Introduction
Similarly to bitcoin's action, the second largest crypto asset by market cap, ethereum, has seen some market turmoil and a distinct downtrend. As of Jan. 22, 2024, ether has shown a notable decrease, registering a 3.3% drop in 24 hours and a 5.7% decline over the past week.
Ethereum's Market Capitalization and Volatility
Ethereum's (ETH) market capitalization stands at $287 billion, a reflection of its significant presence in the crypto market. However, its 24-hour trading range of $2,364 to $2,479 and a 24-hour trade volume of $9.84 billion indicate a period of heightened volatility and trader caution. This is underscored by the current price of $2,380 per ETH, which is down from recent highs, suggesting a bearish sentiment among traders.
Oscillators and Mixed Signals
The oscillators paint a picture of neutrality with a slight inclination towards bearishness. The relative strength index (RSI) at 48.8, Stochastic at 47.1, and the commodity channel index (CCI) at -10.3 all indicate a neutral stance. However, the momentum indicator at -127.9 signals bullish sentiment, whereas the moving average convergence/divergence (MACD) level at 46.8 suggests bearish action, highlighting the mixed signals in the current market.
Moving Averages and Potential Market Shift
Ethereum's moving averages (MAs) predominantly suggest a bearish outlook. The short-term exponential moving averages (EMAs) at 10 and 20 days, along with the simple moving averages (SMAs) at the same periods, show bearish sentiment. In contrast, longer-term MAs, particularly the EMAs and SMAs for 50, 100, and 200 days, indicate bullish opportunities. This divergence between short-term and long-term MAs could suggest a potential shift in market dynamics.
4-Hour Chart Analysis
The 4-hour chart analysis presents a marked downtrend, marked by successive declines, signaling robust bearish momentum. A slight uptick on Monday morning at 9 a.m. Eastern Time hints at a possible recovery, but the subdued trading volume implies a weak buying interest. For traders, considering entry points would depend on a clear trend shift, while opportunities for exiting or engaging in short-selling might emerge with the confirmation of a persistent downtrend.
Daily Chart Analysis
Parallel to the 4-hour chart, the daily chart underscores this downtrend through a sequence of unbroken drops. A significant sell-off, characterized by heavy volume, underscores the prevailing bearish mood. The subsequent price action indicates a state of market uncertainty. Savvy traders eyeing long positions should be vigilant for signs of bullish trend reversals, whereas those looking to exit or take short positions may find opportunities in the ongoing downtrend. Currently, the trend appears to be inclined towards a downward trajectory.
One-Hour Chart Analysis
On the one-hour chart, the detailed view corroborates the bearish trend observed in the longer-term analyses, as evidenced by a consistent pattern of declines forming lower lows. This morning's rise may suggest a temporary trend reversal; however, the modest volume accompanying this increase still warrants caution.
Bullish and Bearish Verdicts
Bull Verdict: The current ETH market, while showing signs of bearish trends in the short term, holds the potential for a bullish reversal. Key indicators such as the long-term moving averages and certain oscillator readings suggest underlying strength. This, coupled with the potential for market dynamics to shift rapidly in the ethereum trading arena, could pave the way for a bullish resurgence.
Bear Verdict: Ether's market analysis, predominantly driven by the current bearish sentiment visible in the short-term moving averages and oscillator readings, indicates a continuation of the downward trend. The consistent pattern of declining prices across various time frames, coupled with high volatility and cautious trader behavior, suggests a bear market scenario.
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Frequently Asked Questions
Can I hold physical gold in my IRA?
Gold is money, not just paper currency or coinage. People have been using gold for thousands of years to store their wealth and protect it from economic instability and inflation. Today, investors invest in gold as part a diversified portfolio. This is because gold tends do better in financial turmoil.
Today, many Americans invest in precious metals such as gold and silver rather than stocks and bonds. While owning gold doesn't guarantee you'll make money investing in gold, there are several reasons why it may make sense to consider adding gold to your retirement portfolio.
Another reason is the fact that gold historically has performed better than other assets in times of financial panic. The S&P 500 declined 21 percent during the same period. Gold prices increased nearly 100 per cent between August 2011 – early 2013. During these turbulent market times, gold was among few assets that outperformed the stocks.
Another benefit to investing in gold? It has virtually zero counterparty exposure. Your stock portfolio can fall, but you will still own your shares. You can still own your gold even if the company where you invested fails to pay its debt.
Finally, gold provides liquidity. This allows you to sell your gold whenever you want, unlike many other investments. Because gold is so liquid compared to other investments, buying it in small amounts makes sense. This allows you take advantage of the short-term fluctuations that occur in the gold markets.
Is gold a good IRA investment?
For anyone who wants to save some money, gold can be a good investment. It can be used to diversify your portfolio. But there is more to gold than meets the eye.
It's been used as a form of payment throughout history. It's sometimes called “the world's oldest money”.
Gold is not created by governments, but it is extracted from the earth. This makes it highly valuable as it is hard and rare to produce.
The supply-demand relationship determines the gold price. The economy that is strong tends to be more affluent, which means there are less gold miners. This results in gold prices rising.
The flip side is that people tend to save money when the economy slows. This results in more gold being produced, which drives down its value.
This is why investing in gold makes sense for individuals and businesses. You will benefit from economic growth if you invest in gold.
Also, your investments will earn you interest which can help increase your wealth. If gold's value falls, you don't have to lose any of your investments.
What are the fees for an IRA that holds gold?
$6 per month is the Individual Retirement Account Fee (IRA). This includes account maintenance fees and investment costs for your chosen investments.
You may have to pay additional fees if you want to diversify your portfolio. The fees you pay will vary depending on the type of IRA that you choose. For example, some companies offer free checking accounts but charge monthly fees for IRA accounts.
Most providers also charge annual management costs. These fees are usually between 0% and 1%. The average rate per year is.25%. These rates can often be waived if a broker, such as TD Ameritrade, is involved.
Are You Ready to Invest in Gold?
The answer depends on how much money you have saved and whether gold was an investment option available when you started saving. If you're unsure about which option to choose then consider investing in both.
Not only is it a safe investment but gold can also provide potential returns. Retirees will find it an attractive investment.
While many investments promise fixed returns, gold is subject to fluctuations. Therefore, its value is subject to change over time.
This doesn't mean that you should not invest in gold. It is important to consider the fluctuations when planning your portfolio.
Another benefit to gold? It's a tangible asset. Gold is much easier to store than bonds and stocks. It can also be carried.
You can always access your gold as long as it is kept safe. Additionally, physical gold does not require storage fees.
Investing in gold can help protect against inflation. Gold prices are likely to rise with other commodities so it is a good way of protecting against rising costs.
Additionally, it will be a benefit to have some of your savings invested into something that won't lose value. Gold tends to rise when the stock markets fall.
You can also sell gold anytime you like by investing in it. You can easily liquidate your investment, just as with stocks. You don’t even need to wait until retirement to liquidate your position.
If you do decide to invest in gold, make sure to diversify your holdings. Don't place all your eggs in the same basket.
Do not buy too much at one time. Start by purchasing a few ounces. Add more as you're able.
Keep in mind that the goal is not to quickly become wealthy. It is to create enough wealth that you no longer have to depend on Social Security.
Even though gold is not the best investment, it could be an excellent addition to any retirement plan.
Can the government steal your gold?
You own your gold and therefore the government cannot seize it. It's yours, and you earned it by working hard. It belongs to you. There may be exceptions to this rule. You could lose your gold if convicted of fraud against a federal government agency. If you owe taxes, your precious metals could be taken away. However, if you do not pay your taxes, you can still keep your gold even though it is considered property of the United States Government.
What are the pros & con's of a golden IRA?
An Individual Retirement account (IRA) is a better option than regular savings accounts in that interest earned is exempted from tax. This makes an IRA great for people who want to save money but don't want to pay tax on the interest they earn. However, there are disadvantages to this type investment.
If you withdraw too many funds from your IRA at once, you may lose all your accumulated assets. You may also be prohibited by the IRS from making withdrawals from an IRA after you turn 59 1/2. If you do withdraw funds from your IRA you will most likely be required to pay a penalty.
A disadvantage to managing your IRA is the fact that fees must be paid. Many banks charge between 0.5% and 2.0% per year. Others charge management fees that range from $10 to $50 per month.
If you prefer to keep your money outside a bank, you'll need to purchase insurance. Many insurers require that you own at least one ounce of gold before you can make a claim. You may be required by some insurers to purchase insurance that covers losses as high as $500,000.
If you decide to open a gold IRA, it is important to know how much you can use. You may be limited in the amount of gold you can have by some providers. Others allow you the freedom to choose your own weight.
It's also important to decide whether or not to buy gold futures contracts. The price of physical gold is higher than that of gold futures. Futures contracts allow you to buy gold with more flexibility. You can set up futures contracts with a fixed expiration date.
You will also have to decide which type of insurance coverage is best for you. The standard policy does NOT include theft protection and loss due to fire or flood. It does offer coverage for natural disasters. You might consider purchasing additional coverage if your area is at high risk.
Apart from insurance, you should consider the costs of storing your precious metals. Storage costs are not covered by insurance. Banks charge between $25 and $40 per month for safekeeping.
Before you can open a gold IRA you need to contact a qualified Custodian. Custodians keep track of your investments and ensure compliance with federal regulations. Custodians are not allowed to sell your assets. Instead, they must maintain them for as long a time as you request.
After you have decided on the type of IRA that best suits you, you will need to complete paperwork detailing your goals. The plan should contain information about the types of investments you wish to make such as stocks, bonds or mutual funds. Also, you should specify how much each month you plan to invest.
After filling in the forms, please send them to the provider. Once the company has received your application, they will review it and send you a confirmation email.
A financial planner is a good idea when opening a gold IRA. Financial planners have extensive knowledge in investing and can help determine the best type of IRA to suit your needs. They can also help reduce your costs by suggesting cheaper options for purchasing insurance.
Statistics
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
External Links
finance.yahoo.com
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear in 1990 – WSJ
- How do you keep your IRA Gold at Home? It's Not Exactly Legal – WSJ
bbb.org
law.cornell.edu
- 7 U.S. Code SS7 – Designation board of trade as contract marketplaces
- 26 U.S. Code SS 408 – Individual retirement accounts
How To
Tips to Invest in Gold
Investing in Gold remains one of the most preferred investment strategies. Because investing in gold has many benefits. There are several options to invest in the gold. Some people buy physical gold coins, while others prefer investing in gold ETFs (Exchange Traded Funds).
Before you purchase any type or gold, here are some things to think about.
- First, verify that your country permits gold ownership. If it is, you can move on. You can also look at buying gold abroad.
- The second is to decide which kind of gold coin it is you want. You have options: you can choose from yellow gold, white or rose gold.
- Thirdly, you should take into consideration the price of gold. Start small and build up. One thing that you should never forget when purchasing gold is to diversify your portfolio. Diversifying assets should include stocks, bonds real estate mutual funds and commodities.
- Don't forget to keep in mind that gold prices often change. You need to keep up with current trends.
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By: Jamie Redman
Title: The Market Analysis of Ethereum: Bearish Trend Continues
Sourced From: news.bitcoin.com/ethereum-technical-analysis-bearish-trends-dominate-across-multiple-timeframes/
Published Date: Mon, 22 Jan 2024 14:32:12 +0000
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