Following the recent military escalation between Israel and Iran, BTC and ETH experienced a sharp decline. At that time, we issued a warning signaling a potential bottom with an expected rebound, which has since materialized as prices have recovered above 108,000. However, 110,000 has now failed multiple attempts to hold—“a first surge is powerful, a second fades, a third exhausts.” Could BTC already be showing signs of topping out?

While global crypto-related stocks surged, especially stablecoin-themed equities, the broader crypto market showed no significant momentum. Notably, BTC and ETH are now facing a critical directional choice—how should investors respond?

Technical Signals Raise Concerns

Let’s examine the charts. BTC has been in a two-year bull run since 2023—an historical pattern indicating that after two consecutive years of growth, BTC typically faces at least a yearly-level correction.

Historical trends:

BTC rose from January 2012 to January 2014 (two years), followed by a 1.5-year downtrend;

BTC rose from July 2015 to December 2017 (nearly 2.5 years), followed by a one-year bear market;

BTC rose from March 2020 to December 2021 (two years), followed by a one-year correction;

Currently, BTC has been rising since January 2023 through June 2025—over two and a half years. How long will the upcoming correction last?

The current bull cycle since 2023 has been exceptionally unique: from $15,000 to $110,000, a cumulative gain of over 630%, with zero major pullbacks—only minor washouts during the ascent.

Major capital adopted a “time-for-space” strategy, relying on historical volatility where BTC often crashes sharply, causing most retail holders to exit prematurely. This dynamic reduced upward pressure, allowing every prior resistance level to act as fuel for further rallies. But no market rises forever—risk accumulates during the ascent. When demand begins to lag behind supply, the balance shifts decisively toward bears.

On the monthly chart, a potential double top pattern has emerged, with the neckline support firmly established near $95,000.

BTC broke above $110,000 for the first time in half a year, but despite multiple crises and accelerated capital inflows, it still failed to sustain above this level. On the weekly chart, RSI has formed a clear bearish divergence—unless a violent breakout occurs to relieve the indicator, downside risk remains elevated.

Looking at ETH/BTC provides additional confirmation: the pair has touched the long-term downward trendline on the weekly chart and closed with three consecutive inverted hammer patterns—a highly concerning reversal signal. Overall, both BTC and ETH show significant red flags at the macro level, demanding cautious positioning.

Stablecoin Themed Stocks Siphon Crypto Liquidity

The hottest trend recently has been stablecoin-themed equities. As early as Circle’s IPO, we predicted this sector would go global viral.

CIRCLE launched at $31 and peaked at $165 yesterday—a gain of over five times—valuing the company at $36.7 billion. In crypto terms, this surpasses Dogecoin, which has existed for nearly a decade, placing CIRCLE among the top 10 largest cryptocurrencies by market cap. For the crypto space, this represents a massive liquidity drain.

This wave has swept across major stock markets globally—even in China, where crypto is strictly banned, A-shares linked to crypto or stablecoin-related businesses have seen repeated daily limit-up spikes. This trend will increasingly draw capital away from the crypto ecosystem. While BTC and ETH remain in uptrends (currently undergoing consolidation), most altcoins have already entered a bearish phase—and the bearish momentum is accelerating.

Short-Term Volatility Will Intensify

Several key events loom in the near term. The U.S. Senate will vote on the GENIUS Act at 4:30 AM tomorrow. Passage could reignite the stablecoin rally and provide marginal uplift to the broader crypto market.

On June 19 at 2:00 AM, the Federal Reserve FOMC will release its interest rate decision and economic projections. At 2:30 AM, Fed Chair Powell will hold a policy press conference. With U.S. equity markets closed that day, capital will shift more aggressively into crypto. If the outcome is negative, funds may exit early ahead of the news.

Summary

From a medium-term perspective, BTC and ETH face mounting headwinds, while stablecoin-themed stocks may still offer upside. Short-term, event-driven volatility could trigger rapid spikes and sharp declines. Until BTC firmly holds above $112,000, each surge will prompt me to reduce positions to preserve margin safety—waiting for better entry opportunities or clearer signals of a new bullish phase.

Author: Aaron, ChainThink

Reviewer: Charlie, ChainThink