Permalink to Ethereum (ETH) Price Analysis: 5 Key Factors to Watch
The markets have substantially gone down this last week, and it hasn’t been due to a news event or any driver other than selling pressure and lack of interest.
The purpose of this update is to tell you what I am doing and why. It’s up to you to determine what you would like to do.
I ladder in my positions and it works to prevent substantial losses, but as you know, even the most sound strategy in crypto has a lot of risk.
Here is why I am in hodl mode with ETH.
1. Constantinople Upgrade – If you don’t know about it, this is an upgrade to Ethereum that’s designed to fix a lot of the scaling issues people have been worried about.
2. Ethereum Futures – The CBOE has confirmed that they are doing ETH futures. All they were waiting on is the CFTC to clear ETH as a commodity, which they did. I even called my buddy at the CBOE and confirmed that they are moving forward with ETH futures at the end of the year.
Here is what is interesting about ETH futures. You aren’t required to keep assets on hand to meet settlement needs. But a lot of time, places do to hedge risk. It would make sense that some big players would start buying ETH to ensure they can hedge themselves against risk. They have to be loving this cheap ETH to hedge themselves for the futures market if they are indeed hedging risk.
3. Institutions Moving Towards Crypto – Some institutions like the Yale endowment fund have been making head lines for investments in crypto. While a lot of these are private, certainly a lot will be directly into the markets.
4. Some Technicals – ETH has broken this down trend line, but it hasn’t mattered. What I think does matter is the fact that ETH/BTC is very low, almost at 2016 levels and is oversold. I would imagine we will find stability down at these levels.
5. 88% Decline – Finally, we have gone down more than BTC’s 81% decline in 2014. I don’t know that ETH is going to 6k, but I certainly think we are due for a large bounce. If you could go back and buy BTC at $200, wouldn’t you?
I imagine we will see some favorable action after the Constantinople upgrade on October 19th. We’ll need to evaluate once that happens.
Happy Hodling, Sherem
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