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 Market Capitalization and Trading Range
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 Market 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 Market Dynamics
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.
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
How much of your portfolio should you hold in precious metals
First, let's define precious metals to answer the question. Precious metals refer to elements with a very high value relative other commodities. This makes them extremely valuable for trading and investing. Gold is by far the most common precious metal traded today.
There are also many other precious metals such as platinum and silver. The price of gold tends to fluctuate but generally stays at a reasonably stable level during periods of economic turmoil. It also remains relatively unaffected by inflation and deflation.
As a general rule, the prices for all precious metals tend to increase with the overall market. They do not always move in the same direction. If the economy is struggling, the gold price tends to rise, while the prices for other precious metals tends to fall. Investors expect lower interest rate, making bonds less appealing investments.
However, when an economy is strong, the reverse effect occurs. Investors are more inclined to invest in safe assets, such as Treasury Bonds, and they will not demand precious metals. Since these are scarce, they become more expensive and decrease in value.
To maximize your profits when investing in precious metals, diversify across different precious metals. It is also a good idea to diversify your investments in precious metals, as prices tend to fluctuate.
Which precious metals are best to invest in retirement?
These precious metals are among the most attractive investments. They're both easy to buy and sell and have been around forever. These are great options to diversify your portfolio.
Gold: Gold is one of man's oldest forms of currency. It is also extremely safe and stable. It's a great way to protect wealth in times of uncertainty.
Silver: Silver has been a favorite among investors for years. It's a good choice for those who want to avoid volatility. Silver is more volatile than gold. It tends to rise rather than fall.
Platinum: This precious metal is also becoming more popular. It's durable and resists corrosion, just like gold and silver. However, it's much more expensive than either of its counterparts.
Rhodium: Rhodium is used in catalytic converters. It is also used as a jewelry material. It is also very affordable in comparison to other types.
Palladium: Palladium has a similarity to platinum but is more rare. It is also cheaper. This is why it has become a favourite among investors looking for precious metals.
Can I buy Gold with my Self-Directed IRA?
While you can purchase gold from your self-directed IRA (or any other brokerage firm), you must first open a brokerage account such as TD Ameritrade. You can also transfer funds from another retirement account if you already have one.
Individuals can contribute as much as $5,500 per year ($6,500 if married filing jointly) to a traditional IRA. Individuals can contribute up to $1,000 annually ($2,000 if married and filing jointly) directly to a Roth IRA.
If you do decide to invest in gold, you'll want to consider purchasing physical bullion rather than investing in futures contracts. Futures contracts can be described as financial instruments that are determined by the gold price. They let you speculate on future price without having to own the metal. But physical bullion refers to real gold and silver bars you can carry in your hand.
Should You Invest Gold in Retirement?
It depends on how much you have saved and if gold was available at the time you started saving. If you are unsure of which option to invest in, consider both.
You can earn potential returns on your investment of gold. It's a great investment for retirees.
Gold is more volatile than most other investments. Because of this, gold's value can fluctuate over time.
This does not mean you shouldn’t invest in gold. You should just factor the fluctuations into any overall portfolio.
Another benefit to gold? It's a tangible asset. Gold is more convenient than bonds or stocks because it can be stored easily. It's also portable.
You can always access gold as long your place it safe. Additionally, physical gold does not require storage fees.
Investing in gold can help protect against inflation. As gold prices rise in tandem with other commodities it can be a good hedge against rising cost.
You'll also benefit from having a portion of your savings invested in something that isn't going down in value. Gold rises in the face of a falling stock market.
You can also sell gold anytime you like by investing in it. You can easily liquidate your investment, just as with stocks. It doesn't matter if you are retiring.
If you do decide to invest in gold, make sure to diversify your holdings. You shouldn't try to put all of your eggs into one basket.
Don't purchase too much at once. Start by purchasing a few ounces. Then add more as needed.
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.
While gold may not be the best investment, it can be a great addition to any retirement plan.
What is a gold IRA account?
Individuals who want to invest with precious metals may use the Gold Ira accounts, which are tax-free.
You can buy physical gold bullion coins at any time. To invest in gold, you don't need to wait for retirement.
You can keep gold in an IRA forever. You won't have to pay taxes on your gold investments when you die.
Your heirs will inherit your gold, and not pay capital gains taxes. It is not required that you include your gold in the final estate report because it remains outside your estate.
To open a IRA for gold, you must first create an individual retirement plan (IRA). Once you've done so, you'll be given an IRA custodian. This company acts like a middleman between the IRS and you.
Your gold IRA Custodian will manage the paperwork and submit all necessary forms to IRS. This includes filing annual reporting.
Once your gold IRA is established, you can purchase gold bullion coins. Minimum deposit required is $1,000 However, you'll receive a higher interest rate if you put in more.
You will pay taxes when you withdraw your gold from your IRA. If you take out the whole amount, you'll be subject to income taxes as well as a 10 percent penalty.
You may not be required to pay taxes if you take out only a small amount. There are exceptions. You'll owe federal income tax and a 20% penalty if you take out more than 30% of your total IRA assets.
It is best to not take out more than 50% annually of your total IRA assets. Otherwise, you'll face steep financial consequences.
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)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
External Links
investopedia.com
- Do You Need a Gold IRA to Get Retirement?
- What are the Options Types, Spreads. Example. And Risk Metrics
irs.gov
finance.yahoo.com
forbes.com
- Gold IRA – Add Sparkle to Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How To
Tips for Investing in Gold
Investing in Gold has become a very popular investment strategy. This is because there are many benefits if you choose to invest in gold. There are several ways to invest in gold. Some people buy physical gold coins, while others prefer investing in gold ETFs (Exchange Traded Funds).
Before you buy any type of gold, there are some things that you should think about.
- First, find out if your country allows gold ownership. If you have permission to possess gold in your country, you can then proceed. Or, you might consider buying gold overseas.
- Secondly, you should know what kind of gold coin you want. You have the option of choosing yellow, white, or rose gold.
- Thirdly, you should take into consideration the price of gold. It is best to begin small and work your ways 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. Therefore, you have to be aware of current trends.
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By: Jamie Redman
Title: Ethereum Market Analysis: Bearish Trend Continues with Potential for a Bullish Reversal
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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