Topic: Is technical analysis negatively affecting cryptocurrencies? - page 5. (Read 1339 times)

Me too, and I've said as much in other threads as well.  TA has always struck me as some kind of financial voodoo science, with people staring at past prices and trying to predict the future.  All the weird terminology TA people use doesn't help, either.  Some of it is just straight-up bizarre.

As far as TA's effect on the market, I don't think there really is any.  Speculation is speculation, and it doesn't matter if speculators are analyzing charts or not.  It's the combined buying and selling of everyone in the market that moves prices.

I would agree with this if you were talking about the stock market, where the businesses underlying the stocks actually have a fundamental value that can be analyzed.  The problem in crypto is that there's no way to tell what the "fundamental value" is for any given coin.  Coins have no earnings, they don't pay dividends, and ultimately there's no business behind any of them that lends itself to traditional FA. 

It's actually not surprising that we see so many TA folks around here, because there's not much else to do besides look at charts--but I'm still of the opinion that doing so is basically useless.

absolutely right because there are so many news that can change crypto like the price, so most of the bad news that comes in, the faster the market will decrease

Speculation overall seems to be affecting cryptocurrencies if the general goal is to use them as an effective currency, since volatility will always be present with or without TA methods as long as even the slightest speculative techniques are applied in crypto to profit. It doesn't hurt the cryptos in any way but rather, help them gain exposure and traction for whatever purpose they may be best at. As a currency though, I don't see any crypto that can be as excellent as fiat in retaining its value and minimizing volatility in price. All cryptos are subject to TA and speculation, so yeah, rant all we want but we can't remove that fact from all cryptos around.

It seems that your complaint is more about speculation causing volatility than against TA itself. I agree that speculation and volatility are problems, but I take a long term view. I use Bitcoin now as much as I can, regardless of the price, and I will continue to do so in the future. All of these price fluctuations are ultimately just minor bumps in the road in the face of a long term adoption juggernaut. I am not concerned.

BTW, I agree. TA is nothing more than astrology for traders.

Yes, sometimes Technical Analysis doesn't work on crypto because news and manipulation always do something about the price of crypto.

I have to say upfront that I'm no fan of technical analysis, even in traditional asset markets. There are 2 main reasons for this:
1) There is no scientific proof that technical analysis works at all. The only correlation between technical analysis and true market movements is that it is widely believed. And this leads to the next point
2) TA is a self-fulfilling prophecy. If people stopped believing in it, it would stop working right away. If people find new patterns they only start actually working once they get enough traction for other people to believe in them.

This is somewhat of a problem in traditional assets, but it is just a minor nuisance. The fundamental values of traditional assets always strike back, no matter what TA says. Found resistance? Doesn't matter if the underlying value shoots way up due to increasing sales, usage or whatever. Glad a value has some support? Doesn't matter if sales drop to near-zero, the price does not care about support.

At cryptocurrencies, however, those fundamental values don't work as there are rarely any. Most companies behind cryptocurrencies either have no product that is close to justifying their volume and value. Some of them (Bitcoin amongst them) do not even want to have one. Therefore they are subject to constant influence by those religiously believing in TA, which makes them an object of pure speculation. The fundamental values are "news", no matter the level of reliance.

In my opinion, this holds cryptocurrencies from being a usable and reliable method for everyday transaction use.

What is your view on this?