The digital currency market is a volatile one, prone to significant fluctuations due to various factors. Two such prominent cryptocurrencies, Bitcoin and Ethereum, experienced a downward trend recently. The drop occurred just before the release of the US inflation report, adding a layer of complexity to the situation. In this article, we take a detailed look at the movements of these two cryptocurrencies and explore the potential reasons behind their recent trends.
Bitcoin's Downward Journey
Bitcoin (BTC), the leading cryptocurrency, has been on a declining pathway for five successive days. This descent comes as the financial market anticipates the unveiling of the recent US consumer price index (CPI). The BTC/USD value dipped to a low of $26,561.10, which occurred less than a day after being traded at a high of $27,258.45.
Thursday's decline resulted in the cryptocurrency hovering close to its lowest point since the conclusion of September. An analysis of the chart reveals that this drop pushed the relative strength index (RSI) to a support point at the 44.00 level. However, the price strength has since seen a slight rebound, registering at 45.28 at the time of writing.
This base might act as a shield before the release of the inflation report, which could potentially trigger an increase in volatility.
Ethereum's Price Dip
Similar to Bitcoin, Ethereum (ETH) also witnessed a drop in price, with the cryptocurrency reaching a multi-week low. The ETH/USD value fell to its lowest at $1,538.26, following a high of $1,576.40 the previous day.
This decline means that Ethereum has now dropped to its most fragile point since September 11, when the price traded below its $1,540 support point. This downward trend follows a recent intersection of the 10-day (red) moving average and its 25-day (blue) counterpart. As a result of this bearish momentum, the RSI has fallen to a current reading of 36.88, indicating that volumes are slightly oversold.
This situation could potentially encourage cryptocurrency enthusiasts to contemplate buying the dip, depending on the outcome of today’s inflation report.
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What are your thoughts on the US inflation falling below 3.6%? Share your views in the comments below.
Frequently Asked Questions
What are the advantages of a gold IRA
The best way to invest money for retirement is by putting it into an Individual Retirement Account (IRA). It is tax-deferred until it's withdrawn. You have total control over how much each year you take out. And there are many different types of IRAs. Some are more suitable for students who wish to save money for college. Others are made for investors seeking higher returns. Roth IRAs are a way for individuals to make contributions after the age of 59 1/2, and then pay taxes on any earnings upon retirement. Once they start withdrawing money, however, the earnings aren’t subject to tax again. This account may be worth considering if you are looking to retire earlier.
The gold IRA allows you to invest in different asset classes, which is similar to other IRAs. Unlike a regular IRA where you pay taxes on gains, a gold IRA doesn't require you to worry about taxation while you wait to get them. People who want to invest their money rather than spend it make gold IRA accounts a great option.
You can also enjoy automatic withdrawals, which is another benefit of owning your gold through an IRA. That means you won't have to think about making deposits every month. Direct debits could be set up to ensure you don't miss a single payment.
Finally, gold is one of the safest investment choices available today. Because it isn’t tied to any specific country, gold’s value tends to stay stable. Even in times of economic turmoil gold prices tend to remain stable. It is therefore a great choice for protecting your savings against inflation.
What are the pros and cons of a gold IRA?
An Individual Retirement Account is a more beneficial option than regular savings accounts. You don't pay taxes on any interest earned. This makes an IRA great for people who want to save money but don't want to pay tax on the interest they earn. This type of investment has its downsides.
To give an example, if your IRA is withdrawn too often, you can lose all your accumulated funds. 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%-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. Insurance companies will usually require that you have at least $500,000. You may be required by some insurers to purchase insurance that covers losses as high as $500,000.
You will need to decide how much gold you wish to use if you opt for a gold IRA. Some providers limit how many ounces you can keep. Some providers allow you to choose your weight.
It is also up to you to decide whether you want to purchase physical gold or futures. Physical gold is more costly than gold futures. Futures contracts provide flexibility for purchasing gold. They allow you to set up a contract with a specific expiration date.
You'll also need to decide what kind of insurance coverage you want. The standard policy doesn't include theft protection or loss due to fire, flood, or earthquake. It does offer coverage for natural disasters. If you live in a high-risk area, you may want to add additional coverage.
Insurance is not enough. You also need to think about the cost of gold storage. Storage costs are not covered by insurance. Safekeeping costs can be as high as $25-40 per month at most banks.
To open a IRA in gold, you will need to first speak with a qualified custodian. A custodian helps you keep track of your investments, and ensures compliance with federal regulations. Custodians aren't allowed to sell your assets. Instead, they must keep your assets for as long you request.
Once you have chosen the right type of IRA to suit your needs, it is time to fill out paperwork defining 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.
Once you have completed the forms, you will need to mail them to your provider with a check and a small deposit. Once the company has received your application, they will review it and send you a confirmation email.
When opening a gold IRA, you should consider using a financial planner. A financial planner is an expert in investing and can help you choose the right type of IRA for you. They can help you find cheaper insurance options to lower your costs.
What are the fees associated with an IRA for gold?
A monthly fee of $6 for an Individual Retirement Account is charged. This includes account maintenance and any investment costs.
You may have to pay additional fees if you want to diversify your portfolio. The type of IRA you choose will determine the fees. Some companies offer checking accounts for free, while others charge monthly fees for IRA account.
Most providers also charge an annual management fee. These fees are usually between 0% and 1%. The average rate per year is.25%. These rates are often waived if a broker like TD Ameritrade is used.
How much tax is gold subject to in an IRA
The tax on the sale of gold is based on its fair market value when sold. When you purchase gold, you don't have to pay any taxes. It is not considered income. If you decide to make a sale of it, you'll be entitled to a taxable loss if the value goes up.
You can use gold as collateral to secure loans. When you borrow against your assets, lenders try to find the highest return possible. In the case of gold, this usually means selling it. However, there is no guarantee that the lender would do this. They might keep it. They might decide to sell it. Either way, you lose potential profit.
If you plan on using your gold as collateral, then you shouldn't lend against it. It is better to leave it alone.
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- 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)
- 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)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- 7 U.S. Code SS7 – Designation board of trade as contract marketplaces
- 26 U.S. Code SS 408 – Individual retirement accounts
Investing in gold or stocks
Investing in gold as an investment vehicle might seem like a very risky proposition these days. The reason behind this is that many people believe that gold is no longer profitable to invest in. This belief arises because most people believe that the global economy is driving down gold prices. They think that they would lose money if they invested in gold. There are many benefits to investing in gold. We'll be looking at some of these benefits below.
Gold is one of the oldest forms of currency known to man. It has been used for thousands of years. It was used all around the world as a reserve of value. It's still used by countries like South Africa as a method of payment.
It is important to determine the price per Gram that you will pay for gold when making a decision about whether or not to invest. You must determine how much gold bullion you can afford per gram before you consider buying it. If you don't know your current market rate, you could always contact a local jeweler and ask them what they think the price is.
It is important to remember that even though gold prices have dropped in recent times, the cost of making gold has risen. So while the price of gold has declined, production costs haven't changed.
When deciding whether to buy gold, another thing to consider is how much gold you intend on buying. If you intend to only purchase enough gold to cover your wedding rings it may be a smart decision to not buy any gold. This is not a wise decision if you're looking to invest in long-term assets. Selling your gold at a higher value than what you bought can help you make money.
We hope you have gained a better understanding about gold as an investment tool. Before making any investment decisions, we strongly advise that you thoroughly research all options. Only then can you make informed decisions.
By: Eliman Dambell
Title: The Impacts of US Inflation Reports on Bitcoin and Ethereum
Sourced From: news.bitcoin.com/bitcoin-ethereum-technical-analysis-btc-under-27000-eth-hits-1-month-low-ahead-of-us-inflation-report/
Published Date: Thu, 12 Oct 2023 12:22:32 +0000
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