When will it be safe to buy Ethereum?
Cryptocurrency prices have been all over the map as volatility is really rocking this group. First off, it was just Bitcoin (CCC: BTC-USD) showing signs of weakness. Then Ethereum (CCC: ETH-USD), Bitcoin Cash (CCC: BCH-USD) and others started to falter. It was actually quite interesting to watch this group. Source: Shutterstock InvestorPlace – Stock News, Stock Tips & Trading Tips In February, most high growth tech stocks peaked, causing a rapid and painful bear market in this group. Low-quality PSPCs with no income and other speculative bets have declined from 70% to 80%. High-quality, high-growth companies fell 40% more. It was a very big setback, but cryptocurrencies seemed to be working very well. Bitcoin peaked in April on the same day Coinbase (NASDAQ: COIN) debuted. This peak for Bitcoin was a red flag for cryptos. However, Bitcoin did not immediately switch. Instead, it retreated from its peak, then drifted somewhat aimlessly into May. At this point, Ethereum, Dogecoin (CCC: DOGE-USD), and others have gone up. Now the whole group is unstable. So what do the charts say about Ethereum? Trading Ethereum After Bottom Click to enlargeSource: Chart courtesy of TrendSpider In early April, Ethereum broke above its resistance, clearing $ 2,000 in the process. In a very bullish development, the earlier resistance of the cryptocurrency then became its support. This helped pave the way for its rise above $ 4000. However, these prices could not be sustained and Ethereum returned to earth. From its high to its recent low, it has fallen 60.5%. This decline only took a few days to materialize, highlighting how volatile this space can be, both on the way up and down. 7 Cheap Stocks With Dividends For Yields And Cash Flow Despite Ethereum’s recent heavy losses, there are a few silver liners for it. First, the area close to $ 2000 that the currency reached during its previous breakout served as support after the sharp pullback. Second, the 21 week moving average also served as support. Therefore, we have a few benchmarks to watch out for when the currency goes down. However, Ethereum also had its challenges. Its 50-day moving average continues to act as resistance, and one wonders if Ethereum can recover the $ 3,000 to $ 3,250 area without at least one more drop first. If the currency comes off $ 3,000, keep an eye out for $ 3,250 which is roughly the 21-day moving average. If Ethereum climbs above that point, the over $ 3,500 level will be in play. On the other hand, I wouldn’t hate re-testing the $ 2,000 area, which roughly matches the 21-week moving average. . If that point doesn’t hold, we could see a test of the 200-day moving average and retest of the earlier all-time high near $ 1,425. Such a drop would likely create a reasonably good buying opportunity for crypto investors. Is Ethereum Safe To Buy? Investors need to understand something when it comes to cryptocurrencies: this group is incredibly volatile! I’m not necessarily a die-hard bull when it comes to the band either. They have significant applications and a limited and controlled supply. Therefore, cryptocurrencies are somewhat attractive. With Ethereum in particular, the currency has attractive and useful qualities. This is one of the reasons why so many people think it is convenient to pay for things with this and why NFTs are always bought with it. That said, this band is so volatile that it’s hard to imagine it ever becoming widely used around the world. Not to mention the regulatory headaches that come with it or the fact that virtually every government in the world would oppose it. Simply put, I don’t think Bitcoin, Ethereum, or any other cryptocurrency will replace the US dollar. But that doesn’t mean we can’t make money with this band or that I think it’s going to go away. We have to keep in mind that Ethereum more than doubled, climbing 128.4%, in just 42 days. From the top, it only took 11 days for it to drop over 60%. This is not the kind of stability that a reserve currency needs. So is Ethereum safe to buy? I don’t think cryptocurrencies are going away, but intense volatility will prevent many investors from labeling Ethereum “safe.” There are a handful of cryptos that are likely to have a long lifespan. Bitcoin is the most obvious, but Ethereum should be fine as well. Accordingly, I agree to buy these names on weakness, using a portion of the investment portfolios devoted to speculative assets. I would love to have the opportunity to buy Ethereum between $ 1400 and $ 2000, although that opportunity may have passed. As of the publication date, Bret Kenwell does not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com. Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. No more InvestorPlace Stock Prodigy who found NIO at $ 2… Says Buy THIS Now It doesn’t matter if you have $ 500 in savings or $ 5 million. Do this now. Top Stock Picker Reveals Next Potential 500% Winner The Post When will it be safe to buy Ethereum? appeared first on InvestorPlace.