletter, we dive into Sonic (prev. FTM)’s token with the ticker: $S.

The price action and volume have been growing consistently and don’t seem to stop any time soon:

What is the project about?

Sonic is a high-performance blockchain designed to be the fastest EVM-compatible Layer 1 network, offering 10,000 TPS and sub-second finality. It prioritizes both speed and scalability while maintaining robust security and seamless user experiences.

One of Sonic’s key innovations is its Fee Monetization (FeeM) program, which rewards developers with up to 90% of the fees generated by their applications. This model transforms traditional revenue-sharing approaches by directly incentivizing developers based on user activity.

Additionally, Sonic enhances liquidity and interoperability through the Sonic Gateway, a secure, native bridge that seamlessly connects users and developers to Ethereum’s vast liquidity ecosystem. The bridge’s fail-safe mechanism ensures asset security under all conditions.

Why is the project exciting now?

There are four main reasons why we feature this project in this week’s newsletter:

• Strategic partnerships with industry leaders

• Innovative fee monetization and airdrop strategy

• Sonic × Pierre Gasly: F1 collaboration

• Unmatched Speed and Scalability

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