While Bitcoin and the rest of the market have taken a nosedive, Ethereum made new all-time highs. Let's take a look at Ethereum's trend and a suitable strategy you can use!
Ethereum the Exception
The crypto market took a hit this week after Bitcoin failed to break above $65,000. ETH temporarily regained its lost ground and even made new all-time highs.
The crypto market usually follows Bitcoin, but it doesn't do so to the letter. Ethereum, for example, is somewhat delayed. When Bitcoin starts an uptrend, Ethereum typically follows a little later. When Bitcoin's uptrend ends, Ethereum may continue with a bullish sentiment for a while longer. This divergence can be seen clearly in the last uptrend when Bitcoin peaked on December 17, 2017, while Ethereum reached its top two weeks later, on January 13, 2018.
Trading Ethereum
We have found the MACD to be one of the best indicators when it comes to the crypto market from our backtesting. In general, cryptocurrencies tend to have strong trends over prolonged periods of time. As a result, trend-following indicators work well.
Indicators can be improved significantly by changing a few parameters. The MACD has three customizable parameters, namely: Fast Period, Slow Period, and Signal Period. Changing these parameters can make a big difference. For example, the basic MACD strategy of entering a position when the MACD signals a buy and exiting when it signals a sell with the default parameters (trading with all equity and accounting for a 0.1% fee) would have resulted in a profit of 89,465.29%, and a winning percentage of 38%. This is significantly worse than the buy and hold of 181,961.76%
However, changing the parameters to Fast Period = 20, Slow Period = 35, and Signal Period = 12 results in a whopping 554,693.47% profit and a winning percentage of 46%.
Ethereum the Exception
The crypto market took a hit this week after Bitcoin failed to break above $65,000. ETH temporarily regained its lost ground and even made new all-time highs.
The crypto market usually follows Bitcoin, but it doesn't do so to the letter. Ethereum, for example, is somewhat delayed. When Bitcoin starts an uptrend, Ethereum typically follows a little later. When Bitcoin's uptrend ends, Ethereum may continue with a bullish sentiment for a while longer. This divergence can be seen clearly in the last uptrend when Bitcoin peaked on December 17, 2017, while Ethereum reached its top two weeks later, on January 13, 2018.
Trading Ethereum
We have found the MACD to be one of the best indicators when it comes to the crypto market from our backtesting. In general, cryptocurrencies tend to have strong trends over prolonged periods of time. As a result, trend-following indicators work well.
Indicators can be improved significantly by changing a few parameters. The MACD has three customizable parameters, namely: Fast Period, Slow Period, and Signal Period. Changing these parameters can make a big difference. For example, the basic MACD strategy of entering a position when the MACD signals a buy and exiting when it signals a sell with the default parameters (trading with all equity and accounting for a 0.1% fee) would have resulted in a profit of 89,465.29%, and a winning percentage of 38%. This is significantly worse than the buy and hold of 181,961.76%
However, changing the parameters to Fast Period = 20, Slow Period = 35, and Signal Period = 12 results in a whopping 554,693.47% profit and a winning percentage of 46%.