Today, the crypto market is green after taking a breather from yet another bearish wave yesterday. Bitcoin (BTC), the largest digital currency by market capitalization is currently up by 1.96% to trade at $50,700. On the other hand, Ethereum (ETH) has gained 5.17% of its value over the past 24 hours. This uptick has seen the coin change hands at $3971.
However, this is not a foreign phenomenon in the crypto space, seeing as the industry is prone to speculation, which in turn leads to wild price swings. Despite the fact that both coins perform poorly sometimes, they have come a long way to get here. Take BTC as an example. Over the past year, the coin has climbed from the $8,000-$10,000 levels to its current price.
Nonetheless, it is worth noting that ETH has significantly outperformed BTC over the same period. As of May 13, 2020, ETH was worth approximately $200. Compared to its current position, the coin’s price change over the past year is 2,000%. Since the start of this year, ETH is up more than 500%, which is almost four times the gains of BTC.
A word of advice to traders
Commenting on ETH’s performance, Ari Wald, the Head of Technical Analysis at Oppenheimer Holdings, said,
“The performance has been outstanding. Take these stats for instance. In ethereum, in February there was a 35% pullback. If you bought it right ahead of that drawdown and then you were down 35% but held through, you’d still be up over 100% right now.”
While ETH’s performance has been nothing short of exemplary, Wald cautioned that the digital currency is extremely volatile and that traders should be wary of it. He added that with big upside rewards comes big trading risk. While he did not say that ETH is bound to plunge, Wald concluded by saying that even if the coin continues trending higher, it will still be highly volatile.
Echoing Wald’s sentiment, the President of Joule Financial, Quint Tatro said anyone seeking to venture into cryptocurrencies should approach the matter as part of a well-diversified plan. He went on to warn that traders should also exercise caution. While he does not object to crypto trading, Tatro said traders should steer clear of buying crypto assets based on technical data or breakout levels because this can easily land them in trouble.