Ethereum (ETH) has lost ground against Bitcoin (BTC) the past few weeks but we might have a bullish reversal around the corner. The 4H chart for Ethereum dominance (ETH.D) shows that there is room for dominance to rally further near term towards the 38.2% fib extension level. If it ends up breaking out the triangle, we could see it break past the 200 moving average as well which could be a major catalyst for an altcoin run near term. Ethereum (ETH) like the rest of the altcoins might end up losing the most during the next downtrend despite its temporary gains. Investors would therefore be better off trying to dollar cost average their sell orders to gradually minimize their exposure before the next decline.

Investing has become far too easy this past decade. There are a ton of platforms and apps that let you invest in index funds and exchange traded funds which has now pushed the stock market deep into a bubble phase. The more air that is pumped into this bubble, the harder it is going to pop in the end. The average investor is too comfortable buying stocks even at such higher valuations. In my opinion, the altcoin market is an offshoot of that and the same thing is going on here. People are so comfortable buying cryptocurrencies that are not backed by any business. Millions of dollars have been poured into useless ICO tokens that are not even stocks in the companies selling them. You are not entitled to equity in the company, you are not entitled to any voting rights in the company, you are not entitled to profits; you only have a token that is worth only what someone will pay for it and it dances to the price of Bitcoin (BTC).

Bitcoin set out to solve a big problem which was the double spending problem. However, that vision has long been lost. This market is not what it used to be. It is a far riskier market than the stock market. In my opinion, it is even worse than penny stocks because if you invest in penny stocks you are at least buying stock in a bad company. In the case of cryptocurrencies, you are buying a “network token” or a “utility token” or whatever they start calling it next.

Hoping and wishing is a dangerous game to play in any market. In this market, a lot of people are hoping for ETH/USD rallying to a new all-time high during the next halving or soon after. Most altcoin buyers that are sitting on losses think their coins will eventually turn around and they will end up being profitable at some point, but what if they don’t? What if these altcoins are wiped off during the next bear trend? It is very important that we realize that investing in altcoins is not the same as investing even in penny stocks, it’s worse than that from a risk/reward standpoint and should therefore be approached as such.