When is it Safe to Buy Ethereum?
Cryptocurrency prices have been all over the map as volatility is really rocking this group. Initially, only Bitcoin (CCC: BTC-USD) showed signs of weakness. Then Ethereum (CCC: ETH-USD), Bitcoin Cash (CCC: BCH-USD) and others began to fluctuate. It was actually quite interesting to watch this group. Source: Shutterstock InvestorPlace – Stock News, Stock Advice, and Trading Tips February saw most high-growth tech stocks peak, causing a quick, painful bear market for this group. Low quality SPACs with no revenue and other speculative bets fell 70% to 80%. High-quality, high-growth companies plummeted 40%. It was a really big withdrawal, but cryptocurrencies seemed to be working fine. Bitcoin peaked in April on the same day as Coinbase (NASDAQ: COIN) debut. That tip for bitcoin was a red flag for cryptos. Bitcoin didn’t roll right away, however. Instead, it pulled back from its high and then drifted off aimlessly until May. At this point, Ethereum, Dogecoin (CCC: DOGE-USD) and others were rising higher. Now the whole group is volatile. What do the charts say about Ethereum? Ethereum trading after the slump Click to enlargeSource: Chart courtesy of TrendSpider In early April, Ethereum broke out of its resistance, clearing $ 2,000 in the process. In a very bullish development, the cryptocurrency’s previous resistance then became its support. That helped pave the way for its surge above $ 4,000. However, these prices could not be held and Ethereum plunged back to earth. From its high to its most recent low, it fell 60.5%. This decline lasted only a few days and showed how volatile this space can be, both on its way up and down. 7 Cheap Dividend Stocks For Yield and Cash Flow Despite Ethereum’s heavy recent losses, there are some silver linings for that. First, the area near the $ 2,000 mark the currency hit during its previous breakout was held as support after the sharp retreat. Second, the 21-week moving average also served as a support. As a result, we have some benchmarks to keep in mind when the currency falls. However, Ethereum also had its challenges. Its 50-day moving average continues to act as resistance, and the question is whether Ethereum can recapture the $ 3,000-3,250 area without at least one further drop. When the currency hits $ 3,000, keep an eye on $ 3,250, which is roughly the 21-day moving average. If Ethereum climbs above this point, the over $ 3,500 level will be in play. On the flip side, I wouldn’t hate retesting the $ 2,000 range, which is roughly the 21-week moving average. If this point is not held, we could see a test of the 200 day moving average and a retest of the previous all-time high at $ 1,425. Such a decline would likely create a reasonably good buying opportunity for crypto investors. Is Ethereum Safe To Buy? There is one thing that investors need to understand when it comes to cryptocurrencies: this group is incredibly volatile! I’m not exactly a die-hard cop when it comes to the group either. They have meaningful uses and a limited, controlled supply. As a result, cryptocurrencies are somewhat attractive. Especially with Ethereum, the currency has attractive and useful properties. This is one reason why so many people believe it is convenient to pay with, and why it is always used to buy NFTs. However, this group is so volatile that it is hard to imagine that it will ever spread around the world. Not to mention the regulatory headache that comes with it, or the fact that virtually every government in the world is fighting it. Put simply, 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 group or that I think it will go away. We have to keep in mind that in just 42 days, Ethereum more than doubled, up 128.4%. It only took 11 days from the high to fall more than 60%. That’s not the kind of stability a reserve currency needs. So is Ethereum safe to buy? I don’t think cryptocurrencies are disappearing, but the high volatility will keep many investors from calling Ethereum “safe”. There are a handful of cryptos out there that are likely to last. Bitcoin is the obvious, but Ethereum should be fine too. So I agree to buy these names when weak and use part of the investment portfolios dedicated to speculative assets. I would appreciate an opportunity to buy Ethereum between $ 1,400 and $ 2,000, although that opportunity may already be over. At the time of this writing, Bret Kenwell held (neither directly nor indirectly) positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s posting guidelines. Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. More from InvestorPlace Stock Prodigy who found NIO for $ 2 … Says, Buy THAT Now It doesn’t matter if you have $ 500 in savings or $ 5 million. Do this now. Top Stock Picker Reveals Its Next Potential 500% Winner When Will It Be Safe To Buy Ethereum? first appeared on InvestorPlace.