Ethereum is the second-most capitalized coin in the crypto market, and it is prevalent among traders. One of the most frequently asked questions is, “how do I know when it is trading up?” Let’s review!
Ethereum Fundamentals The Ethereum platform is used by developers to build different kinds of decentralized applications, including new digital assets, uncensored web apps, decentralized autonomous organizations, decentralized finance, etc.
Ethereum also serves as the platform for more than 260,000 different cryptocurrencies, including 47 of the top 100 cryptocurrencies by market capitalization.
Identifying the Trend Identifying an asset's trend is often overlooked by novice traders who attempt to make as much profit as possible by scalping on the 5-minute chart. However, the trend is an essential component of trading.
Moving Averages on the 1-day chart usually do an excellent job of identifying the trend. In the chart above, we have used the crossover of the 10 Exponential Moving Average (EMA) and the 50 EMA. When the fast 10 EMA crosses above the 50 EMA, a buy signal is given, and when it crosses below it, a sell signal is given.
This strategy is far from perfect, as we can see by the two fake signals in the chart above. However, the other three signals identified a rise in ETH by 183%, 87%, and 165%. You don't need to trade on these signals; however, you can use them to gauge in which direction the market is heading. You can then set up your strategy to trade according to the underlying trend.
Looking Ahead: Currently, the strategy has indicated a sell signal, which means that Ethereum may enter a bearish market. It is possible that this signal is fake and that the price will recover shortly. However, you can also take advantage of this by preparing to take long positions with your strategy on the Ethereum leveraged short-tokens such as BTCDOWN or ETHBEAR.