Recommendations for trading in the cryptocurrency market for January 16

[Ben Graham]

The bitcoin price pulled back after an unsuccessful attempt to hold above $97,000. Trading is now around $95,500, which increases the chances of a larger correction toward $93,000. Ether also came under pressure and is now trading around $3,300, leaving the possibility of further growth if there is a reason for it.

Meanwhile, according to CryptoQuant data, short-term holders sold 41,800 BTC over the past 24 hours, roughly $4 billion. This indicates that traders are taking profits after the rapid rise earlier this week.

Such large profit-taking by short-term holders is already putting pressure on bitcoin's price. The natural question arises: is this merely a temporary correction after the sharp rise, or a harbinger of a deeper decline? To answer this, several factors must be considered. First, the macroeconomic backdrop remains uncertain, including the Federal Reserve's restrictive policy stance. Second, long-term holders' activity also plays an important role. If they continue to accumulate bitcoin, this could mitigate the negative impact of short-term selling. Third, the lack of systematic inflows of new money into spot ETFs also signals the caution that new market participants are currently exercising.

One cannot rule out the psychological factor. FOMO (Fear Of Missing Out) and the fear of missing potential profits, which fueled bitcoin's rise this week, may turn into panic and a desire to avoid losses, triggering another wave of selling.

Regarding the intraday strategy for the crypto market, I will continue to act on large pullbacks in bitcoin and ether, expecting the long-term bull market to continue.

As for short-term trading, the strategy and conditions are described below.

Bitcoin

Scenario for buying

Scenario No. 1: I will buy bitcoin today upon reaching an entry point around $95,800 with a target to rise to $96,500. Around $96,500, I will exit longs and sell immediately on the rebound. Before buying on a breakout, make sure the 50-day moving average is below the current price and the Awesome indicator is above zero.

Scenario No. 2: Bitcoin can be bought at the lower boundary at $95,400 if there is no market reaction to its downside breakout, aiming for $95,800 and $96,500.

Scenario for selling

Scenario No. 1: I will sell bitcoin today upon reaching an entry point around $95,400 with a target to fall to $94,700. Around $94,700, I will exit shorts and buy immediately on the rebound. Before selling on a breakout, make sure the 50-day moving average is above the current price and the Awesome indicator is below zero.

Scenario No. 2: Bitcoin can be sold from the upper boundary at $95,800 if there is no market reaction to its breakout to the upside, aiming for $95,400 and $94,700.

Ethereum

Scenario for buying

Scenario No. 1: I will buy ether today upon reaching an entry point around $3,316 with a target to rise to $3,346. Around $3,346, I will exit longs and sell immediately on the rebound. Before buying on a breakout, make sure the 50-day moving average is below the current price and the Awesome indicator is above zero.

Scenario No. 2: Ether can be bought at the lower boundary at $3,298 if there is no market reaction to its downside breakout, aiming for $3,316 and $3,346.

Scenario for selling

Scenario No. 1: I will sell ether today upon reaching an entry point around $3,298 with a target to fall to $3,271. Around $3,271, I will exit shorts and buy immediately on the rebound. Before selling on a breakout, make sure the 50-day moving average is above the current price and the Awesome indicator is below zero.

Scenario No. 2: Ether can be sold from the upper boundary at $3,316 if there is no market reaction to its breakout to the upside, aiming for $3,298 and $3,271.

The material has been provided by InstaForex Company - www.instaforex.com