BTC & co - why TA doesn`t work anymore
Updated
For the past days I have been watching the markets with great interest since I got a feeling there is something else going on, besides what meets the eye. So here are some thoughts about where BTC and all the major cryptos are now and why I believe we are looking at a controlled market where TA alone doesn`t work anymore.
First of all, TA works on the assumption that the market under scrutiny is big enough to have liquidity in order to create a mass-scale crowd-like behavior. This is the basis of TA. It needs a lot of traders, of all sizes and flavors who place a lot of orders, apparently in an orderly fashion, based on their expectations about the price of an asset which should reflect their expectation in regards to the underlying value of this asset at a certain moment in time. All the "classic" assets are in a known quantity which does not fluctuate unless extraordinary conditions happen and at those points the asset is actually taken off the market until the quantity is known again. In crypto world, this is far from reality.
If we take BTC for example, we have no idea how many BTC are actually on the market or even in circulation. All we have is estimates at best, but even those are hard to find. For sure we don`t know how many are up for trade, this is a fact. Then, we have no idea about how many traders there are and / or the size of their portfolios. We have no idea about the size of their orders either. On top of this, there are a lot of automated trading bots that constantly place and / or cancel orders at random, based on some pre-thought "strategies" of more or less experienced traders.
All the above alter greatly the very basis on which classic TA was constructed and used.
And then it comes the "news" ... the price reaction to good or bad news is extremely fast, like all the traders are watching 24h all the news channels, websites and on-line news feeds and act as soon as something hits the wires, on all exchanges. Since arbitrage is not possible due to the long time it takes to transfer BTCs between exchanges (at least 2-3 hours at best), this seems like an orchestrated symphony of a very few players that have enough BTC and money in their accounts across the exchanges in order to move the price up or down at the same time. Also it seems very strange that bad or good news come exactly at the precise moment when the prices were following a classic pattern, like EW, H&S, bats, etc. just to conveniently alter the predicted formation.
To me, all those aspects point to a controlled market already, where there is no chance at all to use TA alone in order to initiate, close or predict any kind of position at any given moment in the present, not to mention the future.
Basically, we are looking at a big casino where the house always wins, just that we don`t know who the house is.
Any thoughts, comments, ideas are more than welcome. Thank you
PS: if you look at other great traders ideas posted for the past two weeks, they were all correct until a point when they turned to be wrong or they were wrong until they turned correct later on. Makes you think how all of them missed what is going on.
First of all, TA works on the assumption that the market under scrutiny is big enough to have liquidity in order to create a mass-scale crowd-like behavior. This is the basis of TA. It needs a lot of traders, of all sizes and flavors who place a lot of orders, apparently in an orderly fashion, based on their expectations about the price of an asset which should reflect their expectation in regards to the underlying value of this asset at a certain moment in time. All the "classic" assets are in a known quantity which does not fluctuate unless extraordinary conditions happen and at those points the asset is actually taken off the market until the quantity is known again. In crypto world, this is far from reality.
If we take BTC for example, we have no idea how many BTC are actually on the market or even in circulation. All we have is estimates at best, but even those are hard to find. For sure we don`t know how many are up for trade, this is a fact. Then, we have no idea about how many traders there are and / or the size of their portfolios. We have no idea about the size of their orders either. On top of this, there are a lot of automated trading bots that constantly place and / or cancel orders at random, based on some pre-thought "strategies" of more or less experienced traders.
All the above alter greatly the very basis on which classic TA was constructed and used.
And then it comes the "news" ... the price reaction to good or bad news is extremely fast, like all the traders are watching 24h all the news channels, websites and on-line news feeds and act as soon as something hits the wires, on all exchanges. Since arbitrage is not possible due to the long time it takes to transfer BTCs between exchanges (at least 2-3 hours at best), this seems like an orchestrated symphony of a very few players that have enough BTC and money in their accounts across the exchanges in order to move the price up or down at the same time. Also it seems very strange that bad or good news come exactly at the precise moment when the prices were following a classic pattern, like EW, H&S, bats, etc. just to conveniently alter the predicted formation.
To me, all those aspects point to a controlled market already, where there is no chance at all to use TA alone in order to initiate, close or predict any kind of position at any given moment in the present, not to mention the future.
Basically, we are looking at a big casino where the house always wins, just that we don`t know who the house is.
Any thoughts, comments, ideas are more than welcome. Thank you
PS: if you look at other great traders ideas posted for the past two weeks, they were all correct until a point when they turned to be wrong or they were wrong until they turned correct later on. Makes you think how all of them missed what is going on.
Note
Thank you all who took time to post their opinions; greatly appreciated and very interesting comments. Please do keep them coming
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