Ether is still a much-undervalued cryptocurrency, especially before the launch of ETH2.0. The year 2020 was a good year for the coin that brings “Smart Contracts”, a much-needed element in today’s world.
Despite many negative views on the cryptocurrency market, most coins gained significantly in 2020, and that’s on top of having a rough year. In fact, Ether is no exception.
Ether stats in 2020
ETHER: 3 Things to know before 2021:
If Ether was not on your watchlist this year, you probably missed out, but it’s not too late to add it back to your portfolio. Here are our 3 THINGS TO KEEP IN MIND WHEN APPROACHING YOUR LONG TRADING STRATEGY IN ETHER:
1. Know your trading strategy
A big mistake most traders do, be it in legacy markets or crypto markets, is not having a predefined strategy. Are you trading for the short term? What is your exit strategy in case things go south? When will you take your profits?
You might think that those are inane questions, but in fact, those are all extremely important questions anyone should ask himself before entering any trade.
“If you fail to plan, you are planning to fail”
2. Set your stop Loss ALWAYS
For swing traders (setting trades over a period of a few days to several weeks), if you are buying Ether today, it is advisable to set your stop loss around the support yellow line of $250 to $300, depending on your risk management strategy (in fig.1).
Any major price dip below that level will carry the price to the next support area, which is around $130 (The starting price of Ether this year). Setting your stop loss this way is not a way to get out permanently, but it’s a way to buy back at a better price. Remember, you are looking to make huge gains in the long run. Ether is not a small altcoin anymore.
3. Keep an eye on the whole crypto market
As stated in our previous article, Ether’s price is highly correlated to the price of Bitcoin, a cryptocurrency with 60% dominance. This means that any major news affecting the cryptocurrency market will definitely have a big impact on the price of Ether. Being able to catch the news and react accordingly will be of a BIG advantage to you.
Recently, the Fed Chair Jerome Powell said that the Fed is still looking into digital currency. How will this news impact the cryptocurrency market?
Looking at fig.2, one can’t but assume that the bear market is coming to an end in 2020, with the hopes of having an extended uptrend in 2021, especially with the soon to be launched “phase 0” of Eth 2.0, which should be launching in late 2020. Ethereum will become a proof-of-stake blockchain, which is a huge change carrying huge benefits, higher transaction speeds, and lower gas fees.
Stay ahead, stay updated
Rudy Fares
