Bitcoin and Ethereum market analysis: A Risk-Defined Crypto trading strategy during market uncertainty (Principles for 2026)

Jan 6

7 min read

Bitcoin and Ethereum market analysis from Dad’s DeFi Space, with a practical Crypto trading strategy during market uncertainty built for beginners, intermediate traders, DeFi investors, and Zora creators—process-first, risk-defined, and subject to change.

Welcome to Dad’s DeFi Space

Welcome to Dad’s DeFi Space. I’m Kevin. I’m a dad, an investor, and a full-time DeFi learner.

And I’m grateful you’re here.

Markets are noisy. But I favor trading with clarity.

So this is me documenting what I’m seeing, how I’m thinking, and how I’m positioning—in real time, with all the pivots, stops, and “yeah… that didn’t work” moments included.

This is educational, not financial advice. Crypto is high risk. Manage your own risk.

Why I’m even talking about macro stuff in a crypto post

I know—people come for charts, entries, and coin talk. Not geopolitics.

But here’s the thing: macro pressure doesn’t ask for permission before it hits risk assets.

When you get geopolitical flash points, shaky real estate, and late-cycle business stress all showing up at once, it matters. Even if price looks “fine” today.

I know—people come for charts, entries, and coin talk. Not geopolitics.

But macro pressure doesn’t ask for permission before it hits risk assets.

When geopolitical flash points, fragile real estate, and late-cycle business stress begin stacking at the same time, it matters—even if price action looks “fine” today.

In early January 2026, markets were forced to digest sudden geopolitical shock risk following reports that Venezuelan president Nicolás Maduro had been seized by U.S. forces during a rapid military operation, triggering global debate, diplomatic fallout, and renewed uncertainty around regional stability and capital flows. This affects commodities like oil, which inherently affects the stocks and crypto markets to.

And that’s the strange part of these markets:

Sometimes risk is rising while charts are still pumping.

That disconnect is usually where traders get caught leaning the wrong way—because price hasn’t reacted yet, but pressure is already building underneath.

So I treat this current environment as a pressure point. Not because I’m trying to be dramatic—but because I’m trying to stay solvent.

Process intact. Nothing more, nothing less.

The big picture: late-cycle vibes and why I’m cautious

A lot of people want a clean answer:“Is the bull market back?”

I don’t know yet.

What I do know is we’re still dealing with what looks like the tail end of a larger cycle—commercial real estate stress, business cycle cracks, risk appetite that can flip quickly.

My working model is simple:

Crypto often reacts first
Then other risk assets follow
And during late-cycle windows, fakeouts are common

So even if Bitcoin looks strong today, alts can lag or get risk-off fast. Capital rotates defensively. Liquidity dries up. Volatility shows up when everyone feels safe again.

That’s why I’m cautious.

Not bearish forever. Just cautious right now.

Subject to change.

Market temperature check: sentiment is improving, but I’m not celebrating yet

Here’s what I pay attention to when I’m deciding whether I’m early, late, or just emotionally chasing:

Fear & Greed cooling off from deep fear into neutral
Bitcoin season creeping back in
Market cap expanding fast over a short window
ETF flows improving after heavy outflows

All of that can be constructive.

But it can also be a setup for the part where the market says:“Cool. Now let’s punish the late longs.”

So I keep my excitement on a leash.

Bitcoin: what I need to see before I call it “bull market back”

This is where I keep it boring on purpose.

For Bitcoin, I care about:

The 50-week moving average
The bull market support band
The overall structure on the weekly and monthly

My personal rule of thumb:

If Bitcoin is below those higher timeframe levels, I’m not interested in pounding the table on “bull market is back.”

Bitcoins bull market support band sits around 101-102K as of publication

Could we rally into those levels? Absolutely.

Could we get rejected and unwind the whole move? Also yes.

So I treat that region like a battle zone. Reactive. Not a victory lap.

The liquidation map mental model (beginner-friendly)

If you’re newer, here’s a clean way to think about liquidation heat maps:

They show where over-leveraged traders are likely to get forced out
Big liquidity pools become targets
Price tends to “visit” those zones more often than people expect

Right now, the way I’m thinking:

A lot of shorts already got cleared
There’s meaningful liquidity below current price
If we lose momentum, the market has a logical reason to dip and “grab” it

That doesn’t mean “crash incoming.”It means I’m planning for both directions and defining risk.

My positioning logic: why I can be short even when charts look bullish

This is the part that confuses people.

“How can you be short if things are pumping?”

Because I’m not trading narratives. I’m trading levels, liquidity, and risk.

Sometimes the best trade is a hedge, not a heroic prediction.

So I’ll short into zones where:

Momentum is maxed
Stochastic RSI is stretched
Price is hitting historical resistance
Liquidity magnets are below

And I’ll take profits at the levels I planned ahead of time.

If I’m wrong, I’m wrong—with a stop.That’s the whole point.

Invalidation > conviction.

Ethereum: why I’m bullish long-term and cautious short-term

Ethereum is the chain I still expect institutions to keep leaning into.

Not because it’s perfect—because it’s where a lot of the serious liquidity and development gravity sits.

So I’m structurally bullish on ETH over the long run.

But in the short term, I treat ETH like this:

If Bitcoin stalls or pulls back, ETH can get hit harder
ETH likes to move fast once it loses key ranges
The bull market support band area matters a lot

So if ETH taps into key resistance/support band zones and looks exhausted, I’m open to shorting it—risk-defined, optional, and quick to pivot.

I got stopped earlier on an ETH short in the livestream. It happens.

No ego. Process intact.

ETH/BTC and Bitcoin dominance: the “altcoin weather report”

If you’re a Altcoin trader, Meme Degen or Zora creator, this part matters.

When ETH/BTC is holding up and Bitcoin is consolidating, alts often get breathing room.

When ETH/BTC breaks down, it can get ugly for alts quickly—especially low-liquidity stuff.

So I watch:

Bitcoin dominance trend
ETH/BTC range + support band
Whether ETH is showing strength relative to Bitcoin, not just “up on the day”

This is less exciting than calling tops.

But it helps you avoid getting chopped up.

Solana and altcoins: price up, volume down is a yellow flag

A simple rule I try not to ignore:

If price is rising while volume is falling, the move can be fragile.

That doesn’t guarantee reversal. It’s just a signal to stop getting cute with leverage and position size.

With Solana specifically, the trade plan I shared was basically:

Identify the upper range
Short near resistance if the setup confirms
Take profits at defined levels
Keep stops above invalidation
Don’t marry the position

Catching falling knives isn’t for everyone. If you’re not used to trading, staying out is a valid strategy.

Optional.

Grid bots: why I like them (and what beginners should understand)

Grid bots aren’t magic.

I like them because they automate something most humans are bad at:

scaling in and out
staying consistent
not emotionally overtrading

But you still need the main ingredient:

a good range.

If your range is wrong, the bot just loses politely.

In the livestream, both bots were red because entries were a bit early. That’s part of the game. The point is that risk is defined, and I can adjust based on structure.

Systems > emotions.

Leverage safety: the fastest way to blow up is to ignore this

If you take nothing else from this, take this:

Don’t use cross margin if you don’t fully understand it
Isolated margin is safer for most people
Never size so big that a normal wick ruins your month
Stops aren’t optional if you’re trading leverage

I’ve liquidated accounts before. Being an idiot is expensive tuition.

So now I’m boring on purpose.

My simple framework for this week

Here’s my current checklist (subject to change):

If Bitcoin reclaims the higher timeframe levels cleanly, I’ll respect that
If it rejects and momentum rolls over, I’m watching liquidity below
ETH strength matters, but ETH can still get hit if BTC stalls
Alts can run—but I’m quick to derisk into pumps
I’m staying risk-defined, not headline-defined

That’s it.

No hype. No certainty. Just process.

What this means for Zora creators and DeFi investors

If you’re building on Base, experimenting with Zora, or trading creator coins:

I don’t think of creator coins as “guaranteed upside.”

I think of them as ecosystems.

Posts are like sub-assets inside the ecosystem
Liquidity and volume matter
Volume come from community growth
Alignment matters more than narratives
Rugs and failures happen—so size small and stay flexible
Creators must build community and bring more people onchain

If you’re creating, your edge isn’t predicting price.

Your edge is showing up consistently, learning in public, and treating everything as an experiment.

People > tokens.

Peace

Closing

If you made it this far, I appreciate you.

This is how I learn: I trade, I document, I get humbled, I adjust. And I share it so you can learn faster than I did.

If this resonates, links are below. Optional, but there if you want context.

Site: dadsdefispace.org

📺 YouTube: https://www.youtube.com/@DADSDefiSpace1013
🧵 X / Twitter: https://x.com/cryptozone1013
🧵 FARCASTERhttps://farcaster.xyz/dadsdefispace.base.eth
🧵BASE APP https://base.app/profile/dadsdefispace
I share trades and pivots in real time in the Telegram (free), and I also run a premium group for setups. No pressure—just an option.

Until next time. Get some rest tonight. Be ready to seize the day tomorrow.

FAQs

What is this “Bitcoin and Ethereum market analysis” actually trying to do?

It’s not trying to predict. It’s trying to keep you alive. I’m mapping key levels, liquidity zones, and risk conditions so you can make cleaner decisions.

What is a realistic Crypto trading strategy during market uncertainty for beginners?

Small size, fewer trades, defined invalidation, and no leverage unless you truly understand liquidation risk. Being bored is underrated.

Is the bull market back?

I don’t know yet. I need to see Bitcoin reclaim the 50-week and the bull market support band with strength. Until then, I treat pumps as reactive.

Why do you short when the market looks bullish?

Because sometimes shorts are hedges. Sometimes resistance is real. And I’d rather be risk-defined than “right” on Twitter.

How should DeFi investors think about altcoins right now?

Assume volatility. Expect rotations. Don’t confuse a pump with safety. Derisking into strength is a valid move.

How should Zora creators approach creator coins in this environment?

Treat it like an ecosystem experiment. Focus on alignment, consistency, and liquidity awareness. Size small. Stay flexible. No promises—just process.