From the book I am reading now about automate trading systems ... maybe can be applied to bitcoin market too ...but was made from forex, stocks, futures perspective ...
"The leverage in the market yields a locally unstable system because individuals have finite capital and are playing the game so as to survive
the next round.This instability is increased by the asymmetry between game-theoretic behaviors of accumulation and divestment of risky positions. When you accumulate a position you have all the incentive in the world to tell all your friends, and it is a self-fulfilling virtuous circle
as people push prices in “your” direction, thus increasing your profit. This is the epitome of a cooperative game. On the other hand, when you
divest, you have no incentive to tell anyone as they may exit before you, pushing prices away from you. This is a classic Prisoner’s Dilemma game
where it is rational to defect, as it is not seen as a repeated game. This is why we observe a great deal of asymmetry between up and down
moves in prices of most assets, as well as price breakouts and violent trend reversals."
"The leverage in the market yields a locally unstable system because individuals have finite capital and are playing the game so as to survive
the next round.This instability is increased by the asymmetry between game-theoretic behaviors of accumulation and divestment of risky positions. When you accumulate a position you have all the incentive in the world to tell all your friends, and it is a self-fulfilling virtuous circle
as people push prices in “your” direction, thus increasing your profit. This is the epitome of a cooperative game. On the other hand, when you
divest, you have no incentive to tell anyone as they may exit before you, pushing prices away from you. This is a classic Prisoner’s Dilemma game
where it is rational to defect, as it is not seen as a repeated game. This is why we observe a great deal of asymmetry between up and down
moves in prices of most assets, as well as price breakouts and violent trend reversals."
This is what a lot of TA traders believe in. In TA language; the price of BTC today is signal of descending triangle breakdown. Bearish pattern
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:descending_triangle_
