Topic: Can inflation, geopolitical events, or a country in crisis be beneficial at all? (Read 129 times)

Most cryptocurrency traders take their cues from others and trade off the technicals, using indicators like the MACD, RSI, and moving averages as their sole reason for taking the trade, not realising these momentum indicators are all just different ways of confirming the same thing.

The 5% use technicals when trading only over the short term timeframes, or as a trigger for entry into a position they expect to hold for a longer period.

Entering into a long term hold and building a campaign works best when background conditions are favorable. In the commodity markets, one method used as a short cut to confirming favorable conditions is backwardation and contango.

Usually, a commodity will be more expensive the further out in time the expiry date. This is called contango. Sometimes, when the supply of a commodity is expected to become bottlenecked, the prices of the near term contracts start trading at higher prices than the longer-dated contracts. This state is called backwardation, and when a market transitions from contango into backwardation, the market move, if it starts, has a higher likelihood of being for real.

Commodity markets also have open interest, as well as volume, to help evaluate the underlying conditions.

Contango, backwardation, and open interest are direct market feedback indicators generated internally by the underlying supply and demand, but sometimes the causes of favorable conditions aren’t market generated; they are exogenous to the market but affect the supply and demand.

While the social media buzz is talking up Bitcoin and the top alt-coins, causing the 95% sitting on the fence to throw in the towel and enter, the 5% study geopolitics and other external variables that could act as a long term favorable condition for their trading ideas.

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