Ethereum (ETH) Upside Far Outweighs Current Downside, According to InvestAnswers
A popular crypto analyst is looking at the risk-versus-reward potential for Ethereum (ETH) as the second-ranked crypto asset sustains its recovery from a dramatic sell-off three weeks ago.
In a new strategy session, the host of financial education YouTube channel InvestAnswers shares with his 411,000 subscribers an Ethereum chart featuring a mix of support and resistance levels to plot out ETH’s upside and downside potential.
The InvestAnswers host says,
“I believe the upside of 60% to get back to all-time highs far exceeds the downside of about $2,400 – that’s 20% from where we are today.
From that perspective, you’ve got to weigh it up. Do you think there’s a faster horse you can jump on? What is your tax situation if you sell? How much you have to pay is going to eat into your profit.”
Ethereum reached an all-time high of $4,878 back on November 10th. It’s up 32.7% from a monthly low of $2,204 on January 24th and is currently priced at $3,022.
The analyst concludes his thoughts on Ethereum by saying,
“I still do believe everything runs on ETH. It’s a beast, and the layer-2s are going to help them out a lot…
I think ETH will slowly get nibbled away by some of the other layer-1s out there, but there’s also some exciting things happening with layer-2s on top of the ETH platform.
So just think about that upside versus downside.”
Moving on to what’s in store for top crypto asset Bitcoin (BTC), the InvestAnswers host notes that March has traditionally been a tough month for BTC.
“Bitcoin bleeds in March typically, 8.5 times out of 10…
March could be rocky, we do have the Fed meeting stuff… There is some global unrest.
And also, traders do trade based on expectations, so there could be a little softness in the Bitcoin market.
However, if all the bad news comes out in February, then March could be positive. For example, look back to 2021, it was actually a good month.”
The YouTube host consults a chart breaking down Bitcoin’s historical returns by month dating back to 2013 to see what might transpire next month.
“We had a positive 2021, up 30%. We also had 2019 up 7%, and 2013 up 172%.
It’s all across the board, but typically it is one of the worst historical months for Bitcoin, so we need to be careful.
What we also learned in 2021 is things are not as they seem and patterns do not repeat.”
At time of writing, Bitcoin is trading at $43,566, staying above the $40,000 threshold for the 10th day in a row.
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Author: Daily Hodl Staff
