Investing.com’s stocks of the week
- Crypto tracking weaker U.S. stock futures
- TACO risk present given Trump’s tariff timeline
- Preference to take signals from price action over narrative
Summary
Crypto has started the week under pressure, but the technical picture on both Bitcoin and Ethereum still allows for moves in either direction. BTC/USD trades between $92,000 and $94,000 with $90,000 looming as the pivotal zone beneath. ETH/USD continues to attract buyers under $3,200, although a break of $3,180 would shift momentum. With mixed signals and headline volatility, traders should let price action lead the way.
Crypto Slips, TACO Risk Limits Follow Through
Souring risk appetite following Donald Trump’s threat to slap new tariffs on eight European nations unless Greenland is sold to the United States has seen crypto markets start the week on the back foot, with BTC/USD and ETH/USD sliding in early trade, mirroring U.S. stock futures.
However, the timing of Trump’s announcement has the hallmarks of prior TACO episodes, arriving at the start of a long weekend in the United States, providing ample time for him to strike a deal before U.S. markets open on Tuesday, averting the prospect of fresh levies and the risk of retaliatory measures from February 1. With the World Economic Forum in Davos kicking off, prior form suggests a deal could be struck on the sidelines of the event, providing fuel for a potential relief rally in riskier assets hit by the initial announcement.
Despite the risk-off tone, given mixed messages from the oscillators and risk we may see another Trump backflip, traders should keep an open mind when it comes to directional bias, putting more emphasis on price action when assessing setups.
BTC/USD Slide Accelerates
Source: TradingView
Having broken $94,000 on Friday, BTC/USD has extended its slide in Asian trade, testing minor support at $92,000 before bouncing. Initially, unless you are scalping, they are the two levels for traders to watch.
Given the direction of travel, a break and hold of $92,000 would open the door for a retest of $90,000, a level the price has traded through consistently since mid-December with only one move sustained. With the 50DMA located nearby, this zone looks key when it comes to directional risks, especially if we see a close beneath $90,000. If that were to take place, $89,000 repelled multiple bullish probes in December, with bids lurking beneath $87,000 and $85,280 over the same period, ensuring they should be on the radar should the bearish move extend.
If the price continues to hold above $92,000, it would allow for bullish setups to be considered, although it would be preferred to see a retest and bounce before setting longs given the environment. Longs could be set above $92,000 with a stop below, targeting $94,000 initially and, beyond that, the 2026 YTD high at $98,000.
ETH/USD Attracts Bids at Familiar Level
Source: TradingView
ETH/USD initially skidded to as low as $3,180 before bouncing, attracting buying support beneath $3,200. While the pair often trades through this level, sustained moves have been far fewer in number since late October, meaning this zone should be in focus if we see another retracement towards it.
If there were to be another retest and bounce from beneath $3,200, longs could be set with a tight stop beneath $3,180 for protection, targeting $3,400 which has capped gains in recent months. Above that, the intersection of $3,500 and the 200DMA looms as a tougher test for bulls in this environment.
Should the price break and hold beneath $3,180, it would open the door for short setups to be considered, allowing for a stop to be placed above $3,200 targeting the 50DMA or $3,075 initially. Beyond that, a break beneath the latter would increase the risk of a retest of support beneath $2,900 and $2,800 given it would break the uptrend dating back to the lows set in November.