The trouble with technical analysis is that it can only partially work, as a hint to try to understand market sentiment.
If it consistently worked reliably, the markets wouldn't move at all, as everybody would know the tops and the bottoms. It's the same as the uncertainty principle, schrodinger's cat, et al... if it worked, it would have the result of not working.
As such, TA can only give some traders a slight edge -- not much more. And this is in a highly liquid stock market. So, dial down the TA love will you?
The key here is two-fold: (a) you have to get your fundamental analysis right BEFORE you try TA; and (b) you have to recognise what state the market is in.
For (a), I chimed in my thoughts earlier in the thread. I think you really missed the boat on doing a proper analysis of the fundamentals. This makes the TA worthless.
For (b), BTC is a currency, and as such will have a well-defined non-zero floor unless it fails. This floor could be well above where we are now. Yes, the market will be subject to waves of investor confidence, just like any other market. But you have to identify whether this market is still in the bootstrapping phase, or if it is in a steady state. I think you missed the boat here too. You used increasing money flow as indicators to bet against the price. Doesn't make sense for a currency. Do normal people "over-extend" themselves in fiat? Doesn't make a lot of sense. Even if you speculate in, say, Yen -- you're not going to end up with a worthless pile at the end, like you would do with stocks.
Yes, adoption is broadening but I don't construe that as "getting scary" -- the newcomers look to me like Redditors and other reasonably tech-savvy people. There is still a huge sector of the population who we have yet to bring on board. The broader base and the speculation itself really helps drive adoption of BTC as a currency; I see it as a positive feedback loop.
I agree with some of what you're saying (fundamentals are key, use TA to enter trade after you nail down the fundamentals, etc). But also remember that there is an entire multi-billion$ industry of systematic trading programs that are strictly technical and do not use fundamentals at all. Actually, it's a trillion+ dollar industry. But yes, that couldn't apply to the nascent BTC at this stage.
a) Fundamental analysis with BTC is murky. Unlike a stock or currency, where one has quarterly reports to assess product adoption (which are fairly predictable) or Fed meetings to assess monetary policy, one can only make shots in the dark at exactly how BTC will be adopted by the average person and how these new users (or potential of new users) affects BTC price. There will always be a disconnect....it's difficult to determine how Google hits, new MT Gox accounts, new BTC users, Cyprus, etc, affects the price of BTC (because of its nature) other than to make an educated guess that BTC will likely go up, probably not go down over the next couple of weeks. But one also has to factor what will happen if BTC is over-extended because speculation has pushed us too high, too fast, especially vis-à-vis actual adoption....
BTC at 40 - 75 was very obvious. BTC at 75-100, less obvious yet quite possible approaching the end of this month. So, in the sense that BTC has difficult fundamentals, the only constant is TA. ATC777 was simply offering a potential scenario......it didn't happen this time for fundamental reasons but at some point it will probably play out exactly as he described.
b) BTC is becoming a currency and USD/BTC is a currency pair. Normal people over-extend themselves if they trade currencies via FOREX, which is Mt Gox w/optional leverage). Yes, currency pairs get over-extended all the time:
http://www.nasdaq.com/article/forex-flash-eurusd-somewhat-overextended-now-tds-cm229644 .
I agree, this is probably not 'getting scary' but one never knows when it is getting scary until after the fact so one plays out different scenarios. The statements below are frightening.
"Its a currecny, its not a investment vehicle per se"
"Rather btc is a reorganisation of society."
"A side effect is you wealth may be accrued who ascribe to this new paradgm sooner"
Arrogance can be frightening as well. Everyone is acting like the success of BTC is a foregone conclusion and it's not.....there is more risk and potential reward in BTC than just about anything else. I've never met a successful trader or money manager who is arrogant, and I know managers that dwarf the market cap of BTC (not saying much in fund world) several times over. I am no expert, but I know enough not to be so arrogant. The most dangerous time for BTC is now -- when Joe Consumer is just now hearing about Bitcoin. The tech savvy partipants were the easy sell. If Joe Consumer isn't sold, BTC will have major issues.......
