Where next for volatile Ethereum pricing?
This top crypto asset has gained traction since falling in March. Our chartist looks at key scenarios.
20th August 2020 09:26
by Alistair Strang from interactive investor
Share on
This top crypto asset has gained traction since falling in March. Our chartist looks at key scenarios.
Ethereum (COIN:ETHUSD)
A glaring hole in the logic with crypto currency comes from massive swings in value.
Imagine selling your central London garden shed for 500 bitcoin, valuing it at around $5 million (£3 million).
Within a few weeks, the rate changes and you've just let your shed go for $2.5 million instead.
As a result, instead of being a property speculator you've just become a crypto speculator.
This level of risk is obviously present with any international transaction.
A chum, who imported staircases to the UK from Italy, would regularly check euro movements with us before paying his supplier.
Sometimes he'd be wisest paying invoices early, and at other times delaying a few days which could make a substantial difference to the bank transfer.
But as crypto currency is an ideal way to hide ill-gotten gains, selling and buying physical items certainly implies a risk quite far beyond the taxman's remit.
Ethereum price movements certainly look worth some consideration, if considering using a stash of them to purchase something.
At present, movement above $450 looks very capable of accelerating the value to $495 next, where, visually, some hesitation looks possible.
If exceeded, things become rather more interesting as our secondary price level calculates up at $642.
In fact, with closure one day above $495, the longer-term attraction works out at $824.
If it all intends to go wrong, Ethereum, trading at $411 at time of writing, needs to slip below $300 to ring the first warning bell for reversals coming.
We suspect, if you're about to purchase a discrete Van Gogh with Ethereum, it may prove worthwhile waiting a few weeks.
*** We commented on the 19th August Supply@ME Capital (LSE:SYME) were listed on the AIM. They are actually listed on the main LSE market. Sorry.
Source: Trends and Targets Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.