The development of ETH is based on the very same blockchain - the technology of decentralized accounting. In terms of cryptocurrencies, blockchain is a distributed database for storing transactions. It is in it that confirmation and synchronization of all transfers between wallets is made.
The Ethereum concept is trying to evolve the bitcoin idea into something more ambitious. Basically, Ethereum is a platform for developing decentralized applications. In Ethereum, it was decided at the protocol level to realize the undisclosed potential of the Bitcoin scripting language by adding a tool for creating smart contracts to the network.
In theory, Ethereum is capable of completely ousting Bitcoin from the market, being its more advanced alternative. This is facilitated by the presence of a well-coordinated development team and a vector for active development. However, the stability of Ethereum is still in question.
For the sake of fairness, it should be noted that the implementation of the same smart contracts is available on Bitcoin, provided that a separate setting is used. If this mechanism gains popularity, the future of Ethereum will not be clear.
The cryptocurrency is traded 24 hours a day, 7 days a week and is in constant motion. You can see at firs the price of 1 eth to btc. This is a trending instrument where short-term consolidations are present. Therefore, trending strategies will work well.
At the same time, the global trend tends upward when the growing volatility generates stronger corrections.
Thus, you can determine the zone of completion of the correction. More often than not, the price stops at the 61.8% level.
For Ethereum, strategies that have already outlived their usefulness on popular currencies are suitable. So, for example, a significant difference in the quotes of various exchanges indicates the suitability of a currency for trading in classical arbitrage. The essence of arbitrage is extremely simple - buy where it is cheap, sell where it is expensive.
On the other hand, no one forbids the use of statistical arbitrage. After all, cryptocurrencies are still quite young as trading tools, and therefore have a lot of inefficiencies. By analyzing the correlations of different cryptocurrencies, you can identify those very hidden dependencies and try to trade them. But due to the high overhead costs (spread + commission), the main focus is on long-term dependencies.
Bitcoin, for example, is sometimes used as a buffer zone to hedge funds against excessive volatility. Given the volatility of bitcoin itself, this sounds strange, but this is easily explained by its political neutrality. A good solution would be to create a neutral market portfolio that includes both traditional fiat currencies and cryptocurrencies.
And yet, expect and be prepared for crashes. In less than two weeks, Ethereum lost 40% of its value for no apparent reason, and such surges in volatility are quite typical for an emerging cryptocurrency.
If you are looking for long-term investing, wait until the pair falls to the lowest possible (according to individual estimates) mark and go buy. Most likely, the global uptrend will continue.
The cryptocurrency market is definitely not worth ignoring: