The performance of key cryptocurrencies, Bitcoin and Ethereum, continues to fluctuate with Bitcoin (BTC) drifting under the $28,000 threshold and Ethereum grappling under the $1,700 mark. The impending Federal Open Market Committee (FOMC) minutes have heightened this uncertainty, warming traders for shifts based on the US economy's stance.
Bitcoin's performance continued to be subdued on Tuesday, with its trading margin remaining under $28,000 in expectation of the FOMC minutes from last month. Early in the day, BTC/USD nudged a high at $27,715.85, a rebound from a low of $27,302.56 from less than a day before.
From the overarching perspective, the bullish trend appears to hold, despite bearish actions aiming for the $27,000 short-term mark. The 14-day Relative Strength Index (RSI) continues on a descending curve—currently measured at 54.95— indicative of the attempts for price strength to stabilize, veering off a resistance level of 60.00.
At the moment, BTC trades at $27,518.86, where volatility is expected to intensify in the run-up to the upcoming economic release.
In addition, Ethereum (ETH) remained in the red, following a move by the Ethereum Foundation to trade 1,700 of its tokens. The week began with ETH/USD advancing to an impressive high of $1,596.97 before retreating to a low of $1,553.01 later that day.
This slump to a month-long low prompted bulls to pounce, taking the price to a current level of $1,580.44. A glance at the trend reveals that the recent descent has nudged the 10-day (red) moving average dangerously close to a downward cross with the 25-day (blue) counterpart.
If this downward crossing eventuates, Ethereum is likely to experience more sell-offs, with a high probability of falling below $1,500. As for whether a stronger 'red wave' is brewing for later in this week, we can only speculate.
Frequently Asked Questions
Should You Buy Gold?
In times past, gold was considered a safe haven for investors in times of economic trouble. Many people are now turning their backs on traditional investments like stocks and bonds, and instead look to precious metals like Gold.
While gold prices have been rising in recent years they are still low relative to other commodities, such as silver and oil.
This could be changing, according to some experts. They say that gold prices could rise dramatically with another global financial crisis.
They also pointed out that gold is gaining popularity due to its perceived value, and potential return.
If you are considering investing in gold, here are some things that you need to keep in mind.
- Consider first whether you will need the money to save for retirement. It's possible to save for retirement without putting your savings into gold. Gold does offer an extra layer of protection for those who reach retirement age.
- Second, ensure you fully understand the risks involved in buying gold. Each offer varying degrees of security and flexibility.
- Remember that gold is not as safe as a bank account. If you lose your gold coins, you may never recover them.
Do your research before you buy gold. If you already have gold, make sure you protect it.
What is a Precious Metal IRA (IRA)?
A precious metal IRA allows you to diversify your retirement savings into gold, silver, platinum, palladium, rhodium, iridium, osmium, and other rare metals. These are called “precious” metals because they're very hard to find and very valuable. These are excellent investments that will protect your wealth from inflation and economic instability.
Bullion can be bought via various channels, such as online retailers, large coin dealers and grocery stores.
With a precious metal IRA, you invest in bullion directly rather than purchasing shares of stock. This means you'll receive dividends every year.
Precious Metal IRAs don’t require paperwork nor have annual fees. Instead, your gains are subject to a small tax. Additionally, you have access to your funds at no cost whenever you need them.
How to Open a Precious Metal IRA?
First, you must decide if your Individual Retirement Account (IRA) is what you want. Open the account by filling out Form 8606. To determine which type of IRA you qualify for, you will need to fill out Form 5204. This form should be filled within 60 calendar days of opening the account. Once this is done, you can start investing. You can also choose to pay your salary directly by making a payroll deduction.
If you opt for a Roth IRA, you must complete Form 8903. Otherwise, the process will be identical to an ordinary IRA.
To qualify for a precious Metals IRA, there are specific requirements. You must be at least 18 years of age and have earned income to qualify for a precious metals IRA. You can't earn more than $110,000 per annum ($220,000 in married filing jointly) for any given tax year. And, you have to make contributions regularly. These rules apply regardless of whether you are contributing directly to your paychecks or through your employer.
You can use a precious-metals IRA to purchase gold, silver and palladium. But, you'll only be able to purchase physical bullion. You won't have the ability to trade stocks or bonds.
An IRA is a great way to invest in precious metals. However, there are two important drawbacks. First, they don't have the same liquidity as stocks or bonds. It is therefore harder to sell them when required. Second, they are not able to generate dividends as stocks and bonds. Therefore, you will lose money over time and not gain it.
Can I hold physical gold in my IRA?
Not only is gold paper currency, but it's also money. People have used gold as a currency for thousands of centuries to preserve their wealth and keep it safe from 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. Even though owning gold is not a guarantee of making money, there are many reasons why you might want to add gold to your retirement savings portfolio.
Gold has historically performed better during financial panics than other assets. The S&P 500 dropped 21 percent in the same time period, while gold prices rose by nearly 100 percent between August 2011-early 2013. Gold was one of the few assets that performed better than stocks during turbulent market conditions.
Another benefit to investing in gold? It has virtually zero counterparty exposure. Your stock portfolio can fall, but you will still own your shares. But if you own gold, its value will increase even if the company you invested in defaults on its debt.
Finally, gold provides liquidity. You can sell your gold at any time without worrying about finding a buyer, which is a major advantage over other investments. The liquidity of gold makes it a good investment. This allows you to profit from short-term fluctuations on the gold market.
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- 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)
- 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)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
3 Ways to Invest in Gold for Retirement
It's crucial to understand where gold fits in your retirement strategy. There are many ways to invest in gold if you have a 401k account at work. You might also consider investing in gold outside your workplace. A custodial account can be opened by a brokerage firm like Fidelity Investments if you already have an IRA. Or, if you don't already own any precious metals, you may want to consider buying them directly from a reputable dealer.
These are three easy rules to remember if you invest in gold.
- Buy Gold With Your Cash – Do not use credit cards to purchase gold. Instead, deposit cash into your accounts. This will help to keep your purchasing power high and protect you against inflation.
- Own Physical Gold Coins – You should buy physical gold coins rather than just owning a paper certificate. Physical gold coins are easier to sell than certificates. Also, there are no storage fees associated with physical gold coins.
- Diversify Your Portfolio. – Do not put all your eggs into one basket. This is how you spread your wealth. You can invest in different assets. This helps reduce risk and gives you more flexibility during market volatility.
By: Eliman Dambell
Title: Technical Analysis of Bitcoin and Ethereum: Uncertain Market Trends Amid Key US Economic Announcements
Sourced From: news.bitcoin.com/bitcoin-ethereum-technical-analysis-btc-consolidates-below-28000-ahead-of-key-us-economic-reports/
Published Date: Tue, 10 Oct 2023 12:52:23 +0000