Trading recommendations for the cryptocurrency market on January 26

[Ben Graham]

Bitcoin has collapsed amid new risks facing the American economy. During Asian trading hours, Bitcoin dropped to around $86,000 before recovering to $87,000. Ethereum reached $2,780 before recovering to around $2,870.

Uncertainty over the U.S. budget, exacerbated by Democrats' threat to block funding for the Department of Homeland Security over immigration policy disagreements, has become a catalyst for panic in the cryptocurrency market. The statement about a possible veto on the budget if funds for DHS are not considered separately from measures limiting the powers of immigration services has created chaos among investors who fear the unpredictability of the political situation.

An additional factor has been the escalation of trade tensions between the U.S. and Canada. A new round of conflict and the risk of imposing 100% tariffs due to Canada's partnership with China have prompted investors to flee from risk. Cryptocurrencies, perceived as a risky instrument, have been hit with a double blow. The price collapse in the cryptocurrency market has resulted from this combination of negative factors, reflecting growing investor concerns about the future of the global economy and political stability.

In the near future, no strong recovery in the cryptocurrency market is expected.

As for intraday strategies in the cryptocurrency market, I will continue to act based on any significant pullbacks in Bitcoin and Ethereum, anticipating the continuation of the long-term bull market, which has not disappeared.

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

Bitcoin

Buy Scenario

Scenario #1: I will buy Bitcoin today when it reaches the entry point around $88,000, with a target of growth to $88,800. At $88,800, I plan to exit the longs and sell immediately on the rebound. Before buying on a breakout, ensure the 50-day moving average is below the current price and the Awesome indicator is above zero.

Scenario #2: I can buy Bitcoin from the lower boundary of $87,600 if there is no market reaction to its breakout in the opposite direction to levels $88,000 and $88,800.

Sell Scenario

Scenario #1: I will sell Bitcoin today when it reaches the entry point around $87,600, with a target to decline to $86,600. At $86,600, I plan to exit the shorts and buy immediately on the rebound. Before selling on a breakout, ensure the 50-day moving average is above the current price and the Awesome indicator is below zero.

Scenario #2: I can sell Bitcoin from the upper boundary of $88,000 if there is no market reaction to its breakout in the opposite direction to levels $87,600 and $86,600.

Ethereum

Buy Scenario

Scenario #1: I will buy Ethereum today when it reaches the entry point around $2,886, with a target for growth to $2,922. At $2,922, I plan to exit the longs and sell immediately on the rebound. Before buying on a breakout, ensure the 50-day moving average is below the current price and the Awesome indicator is above zero.

Scenario #2: I can buy Ethereum from the lower boundary of $2,854 if there is no market reaction to its breakout in the opposite direction to levels $2,886 and $2,922.

Sell Scenario

Scenario #1: I will sell Ethereum today when it reaches the entry point around $2,854, with a target for a decline to $2,822. At the $2,822 level, I plan to exit the shorts and buy immediately on the rebound. Before selling on a breakout, ensure the 50-day moving average is above the current price and the Awesome indicator is below zero.

Scenario #2: I can sell Ethereum from the upper boundary of $2,886 if there is no market reaction to its breakout in the opposite direction to levels $2,854 and $2,822.

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