Veteran trader Peter Brandt recently announced on social media platform X (previously known as Twitter) that he has taken a short position on ethereum (ETH), the second-largest cryptocurrency by market capitalization. Brandt, who has a following of 707,000 on X, also shared a technical chart to explain his strategy.
Brandt Takes Short Position on Ethereum, Suggesting Price Plunge
Since the beginning of 2023, the value of ethereum has increased by 85% against the U.S. dollar. This surge in price can be attributed to several factors. The possibility of a spot ethereum exchange-traded fund (ETF) receiving approval from the U.S. Securities and Exchange Commission (SEC) has created a bullish sentiment in the crypto community. Furthermore, onchain analytics indicate a significant accumulation of ETH by major holders, signaling positive market dynamics.
However, over the past two weeks, ethereum's upward momentum has slowed down, with a minor 1.4% dip in its value against the dollar. On December 18, 2023, Peter Brandt, a veteran trader with decades of experience, shared an ETH/USD chart from Tradingview. Brandt stated that classical chart patterns don't always perform as expected but added, "If the rising wedge in [ethereum] complies with the script, the target is $1,000, then $650."
Brandt also mentioned, "I shorted ETH on Friday – I have a protective [break-even stop]." Shorting in financial markets involves betting against an asset, in this case, ETH, and anticipating a decline in its value to profit from the short position. Adamant Capital founder Tuur Demeester and Colin Talks Crypto supported Brandt's sentiment, pointing to ETH's performance against BTC over the past five years and the possibility of BTC ETFs negatively impacting ETH.
While Brandt's chart indicates a potential reversal, the bearish pattern is not yet fully formed. The chart shows consistently flat lower highs and a series of lower lows, suggesting that sellers are currently more dominant than buyers. However, it is common for crypto assets to experience low trading volume during holidays, which bears might take advantage of. Therefore, ETH's descending triangle formation could be a temporary phenomenon.
Peter Brandt has been vocal about his views on crypto assets and economic matters for an extended period. In August, he referred to the Bitcoin halving as a "non-event." He has also advocated for a 100 basis points increase in the benchmark interest rate by the U.S. Federal Reserve. Brandt considers bitcoin (BTC) a legacy coin and dismisses most other cryptocurrencies as "make-believe crypto wannabees."
What are your thoughts on Peter Brandt shorting ether? Do you agree with his analysis? Share your opinions in the comments section below.
Frequently Asked Questions
What is a Precious Metal IRA?
Precious and precious metals are excellent investments for retirement accounts. Precious metals have been around since Biblical times and still hold their value today. The best way to protect yourself from inflation is to invest in precious metallics such as platinum, silver and gold.
Some countries also allow citizens to keep their money in foreign currency. You can buy Canada gold bars and keep them home. Then, you can buy gold bars in Canada and sell them for Canadian dollars when your family is home.
This is a simple way to make investments in precious metals. This is especially helpful if you don't live in North America.
What are the three types of IRAs?
There are three types of IRAs. Traditional, Roth, and SEP. Each type offers its advantages and disadvantages. We'll go over each of them below.
Traditional Individual Retirement Accounts
A traditional IRA allows for you to contribute pretax money to an account, where you can defer tax on contributions made now and earn interest. The account can be withdrawn tax-free once you are retired.
Roth IRAs allow you to deposit after-tax dollars into an account. This allows earnings to grow tax-free. Withdrawals from the account are also tax-free when you withdraw funds for retirement purposes.
This is similar with a Roth IRA, but employees are required to make additional contributions. These additional contributions are taxed, but any earnings grow tax-deferred once again. You may choose to convert the entire amount to a Roth IRA when you leave the company.
How to Open a Precious Metal IRA
An IRA to hold precious metals can be opened by opening a Roth Individual Retirement Account (IRA) that is self-directed.
This type of account is superior to other types of IRAs in that you don't pay any taxes on the interest earned from your investments, until you withdraw them.
This makes it attractive to those who want a tax break but still want to save some money.
You are not restricted to investing only in gold or silver. You can invest in whatever you like, provided it conforms to IRS guidelines.
People often think of silver and gold when they hear “precious metal” but there are many other precious metals.
Some examples include palladium, platinum, rhodium, osmium, iridium, and ruthenium.
There are several ways you can invest in precious metals. The two most popular options include buying bullion coins and bars and purchasing shares of mining companies.
Bullion Coins and Bars
Buying bullion coins and bars is one of the easiest ways to invest in precious metals. Bullion can be used to refer to the physical ounces or gold or silver.
When you buy bullion coins and bars, you receive actual pieces of the metal itself.
Although you may not be able to see any change immediately after purchasing bullion bars and coins at a shop, you will soon notice some positive effects.
This is an example of a tangible piece in history. Each coin or bar has its own story.
It is often worth less than its nominal price if you examine the face value. In 1986, the American Eagle Silver Coin was $1.00 per ounce. Today, however the American Eagle's silver coin is worth closer to $40.00 an ounce.
Bullion has had a tremendous increase in its value since its introduction. This is why many investors choose bullion bars and bullion coin over futures.
Investing in shares of mining companies is another great option for those looking to buy precious metals. When you invest in mining companies, you are investing in the company's ability to produce gold and silver.
You will then receive dividends, which are calculated based upon the company's profit. These dividends will then be paid out to shareholders.
Furthermore, the company has the potential to grow. As the demand for the product grows, the company's share price should increase.
Because these stocks fluctuate in price, it's important to diversify your portfolio. This is how you spread your risk across different companies.
However, mining companies are not immune to financial loss just like any stock-market investment.
If gold prices plummet significantly, ownership of your shares could be worthless.
The Bottom Line
Precious Metals such as gold or silver offer a safe haven in times of economic uncertainty.
Both silver and gold are subject to extreme price swings. You might be interested in long-term investments in precious metals. Consider opening a precious metals IRA with a reputable company.
You will be able to take advantage of tax incentives while also benefiting from physical assets.
Is gold IRAs a good way to invest?
You can invest in gold by purchasing shares in companies that mine it. You should buy shares in these companies to make money from investing in gold and other precious metals such as silver.
However, there are two drawbacks to owning shares directly:
Holding on to your stock for too many years can lead you to losing money. Stocks fall faster than their underlying assets (like gold) when they are declining. This could mean that you lose money rather than making it.
Second, you may miss out on potential profits if you wait until the market recovers before selling. Be patient and wait for the market's recovery before you make any profits from your gold holdings.
Physical gold can be beneficial if you prefer to keep investments separate from your finances. A gold IRA can help you diversify your portfolio, and protect against inflation.
You can find out more information about gold investing on our website.
How does gold and silver IRA work?
You can make investments in precious metals (such as gold or silver) without having to pay tax. These precious metals are an attractive investment for anyone looking to diversify their portfolios.
If you are over 59 1/2, income tax is not due on the interest earned from these accounts. Capital gains tax is not required for any appreciation in account value. You have to limit the amount you can deposit into this type account. The minimum amount you can put into this account is $10,000. If you're under the age of 59 1/2, investing is not allowed. The maximum annual contribution allowed is $5,500
If you die prior to retirement, your beneficiaries may not receive the full amount. After all expenses have been paid, your estate must contain enough assets to cover any remaining balance in your account.
Some banks offer a silver and gold IRA option. Others require you open a regular broker account, through which shares or certificates can be purchased.
Which is stronger: 14k gold or sterling silver?
Sterling silver, which contains 92% pure sterling silver instead of just 24%, is a stronger metal than gold or silver.
Sterling silver, also known as fine or sterling silver, is made of a combination of silver and other metals like copper and zinc.
The strength of gold is generally very high. It can only be broken apart by extreme pressure. It would be much easier to break it apart if you dropped an object on top a piece gold.
Silver isn't nearly as strong as either gold or silver. If you dropped an item onto silver sheets, it would likely fold and bend without cracking.
It is commonly used in coins and jewelry. Because of this, silver's value is subject to fluctuations based upon supply and demand.
How Much of Your IRA Should Include Precious Metals?
Protect yourself against inflation by investing in precious metals like gold and silver. It's more than just an investment in retirement. It also prepares you for any economic downturn.
While silver and gold have seen significant increases in the last few years, they are still safe investments since they don’t fluctuate as often as stocks. Plus, there's always a demand for these materials.
The prices of gold and silver are generally predictable and stable. They tend to rise during economic growth and drop during recessions. This makes them great money-savers and long-term investments.
Ten percent should go into precious metals. This percentage can be increased if your portfolio is more diverse.
- 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)
- The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (forbes.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)
- You can only purchase gold bars of at least 99.5% purity. (forbes.com)
How to Buy Gold for Your Gold IRA
Precious metal can be used to refer to gold, silver or platinum as well as osmium and ruthenium. It can be any element naturally occurring between atomic numbers 7 and 110 (excluding the helium). This is valuable due to its beauty and rarity. Gold and silver are the most popular precious metals. Precious metals are used in jewelry, money, industrial goods and art objects.
The price of gold fluctuates daily due to supply and demand. In the past decade, there has been a huge demand for precious metals as investors seek safe havens from unstable economies. This increased demand has caused prices to rise significantly. Some are concerned about the increased cost of production and have resisted investing in precious materials.
Gold is a good investment because it's rare and durable. The value of gold is never lost, which is unlike many other investments. Gold can be bought and sold without tax. There are two ways that you can invest your gold. You can buy bars and gold coins, or invest into gold futures contracts.
Instant liquidity is provided by physical gold coins and bars. They are easy for you to store and trade. However, they are not very inflation-proof. To protect yourself from rising gold prices, you can consider buying gold bullion. Bullion is physical gold, which comes in many sizes and shapes. One-ounce pieces are available for billions, while larger quantities such as kilobars and tens of thousands can be purchased. Bullion is normally stored in vaults that are fire- and theft-resistant.
You might prefer to own shares of gold than actual gold. If so, then you should look into buying futures gold. Futures let you speculate about how gold's price might change. You can purchase gold futures to get exposure to the gold price, but not the actual commodity.
If I wanted to speculate about whether gold's price would rise or fall, I could buy a gold contract. My position after the contract expires will be either “long” (or “short”) A long contract means I believe the gold price will rise, so I am willing to hand over money now in return for the promise of more money when the contract expires. A short contract on the other side means that I believe gold's price will fall. I'm happy to accept the money right now in exchange of the promise that I'll make more money later.
I will be paid the specified amount of the contract plus interest after the contract expires. By doing this, I can get exposure to the market price for gold without actually owning it.
Precious Metals are great investments as they are difficult to counterfeit. While paper currencies can be easily counterfeited by printing new bills, precious metals cannot. This is why precious metals have always held their value well over time.
By: Jamie Redman
Title: Peter Brandt Shorts Ethereum, Signaling Potential Downturn
Sourced From: news.bitcoin.com/veteran-trader-peter-brandt-shorts-ethereum-signaling-potential-downturn/
Published Date: Tue, 19 Dec 2023 16:30:06 +0000