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How to play virtual currencies?

Views 16082024.12.12

Ether Trend Analysis | Application Drivers and Technical Analysis Two Pipelines

I found that many times the views on Ethereum are ambiguous, and today I will try to understand it with you. $ Ether (ETH.CC) $ und $ Bitcoin (BTC.CC) $ The concept of investing is presented in different places and the uniqueness of both.

Latest Ethereum Trends

Bitcoin has a rarity

(Source: Bitbo, as at 12 December)
(Source: Bitbo, as at 12 December)

(Source: Bitbo, as at 12 December)

According to the Bitcoin White Paper, the Bitcoin supply cap is 21 million. As of December 12, 19.9 million bitcoins are already on the market to be developed. Rarity+is widely acknowledged that many countries in the region are considering including Bitcoin in strategic reserves as the main reason for the recent surge. The mainstream view is that Bitcoin is resistant to inflation and benefits the development of the cryptocurrency industry.

Ether has applicability

As the native token of the Ethereum blockchain, Ethereum plays a key role in the development of digital assets. Unlike Bitcoin primarily as a rare digital gold, Ethereum was originally designed to support a wider range of application scenarios, and Ethereum's movements are more application-driven. SIMPLY PUT, MAINLY CONSIDERING THAT IF DECENTRALIZED TRANSACTIONS ARE TO TAKE PLACE IN THE WORLD OF WEB3.0 IN THE FUTURE, BITCOIN'S RARITY DESIGN WILL RESULT IN EXCESSIVE TRANSACTION COSTS, LEADING TO THE BIRTH AND DEMAND OF ETHEREUM.

The Ethereum network allows developers to create smart contracts and decentralized applications (dApps), bringing endless possibilities to the digital asset realm. Through Ethereum, users can participate in decentralized finance (DeFi) activities such as lending, trading, and earning farms, etc. In addition, the Ethereum movement also benefits from the minting and trading of non-denominated tokens (NFTs), driving the development of digital art and virtual assets.

Ether's programmability makes it the basis for building more complex financial tools and services. It is not only a trading medium, but the fuel that drives the entire Ethereum ecosystem. WITH THE LAUNCH OF ETHEREUM 2.0, THE NETWORK WILL SHIFT TO A PROOF-OF-INTEREST MECHANISM TO FURTHER IMPROVE SCALABILITY AND ENERGY EFFICIENCY.

In sum, Ethereum is far beyond mere value storage in the field of digital assets, providing a powerful platform for innovation and economic activity, driving the widespread adoption and development of blockchain technology.

It is worth noting that Ethereum technology continues to innovate, from the time of issuing about 18 million Ether annually as a market failure, until the upgrade to Ethereum 2.0 in 2022, and the introduction of a shrinkage mechanism for targeted destruction of Ethereum, which has led to a certain degree of scarcity. Therefore, the Ethereum Foundation later developed an upgrade plan for Ethereum 2.0.

This is also why Ethereum has so far failed to break through the 2021 high of $4795, when the speculative hype of NFTs caused a bubble in the Ethereum price, but as the Ethereum upgrades, oversupply issues are solved, the development of digital assets will be an important element in challenging Ethereum to regain historic highs, Rare+Widely Accepted+Applicability is the investment logic of Ethereum today.

With the creation of more cryptocurrency regulators, many financial opportunities are also planning to push digital assets continuously in the coming years, and while the roadmap for development is still unclear, this is precisely why cryptocurrencies other than Bitcoin are bringing investment opportunities. As the second largest currency in the ring by market capitalization, Ethereum is currently trailing behind.

Therefore, when investing in Ethereum, do not deploy it because the Ethereum price is lower. Blind chasing is not the core logic of investing in Ethereum. Moreover, the investment entry threshold for cryptocurrencies itself is not high, and the price of Bitcoin and Ethereum should not be a factor in investing without buying each. Although there are lagging factors, this is mainly to be considered from a market capitalization perspective.

If you want to keep abreast of changes in market capitalization, you can go from Markets->Cryptocurrencies->24-hour leaders->Market Charts on your phone.

(Source: Futubull, closed at 12.12.12.1200)
(Source: Futubull, closed at 12.12.12.1200)

(Source: Futubull, closed at 12.12.12.1200)

For more detailed content, please visit our Futubull ClassroomBitcoin vs Ethereum, which one is more worth investing in?“

Ethereum Trend Analysis -- Technical Analysis

On deployment, Ethereum's operational recommendations are driven by technical analysis. The movement of Ethereum shows a strong technical pattern on the chart and deserves the attention of investors. Individuals believe that Bitcoin is still more suitable if you are inclined to make long line investments. But the potential of Ethereum should not be overlooked if it is to capture recent upside.

One question worth thinking about is that on the lunar line chart, Ethereum likewise forms a “cup handle” shape, with $3800 being approximately the neck line of this cup handle shape. If the price stabilizes above 3800 in the aftermarket, as suggested by the above metric, the price is expected to be $6600.

According to the author, the above target price is not impossible if viewed from a long line angle. The concept of technical analysis itself does not have a precise time point to guess when the target price will be reached, and the above is used to evaluate the monthly chart. In addition, refer to the view of the major banks on Bitcoin, introducing forecasts of $0.15 million to $0.2 million. The correlation between Bitcoin and Ethereum is quite high. If Bitcoin can reach the target price mentioned by the bank, then Ethereum is also very likely to reach the assumptions on the chart.

In practical terms, what is worth paying attention to is the performance of the daily chart. ETH price has been maintained between the mid-term bullish channels, following the introduction of ETH in early November, following the introduction of ETH in early November, in a typical move higher than wave. In operation, support and resistance levels can be considered with this ascending channel as a reference. In the short term, you can pay more attention to the technical indicators of the MACD, and if a “gold cross” double bull signal can be issued in the short term, a more significant upswing may be expected in the short term.

The more critical resistance level is currently at this year's high of $4095, and if this level is breached, the subsequent trend will become more evident and may be conditioned to challenge the all-time high of $4770.

Bitcoin ETF and Ethereum ETF

A final tip is that investing in cryptocurrencies directly is certainly a good option, but if investors who are not familiar with cryptocurrencies can also access cryptocurrencies through ETFs, here are the relevant cryptocurrency ETFs for Hong Kong stocks.

Bitcoin: $CSOP Bitcoin Futures ETF(03066.HK)$ $Bosera HashKey Bitcoin ETF(03008.HK)$ $ChinaAMC Bitcoin ETF(03042.HK)$ $Harvest Bitcoin Spot ETF(03439.HK)$

Ether: $CSOP Ether Futures ETF(03068.HK)$ $Bosera HashKey Ether ETF(03009.HK)$ $Harvest Ether Spot ETF(03179.HK)$ $ChinaAMC Ether ETF(03046.HK)$

  • Author Information

    Tam Chi Lok

    Chief Analyst of Futu Securities

    CE No.CentralCode: AVJ390
    (The author is a licensee of the Securities and Exchange Commission and its affiliates do not have any financial interest in the Proposed Share Issuer)

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