Popular cryptocurrency analyst Ali Martinez expressed bullish sentiments on Ethereum (CRYPTO: ETH), citing an attractive risk-to-reward ratio.
What Happened: In an X post on Monday, Martinez stated his optimism toward the second-largest cryptocurrency, highlighting its potential for a long position. He revealed his strategy, setting his stop-loss below $1,880 and targeting a take-profit price of $6,000.
The risk-reward ratio is a way to evaluate the potential gains of a trade against the the potential loss. In a highly volatile cryptocurrency market, this ratio helps traders decide whether a trade is worth pursuing.
As of this writing, the entry price of Ether was $2,460.54, meaning an initial risk of around $600. With Martinez hoping to take a profit at $6,000, the reward would be $3,540. The risk-reward ratio was thus roughly 1:6.
Why It Matters: Martinez’s optimism was not supported by moving average (MA) indicators, with nearly all of them flashing a “Sell” signal for Ethereum, according to TradingView.
Furthermore, momentum indicators like the Awesome Oscillator and the Moving Average Convergence/Divergence also painted a bearish chart for Ethereum.
Cryptocurrency analytics firm 10x Research underlined in a recent video the factors that were putting pressure on Ethereum. The foremost was its declining staking yields, which stood at just over 3.1% as of this writing, as per Staking Rewards.
In contrast, rewards on risk-free U.S. Treasurys were much higher, with the 2-year yield at 4.21% and the benchmark 10-year yield at 4.31%.
Moreover, the rising dominance of Solana (CRYPTO: SOL), powered by the meme coin frenzy, was taking attention and investments away from Ethereum, which used to be the preferred platform for such projects.
In a nutshell, analysts at 10x Research were skeptical about Ethereum’s long-term prospects unless there’s some “significant innovation.”
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