I generally support it Ethereum (CCC:ETH-USD) and many other comparative cryptocurrencies. Although decentralized protocols have problems to overcome – like any other innovative platform – the concept of a transaction mechanism is largely a self-intelligence breakthrough.
Over time, major commercial institutions can potentially leverage this technology to promote efficiency in areas such as supply chain management and health administration.
But then the above statement leads to an awkward question: if I’m so bullish about Ethereum and other cryptocurrencies, why have I shown a propensity for caution if not entirely skeptical of the sector?
It really would be weird to have a share and talk about all the reasons why you shouldn’t own it. However, the wilderness of cryptocurrency is occasionally available in unusual circumstances.
Still, that’s not the main reason why I say the way it is for Ethereum. On the contrary, I prefer to be better known as a realist than an advocate of crypto or any other asset class.
It is not necessarily completely contradictory to warn others of the risks of volatility in the digital space.
For example, we’ve all seen those intervention-type reality shows, even if only for brief moments – and stop typing, I know you know what I’m talking about! Only part of human nature.
In many, if not most cases, the reason why families organize interventions for their loved ones is precisely that – they love them and do not want to be further harmed. The biggest step to solving a problem is to acknowledge that you have it.
But an even bigger step can be recognizing when someone else has a problem. And folks, with ETH we’ve gotten huge.
Ethereum and erosion of sentiment
As I said before InvestorPlace articles, one of the main criticisms I have about cryptospace is often gas lighting, which includes what I call the magic words of chaining blocks.
People use terms like decentralization, hash functions, and open source distribution to reinforce pseudo-intellectual conversational points.
We now have freedom of speech in the US and all this jazz so people can say what they want. However, I believe there is real harm when social influencers deliberately mix up complex terminology to support rather irresponsible leadership like HODL, regardless of data from the environment.
I think there may be two seemingly conflicting concepts with Ethereum: a) you can believe in the long-term potential of the Ethereum network, and b) you have concerns about the imminent rumble.
Although the discipline of technical analysis is perhaps most compelling to the eye of the beholder, we can also objectively conclude that at the time of writing, the price of Ethereum ($ 3,237) is below its 200-day moving average ($ 3,438) and its 50 DMA ($ 3,960).
Thus, we can at least actually conclude that the upward path of ETH has hit a considerable wall.
Surprised and confused now is the question of whether Ethereum will get back on its feet or need a trip to the hospital. My belief is the latter. I see that too much speculation has been built into the cryptospace and some flushing of toxins is needed.
If the technical analysis is not convincing, Cointelegraph.com found that The Ethereum futures market is in decline. A term commonly associated with commodity or energy markets, such as oil, refers to the fact that a spot price is lower than the exercise price of a futures contract.
You can explore the granularity of backwardation, but the CliffsNotes version has bad consequences.
Supporting evidence points down
If the backwardation argument didn’t seem convincing to you, then you can consider that external factors also indicate that Ethereum is in trouble. In particular, the US Federal Reserve has raised high concerns about soaring consumer prices. It could end with the introduction of an aggressive hawkish monetary policy that would not encourage risky funds.
If even this argument doesn’t hold water, think that quite a few people benefited greatly from their crypto bets last year. Soon, these people will pay Uncle Sam (if they know what’s good for them).
The last time I checked, the IRS only accepts payments in U.S. dollars. That could lead to even more sales.
On the day of the Josh Enomoto release held a LONG position in ETH. The opinions expressed in this article are those of the author and are the subject of InvestorPlace.com Guidelines for publication.
Josh Enomoto, a former senior business analyst for Sony Electronics, has helped mediate major contracts with Fortune Global 500. Over the past few years, he has provided unique, critical insights into investment markets as well as various other industries, including legal, construction management and health care.