Ethereum Market Analysis: Potential for Bullish Reversal

Introduction

Similar to bitcoin, ethereum (ETH), the second-largest cryptocurrency by market cap, has experienced market turmoil and a clear downtrend. As of January 22, 2024, ether has shown a significant decrease, with a 3.3% drop in the past 24 hours and a 5.7% decline over the past week.

Ethereum Market Capitalization and Volatility

Ethereum's market capitalization currently stands at $287 billion, reflecting its significant presence in the crypto market. However, the 24-hour trading range of $2,364 to $2,479 and a trade volume of $9.84 billion indicate heightened volatility and caution among traders. The current price of $2,380 per ETH, down from recent highs, suggests a bearish sentiment.

Oscillators and Mixed Signals

The oscillators present a picture of neutrality with a slight inclination towards bearishness. The relative strength index (RSI) at 48.8, stochastic at 47.1, and commodity channel index (CCI) at -10.3 all indicate a neutral stance. However, the momentum indicator at -127.9 signals bullish sentiment, while the moving average convergence/divergence (MACD) level at 46.8 suggests bearish action, highlighting mixed signals in the current market.

Moving Averages and Market Dynamics

Ethereum's moving averages 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 reveals a marked downtrend with successive declines, indicating robust bearish momentum. A slight uptick on Monday morning suggests a possible recovery, but the subdued trading volume implies weak buying interest. Traders should consider entry points based on a clear trend shift, while opportunities for exiting or short-selling may emerge with confirmation of a persistent downtrend.

Daily Chart Analysis

The daily chart confirms the 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 market uncertainty. Traders eyeing long positions should remain vigilant for signs of bullish trend reversals, while 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

The detailed view on the one-hour chart supports the bearish trend observed in longer-term analyses, with consistent declines forming lower lows. The morning rise may suggest a temporary trend reversal, but the modest volume accompanying this increase still warrants caution.

Bull Verdict

Despite the short-term bearish trends, the current ETH market holds the potential for a bullish reversal. Key indicators, such as long-term moving averages and certain oscillator readings, suggest underlying strength. Additionally, the ethereum trading arena is known for its rapid market dynamic shifts, which could pave the way for a bullish resurgence.

Bear Verdict

The market analysis of ether, driven by the current bearish sentiment visible in 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.

What are your thoughts on ether's market action on Monday morning? Share your opinions in the comments section below.

Frequently Asked Questions

What is the best way to make money with a gold IRA?

The answer is yes, but not as much as you think. It all depends upon how much risk you are willing and able to take. If you can afford to invest $10,000 every year for 20-years, you could possibly have $1,000,000 by retirement age. If you try to put all your eggs into one basket, you will lose everything.

Diversifying your investments is important. Inflation can make gold perform well. You want to invest in an asset class that rises along with inflation. Stocks excel at this because they rise with increased profits. This is also true of bonds. They pay interest each year. They're great for economic growth.

But what happens if inflation is not present? In deflationary periods stocks and bonds both fall in value. Investors should avoid investing all of their savings into one investment like a stock mutual funds or bond.

Instead, they should diversify their investments by investing in different types of funds. They could invest in stocks or bonds. They could also invest in cash or bonds.

So they can see both sides of each coin. They can see both the inflation and the deflation sides of the coin. They will still experience a return with time.

Are precious metals allowed in an IRA?

The answer to this question depends on whether the IRA owner wants to diversify his holdings into gold and silver or keep them for safekeeping.

If he does want to diversify, then there are two options available to him. He could either purchase physical bars or silver from a seller, or return these items to the dealer at end of the year. Let's say he doesn’t want to sell back his precious metal investment. In this case, he should hold onto the investments as they are perfect for storing inside an IRA account.

What precious metals will be allowed in an IRA account?

The most common precious metal used for IRA accounts is gold. As investments, you can also buy bars and bullion coins made of gold.

Precious metals are considered safe investments because they don't lose value over time. They are also a great way of diversifying your investment portfolio.

Precious metals include silver, platinum, and palladium. These three metals are similar in their properties. Each has its own purpose.

Platinum is used to make jewelry, for example. For the creation of catalysts, palladium can be used. It is used for producing coins.

You should consider the amount you will spend on your gold before you decide which precious metal. You may be better buying gold that is less expensive per ounce.

You should also think about whether you want to keep your investment private. If you have the desire to keep your investment private, palladium might be the best choice.

Palladium can be more valuable than gold. But it's also less common. So you'll likely have to pay more for it.

The storage fees of gold and silver are also important factors to consider when making a decision between them. Gold is measured by weight. For larger quantities of gold, you will be charged a higher storage fee.

Silver can be stored by volume. You'll be charged less for smaller amounts.

If you decide to store your precious metals in an IRA, follow all IRS rules regarding gold and silver. You must keep track of all transactions and report them to the IRS.

How Do You Make a Withdrawal from a Precious Metal IRA?

If you have a precious IRA company such Goldco International Inc. account, you may be tempted to withdraw your funds. You can sell your metals at a higher price if they are still in the account than if you left them there.

This article will help you understand how to withdraw funds from an IRA that holds precious metals.

First, you need to find out if the provider of your precious metal IRA allows withdrawals. Some companies will allow withdrawals, while others won't.

Second, consider whether your sale of metals can allow you to take advantage tax-deferred profits. This benefit is provided by almost all IRA providers. Some providers do not offer this benefit.

Third, verify with your precious Metal IRA provider if you are charged any fees for taking these steps. It is possible that the withdrawal will be more expensive.

Fourth, you should keep track of precious metal IRA investments for at minimum three years after they are sold. This means that you must wait until January 1st of each year to calculate capital gain on your investment portfolio. Next, fill out Form 8949 to determine the amount you gained.

You must file Form 8949 and also report any sale of precious metals to IRS. This will ensure you pay taxes on all the profits that your sales generate.

Consider consulting a trusted attorney or accountant before selling your precious metals. These professionals can ensure that you adhere to all procedures and avoid costly errors.

Does a gold IRA earn interest?

It depends on how many dollars you put into it. If your income is $100,000, then yes. You will not be able to answer if your income is less than $100,000

The amount of money that you put into an IRA is what determines whether it earns or not interest.

If you are putting in more than $100,000 annually for retirement savings, you should open a regular brokerage account.

You will likely earn more interest there, but you'll also be exposed to riskier investments. It's not a good idea to lose all of the money you have invested in the stock exchange.

An IRA is better if you have $100,000 to invest per year. At least until there is a rebound in the market.

What kind of IRA can you use to hold precious metals in?

A Individual Retirement Account (IRA), is an investment vehicle offered by most financial institutions and employers. Through an IRA, you may contribute money to an account that grows tax-deferred until withdrawn.

An IRA allows for you to save taxes while still paying taxes when you retire. This means more money deposited into your retirement plan today versus having to pay taxes on that money tomorrow.

The beauty of an IRA is that contributions and earnings grow tax-free until you withdraw the funds. Early withdrawals are subject to penalties.

After age 50, you can make additional contributions to an IRA without penalty. You'll owe income tax and a 10% federal penalty if you withdraw from your IRA in retirement.

Withdrawals made before age 59 1/2 are subject to a 5% IRS penalty. There is a 3.4% penalty for withdrawals between the ages 70 1/2 and 59 1/2.

An IRS penalty of 6.2% applies to withdrawals above $10,000 per year.

Statistics

The maximum yearly contribution to an individual's IRAs is currently $6,000 ($7,000 for those 50 years or older), or 100% of earned income, whichever is less. (monex.com)
Same tax rules as traditional IRA SEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less Before setting up a Silver IRA, understand the fees and IRS restrictions. (sltrib.com)
SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (sltrib.com)
The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (forbes.com)

External Links

How To

Precious Metals Approved By the IRA

IRA-approved precious materials are excellent investments whether you're looking for ways to save money for retirement or to invest in your next business venture. Diversifying your portfolio can protect you from inflation with a variety of options, including silver coins and gold bars.

Precious metal investments products can be purchased in two forms. Bars and coins, which are physical bullion products, can be considered tangible assets as they are in tangible form. On the other hand, exchange-traded funds (ETFs) are financial instruments that track the price movements of an underlying asset, such as gold. ETFs work just like stock exchange stocks and can be bought directly by the company issuing them.

There are many kinds of precious metals you can buy. Silver and gold are frequently used for ornaments and jewelry making, while palladium and platinum are more often associated with luxury items. Palladium holds its value better than that of platinum which makes it ideal to be used in industrial applications. While silver is used in industry, decorative uses are preferred over it.

Due to the high cost of refining and mining raw materials, physical bullion products are more expensive. These products are generally safer and more secure than paper currencies. Consumers may lose faith in the currency and seek out alternatives if the U.S. dollar falls in purchasing power. Physical bullion products on the other side do not depend upon trust between countries and companies. They are backed instead by central banks or governments, providing customers with peace of mind.

According to supply and demand, gold prices can fluctuate. The price of gold will rise if there is more demand. Conversely, a decrease in supply can cause the price to fall. Investors can profit from fluctuating gold prices by taking advantage of this dynamic. These fluctuations are good for investors who have physical bullion products as they get a better return on their investment.

Precious metals, unlike other investments, are immune to economic recessions or changes in interest rates. The price of gold is likely to continue rising as long the demand for it remains strong. Because of this, precious metals are considered safe havens during times of uncertainty.

These precious metals are the most in demand:

Gold – Gold is the oldest type of precious metal and is often called “yellow metal.” While gold is a familiar name, it is an extremely rare element that is found underground. Most of the world’s remaining gold reserves are found in South Africa.
Silver – Silver is the second most valuable precious metal after gold. Silver, like gold, is extracted from natural deposits. Silver is extracted from ore, not rock formations, unlike gold. Due to its durability and conductivity as well as its resistance to tarnishing it is widely used for commerce and industry. The United States produces over 98% of all global silver production.
Platinum – Platinum is the third-most valuable precious metal. It can be used to make high-end medical equipment, fuel cells, and catalytic converters. It is used in dentistry for dental crowns, fillings and bridges.
Palladium: Palladium is the 4th most valuable precious metallic. Its popularity is growing rapidly among manufacturers because of its strength and stability. It is used in electronics and aerospace technology, as well as military technology.
Rhodium- Rhodium, the fifth most precious precious metal, is also known as Rhodium. Rhodium is a rare metal, but it is highly sought-after because of its use as a catalyst for automobile engines.
Ruthenium – Ruthenium ranks sixth in the list of most valuable precious metals. While there are only limited supplies of platinum and palladium, ruthenium is plentiful. It is used in the manufacture of steel, aircraft engines, as well as chemical manufacturing.
Iridium- Iridium, the seventh most precious precious metal, is also known as Iridium. Iridium is a key component in satellite technology. It is used to construct orbiting satellites that transmit television signals, telephone calls, and other communications.
Osmium: Osmium is eighth most valuable precious metallic. Osmium's ability to withstand extreme temperatures makes it a common metal in nuclear reactors. Osmium can also be used in jewelry and medicine as well as cutting tools.
Rhenium: Rhenium ranks as the ninth-most valuable precious metal. Rhenium is used in refining oil and gas, semiconductors, and rocketry.
Iodine – Iodine is the tenth-most valuable precious metal. Iodine can be used in radiography, photography, and pharmaceuticals.

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By: Jamie Redman
Title: Ethereum Market Analysis: Potential for 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