Bitcoin vs. Ethereum: Which Is the Better Buy? - U.S. News Some experts say that the comparison between Ethereum and Bitcoin is like comparing electricity with gold. The argument is that there's really no utility to Bitcoin other than being a store What is Ethereum Virtual Machine and How it Works? Block: This is an immutable storage for all actions and transactions related to Ethereum in its lifetime up until this block in particular. These blocks can be only 65,000 so this is not going to change. Blockhash: This is a hash of the block in question. is chainlink worth buying Buy the Chainlink Rally? - LINK Crypto Analysis
chain link is doing incredibly well in the last 24 hours it went up by 12.3 its the top gainer in the top 100 cryptocurrencies does it make sense to buy chain link right now in order to answer this question we are going to look at back tested technical indicators so ive run a back test trying to find out what are the best moving averages for chain link but were also going to look at relative performance for example relative to ethereum or to the entire altcoin market namely a measure called total three so without further ado theres a lot of things to discuss lets jump right in hi so this is the rally im talking about right since the 28th of may to today chain link went up by 35 and thats pretty impressive given the overall rather bearish momentum now is this likely to continue i think the picture is pretty mixed so this is the chain link chart measured in tether measured in us dollars basically together with two moving averages and also including a buffer band over here so this is a bit of a complex topic ive got a macro enabled excel sheet over here that looks at the data from the middle of january 2019 all the way to the beginning of april and with this macro sheet we can simulate buying and selling chain link so the basic idea is relatively straightforward we want to be betting on falling prices whenever the price is below the moving average and we want to be betting on rising prices whenever the price is above the moving average basically following the overall trend right when we tend to rise we are above the moving average when we tend to fall we are below were following the momentum now when you do this you want to find out whats the best duration for the moving average thats what we have over here so the daily durations lets look at this in chart form and we can see the approach doesnt work that well for chain-link right for other cryptocurrencies we very often see an outperformance versus buying and holding in black we have the hotter line but still if we want to take a moving average those are the best the 11-day simple or the 17-day exponential moving average and those are here plotted can also see a few thinner lines around this this is an additional buffer thats also back tested but lets not get too much into the details there have been similar kinds of back tests made on this channel im not going to repeat this all the time feel free to check out other related altcoin videos for this simply trust me on this historically it would have been bullish if we cross those upper bands so we would be actually buying here on the 7th of june and we would be bullish on chain link following the momentum the momentum now short term looks positive at least thats what the data whats the back test says now heres why i say this is a bit of a mixed bag there are two things going on here first of all we see relatively high trading volume right now so im now looking at coin market caps trading volume because the nice thing about the trading volume over here is that it aggregates the different exchanges and we are relatively high on the trading volume right now which is potentially a negative sign because when trading volume is high it tends to indicate that momentum turns around so we had here high trading volume we stopped the decline then trading volume goes down we continue with the current momentum when we zoom out a little bit more right we can see for example here at the beginning of 2022 trading volume was very high and we then stopped our increase and we had our turnaround and we declined afterwards so heightened trading volume is very often a sign for the current momentum to turn around here look for example at the 6th of september of 2021 very high trading volume also tended to be the highest point in the price so trading volume simply just means tokens go from one type of investor to the other meaning the reference price changes meaning very often the current momentum turns around and we are not historically high on trading volume but if we zoom in a little bit its still somewhat heightened so this was indicate that maybe the current positive momentum turns around again and we could be falling now another point and this is i think actually the major point here another point is the relative valuation so i personally i dont really like to look at the us dollar valuation that much because cryptocurrencies are very very highly correlated to one another so when we look for example here at the peak in may of 2021 in chain link when we look at bitcoin at the same time we also had a relatively high price here and we look at the bottom in july of 2021 in bitcoin when we look at the price in chain link also happened in july of 2021. so you dont get too much knowledge by looking at the us dollar price its way better to look at relative valuations now you could simply use bitcoin so this is the relative valuation to bitcoin this is the more common way of doing things i personally like to rather look at the relative valuation to ethereum or to total three so first lets start with ethereum why do i like the relative valuation to ethereum that much its because the correlation between ethereum and altcoins is higher than the correlation between bitcoin and altcoins and thats because the nature of the investment might be more similar right ethereum is more of a technology play if bitcoin is more of a macro economy play ethereum could be regarded as the largest of the altcoins so thats why i like to look at ethereums relative evaluation and we can see the long-term performance since july of 2020 basically is not positive versus ethereum an 85 underperformance and we are in a pretty clear long-term downwards trend now approaching one of the resistances so we did shoot out once right that was in january of 2022 so that would be an additional potential increase of maybe 16 17 or so depending how quickly we go up but the risk right in case we stay in this channel it is massive it is easy a loss of fifty percent now total three is a similar kind of measure total three shows us the cryptocurrency market cap minus bitcoins market cap and minus ethereums market cap meaning we are now looking at chain links performance relative to the overall altcoin market so we are not looking at the largest cryptocurrencies we are just looking at altcoins market cap and the picture the chart is very similar we are in a long term downwards trend and we are approaching a current resistance the potential gain is in a similar magnitude and so even though the back test here suggests that maybe we might be picking up steam here the out performance versus buying and holding of those moving averages isnt that great so i dont put too much emphasis on these signals i rather put emphasis on the relative valuation thus maybe in us dollar terms chain link could perform well in case over cryptocurrency market does well but in relative performance it might not so for the remainder of this video lets look at an idea at a trading idea to actually make money from this trend further going down so if youre optimistic that chain link is going to continue to underperform ethereum which it might very well be right the circulating supply is only at 50 percent so over the long term one more supply will hit the market so potentially j-link might long-term underperform further so if thats the thesis right how can we actually make money from this one way to do this is to borrow denominated in chain link and then swap that borrowed chain link into the asset we are bullish on so lets say in this case this is ethereum then wait for a while see how ethereum appreciates versus chain link and then afterwards when we are happy with the gains then again swap back that ethereum into chain link and since we dont have to swap all of the ethereum back to chain link because ethereum appreciated thats then how we make money so how can we do this in practice the way i do this is i look at a platform such as defy lama and i go over here to categories and then we want to look for the landing category right because we want to get a loan denominated and chain link and then we look for the platform for the blockchain that we want to make this transaction on so we could do this on ethereum but there youve got quite high gas fees you could also go with the binance smart chain with our launch with whatever youre currently actively using i personally i like phantom ive got some money on phantom right now the gas fees are very very low so we just go to phantom and then we look for a platform that we like usually the higher we go with the total value locked here right these are sorted by total value locked the safer those platforms tend to be lets go to geist finance the largest borrowing and lending platform for phantom it doesnt have that great of a time but its still the largest of the borrowing and landing platforms so we go over here to website and then we come to the geist.finance platform and over here we can see that we can borrow chain link for an apy of 3.6 percent and on top of that we also get rewarded in geist tokens by 16.2 percent so you actually even get paid to borrow here now whats important to note here is that there is a lockup period for the guys so the guys token might decline over time so i wouldnt bet the farm on this that youre really getting money out of this if the guys token totally implodes then youre not really making much money here so i would rather see this as a cherry on top and work with 3.6 borrowing costs so what youre doing is you first deposit whatever collateral your long-term bullish on if you still think that bitcoin might be a good bet over the very long term then simply deposit your bitcoin over here you dont get much up in an apy but thats basically how it works you deposit whatever you want to hold if you rather want to hold tether or die you deposit that similar thing right you dont get that much of an apy but you come over here you click say on die and then you deposit your collateral okay so i dont have any diet currently in this wallet but thats basically how it works you deposit your collateral then youve got in your dashboard your amount that youve deposited now with that deposit you can then borrow against this you would then click on borrow you would go to chain link you would borrow against your collateral denominated in chain link then youve got a loan and youre required to pay back chain link in the future so then youve got chain link in your wallet what do you then do you then swap the chain link the link token for the thing youre bullish on so for example in this case this would be ethereum youve got board chain link you swap it against ethereum and then you have ethereum in your wallet what do you do with that ethereum you could do anything with it the most straightforward way is to simply also just deposit this over here get a bit of an api and make sure that youve got enough collateral on the platform in order not to get liquidated so thats the most straightforward way you bought chain link you swap it against ethereum you deposit the ethereum you wait you hope for the chain link to further decline relative to ethereum once that happens you do the exact opposite right you swap your ethereum back to chain link you pay off the chain link denominated loan and youve got all that remaining ethereum as pure profit now does it make sense to jump on that exact trade right now i think it i it might make sense its not a bad idea there is of course a bit of a risk here i think the risk is manageable simply make sure youve got enough collateral that you dont get liquidated and have to pay like this 10 liquidation fee if thats true then youve got a pretty clear trade over here right just make sure youve got your stop loss and that you exit this in case we actually do break out of this long term downwards trend which i do not expect actually i rather expect that chain link continues to underperform so the current rally in my opinion is rather a chance to go bearish on chain link to bet on falling prices than to bet on rising prices at least in relative valuation not in the us dollar valuation now if this is your first time on the channel dont forget to subscribe i publish videos regularly theres also a premium membership of this channel its currently 49 us dollars per month we discuss trading ideas over there we also have a lot of exclusive content one premium video every single day of course telegram channels where you can ask me any questions directly so more information around all of this is in this video here so hope to see in that video and thanks for watching this one bye Premium Membership: Get 1-on-1 Coaching: My Chart Software: My Hardware Wallet: Chainlink, LINK Crypto, Chain Link, Chainlink Link, Chainlink Price Prediction, LINK Analysis, Chainlink Token, Link Coin, Link Cryptocurrency, Link Rally, Chainlink Price Up, Official Telegram Groups: Chat: News: Please LIKE 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