Tinashe Mchedezi, Prof Nyankomo Marwa
Abstract
This paper presents a comparative analysis of select technical investment strategies and their impact on the performance of Ethereum, one of the leading cryptocurrencies in the digital assets market. As the cryptocurrency landscape evolves, investors increasingly rely on technical analysis to inform their investment decisions. This study adopts a quantitative research design, employing technical indicators to evaluate and compare the effectiveness of various investment strategies applied to Ethereum. The strategies analysed include Bollinger Bands, Relative Strength Index (RSI), Moving Average Envelope, and the Buy & Hold strategy. Utilising 3,242 historical daily price spanning from March 2016 to January 2025. The findings indicate that, despite the dynamic nature of the cryptocurrency market, the Buy & Hold strategy emerged as the most effective in terms of long-term returns and risk-adjusted performance. The findings offer critical insights for investors: those seeking optimal long-term returns in the Ethereum market may benefit more from Buy & Hold strategy than from frequent trading based on technical indicators. However, technical analysis-based strategies, particularly RSI, demonstrated relative strength in capturing certain momentum opportunities and may hold value for active traders targeting short-term gains or for risk management in bearish market phases. The study highlights the importance of aligning investment strategy with individual risk tolerance, market conditions, and investment horizon. Future research could explore hybrid strategies that combine passive and active approaches to enhance performance across different market environments.