I think most analysis assumes "rational investor" or "profit-seeking investor" or perhaps "dumb herd-animal investor". For me the category that tends to be absent in analysis is "mischief-making faux investor", and in the case of BTC we know it is conceivable that some entities (banks, governments, whatever) may be willing to do things that are wildly irrational for a "normal investor" in order to destroy or perhaps support BTC itself.
So, hypothetically, some entity may be willing to "do whatever it takes" to make the price stable for a while, perhaps a very long while. Many recent media stories warn about dangerous high volatility, apparently unaware of the boring stability in recent weeks. One can imagine forces trying to spin these perceptions one way or another, without regard for short-term costs. The recent Gox "seizure" might (or might not) have been intended to trigger high volatility for geopolitical reasons and the stable, slow gain run since then could conceivably be some entity's geopolitical counter-move.
Without lapsing into paranoia, it's worth remembering that most analytical tools were devised for systems that may be quite different from the BTC ecosystem. A map of the wrong terrain may be worse than no map at all.
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I agree to a certain point.
In trading uncertainty equals risk, and risk in general is what investors try to minimize.
The higher the volatility, the higher the uncertainty or risk.
Longer periods of stability (lower volatility), reduce the amount of uncertainty, therefore that longer periods of stability, will more often result in a price gain than a price drop.
Especially longer periods of stability after a bubble crash, since these define a new floor.
As article the also stated, most of the investors who are more likely to sell, will already have done so.
The hidden assumption in this arguement is that past price history implies a future result. I don't believe that will always be true.
Another way to write what you wrote is there are two scenarios...
Low volatility -> price increases, then...
High volatility -> price could go either way...
If we know that level price is generally going to increase the price, then someone can profit from that; therfore the market will adjust accordingly (assuming it's efficient, which it's probably not).
Also, you assume investors generally want to avoid risk... another generalization. And if the investors only look at past trends for "riskiness," then they are already doomed to follow a simplified thought process and the masses into the poor house.
In trading uncertainty equals risk, and risk in general is what investors try to minimize.
The higher the volatility, the higher the uncertainty or risk.
Longer periods of stability (lower volatility), reduce the amount of uncertainty, therefore that longer periods of stability, will more often result in a price gain than a price drop.
Especially longer periods of stability after a bubble crash, since these define a new floor.
As article the also stated, most of the investors who are more likely to sell, will already have done so.
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These consolidations help establish a foundation and confidence around a given price and burn off resistance sellers.
The hidden assumption in this arguement is that past price history implies a future result. I don't believe that will always be true.
Another way to write what you wrote is there are two scenarios...
Low volatility -> price increases, then...
High volatility -> price could go either way...
If we know that level price is generally going to increase the price, then someone can profit from that; therfore the market will adjust accordingly (assuming it's efficient, which it's probably not).
Also, you assume investors generally want to avoid risk... another generalization. And if the investors only look at past trends for "riskiness," then they are already doomed to follow a simplified thought process and the masses into the poor house.
Quote
Markets frequently see periods of low volatility and consolidation around a price level before making large moves higher.
Fixed that for the author. Markets are just as likely to break out negatively after low volatility and consolidation as they are to break out higher. I am bullish on Bitcoin long term but these kind of claims are just garbage.
I agree that both outcomes are likely - so perhaps the best way to put it is - "Low volatility periods end in higher volatility periods."
I certainly know that from trading BTC, I can tell you. Although I will know which way it will break out due to my proprietary studies
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Markets frequently see periods of low volatility and consolidation around a price level before making large moves higher.
Fixed that for the author. Markets are just as likely to break out negatively after low volatility and consolidation as they are to break out higher. I am bullish on Bitcoin long term but these kind of claims are just garbage.
Agree, pure speculation
Quote
Markets frequently see periods of low volatility and consolidation around a price level before making large moves higher.
Fixed that for the author. Markets are just as likely to break out negatively after low volatility and consolidation as they are to break out higher. I am bullish on Bitcoin long term but these kind of claims are just garbage.
While I praise the development of dedicated bitcoin news sites; we need to make a collective decision about whether we are just going to regurgitate everything here in the Press section. Perhaps it's best If we only post CoinDesk/GenesisBlock stuff when they have an actual news scoop? I'm open to debate. What do people think?
I dislike journalistic fluff as much as the next person but sometimes it's useful to know that "the news is that there is no news but we still have to publish". My instinct is that it is not worth policing. Read what we want, and ignore the rest. If we get bored, use it to practice critical thinking: Why did they write this piece? Whose interests does it serve? What do they want me to think? Do I actually think that? Why (not)?...
While I praise the development of dedicated bitcoin news sites; we need to make a collective decision about whether we are just going to regurgitate everything here in the Press section. Perhaps it's best If we only post CoinDesk/GenesisBlock stuff when they have an actual news scoop? I'm open to debate. What do people think?
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