InvestAnswers: Ethereum’s Upside Far Exceeds The Downside
According to a prominent crypto analyst, the risk-versus-reward potential for Ethereum (ETH) looks very good, as ETH recovers from a heavy sell-off event few weeks ago.
Ethereum (ETH)
In a recent video update, the host of InvestAnswers shared with the YouTube channel’s 411K subscribers an ETH chart with a support and resistance levels drawn out to look into ETH’s upside and downside potential.
“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.”
On November 10 last year, ETH hit an all-time high of $4,878. It’s currently trading at $3,141 up 43% from a monthly low of $2,204 on January 24.
“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.”
Bitcoin (BTC)
Regarding Bitcoin (BTC), the InvestAnswers host points out that March hasn’t traditionally been very favorable month for the leading digital asset.
“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.”
He then shows a chart breaking down Bitcoin’s historical returns by month dating all the way back to 2013, in order to project how next month could look like.
“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 $43,974, up 1.2% on the daily chart.
