Bitcoin Forum

some time ago I bought an altcoin which has a low marketcap and trading volume. I bought after analyzing using technical indicators. After a while I realized something was wrong. it should be if based on my analysis the coin I bought has entered an oversold period and the price should have started to reverse. but in fact it never happened. the price may go up, but it doesn't last long and it goes back down. then I also bought another altcoin which is almost the same. and again, I also experienced the same thing even though in the end I got profit thanks to long-term hold.

Then I started thinking and wondering, why is it difficult to apply technical analysis to coins with low market caps. unlike bitcoin and other major altcoins whose movements are still predictable. Altcoins with low market caps are difficult and even impossible to predict. whether this is all related to manipulation or there are other reasons that make it difficult to predict.

How low is low? You didn't name the altcoin and the market cap. Also, you better move this thread to the Trading Discussions board, I believe you will have a more insightful opinion on there.

Anyway, since I didn't know how low the market cap is nor the knowledge of technical analysis, IMO, it's worth the attention to inspecting the fundamental analysis on low market cap coin, it's way better if you want to risk your funds on a barely known--since its has low cap and volume--cryptocurrency.

not too low, more or less a coin with a marketcap of $100M and a trading volume of $10M. one of them Banana(apeswap) #368 on coinmarketcap. I made an analysis for this coin a few weeks ago. At that time I saw the price had reached the resistance point, and I bought it. but so far the price has not gone up.

TA will not work all the time, infact if you apply different indicator you will also get different results compared to your previous analysis so  understand that price not only move based on market movements it depends on different factors like news, manipulation,etc.

Sometimes things don't work as intended to be, But who knows it will be bounce-back soon just stay focused and have extra patience because cryptocurrency investment needs a lot of patience, Anyway I think ApeSwap Dex was working well and their banana token price is also stable, so just wait and hold otherwise if you are tired of doing it there's a lot of prospect in the market especially in the low Marketcap rank.  

In my opinion, altcoins with low market cap are difficult to analyze because the market is very easy to manipulate. someone buys it not because the price is in the support area, but anytime they are able to play with the price, on the other hand because there are still few investors in it, so the trading volume is still low, so trading seems unhealthy without being interfered with by various points of view from many traders

The answer to this question is rather simple. We can use Technical analysis when we work with mainstream currencies or any assets that are popular and wide-spread as there are many traders around the world who see the same patterns and indicators and take the same steps, as a result, the market adjust to their actions and change the trend. But there is a low liquidity in low market cap coins, so nobody pump or dump price according to TA. 

It's quite simple. Altcoins with low marketcap are difficult to predict because it requires a low volume to manipulate it.
Also the price swings that you encountered may also be because of the recent hike in bitcoin's price.
Many altcoins which were dropping in price suddenly increased in price when paired with USDT because the price of bitcoin increased a lot recently.

Technical Analysis won't work to small caps coin because it has a limited volume that prone to high price impact if you bought a certain amount and also only few trading it. TA works as self fulfilling prophecy so if no one doing TA on it obviously all signal you can get on your own TA will not gonna reflect to others thought that's why there is no reason for a price pump base on signal you get.

Remember that TA is just a method to interpret what will be the possible price outcome in the future by using past data but it doesn't it was accurate at all time especially if the price is volatile due to lack of liquidity. TA is impossible for that.

First of all, we know cryptocurrency prices depend on supply and demand. A low market cap means there is no demand for that coin and there is enough circulation as well. So the technical analysis would fail to predict accurately. I believe no predictions are accurate, a few predictions become true and few become false. The analysis wouldn't help if market demand isn't predictable which is quite impossible for low market cap coins. So I think that is the reason why low market cap and low volume coin wouldn't follow TA.

You will not be able to predict it as it has low volume as well. The altcoins with low marketcap will not have big daily trade volume. that means the market can be easily manipulated. The whales were also playing on these low cap coins as well. It can be easily dumped or pumped anytime. Your TA will be worthless. Im sure about this.

That's related to the manipulation that happened in the altcoins. that's the main reason why TA will be so difficult to be applied in small cap coins. You can't predict altcoins that can be pumped or dumped in less than one minute. The movement was random. It can't be predicted easily.

If demand is low, no indicators and other instruments of technical analysis will work. Even if this coin is oversold and it is still unpopular and there are no investors who are willing to buy, it will stagnate. You had better pay attention to the project itself and marketing campaign (advertisement and news) rather than to technical indicators in terms of low market cap coins.

It's not like, every TA will be right as few trades won't be successful according to our TA, even for top altcoins. But it's also right that altcoisn with low marketcap are quite difficult to predict rather than top altcoins as whales can manipulate those and small traders got rekt for that. So most of the time, it's happened because of the manipulation from whales as well as few P&D groups also do the manipulation.

when talking about TA, I think this is something that is only used as an aid, not a reference, because apart from that, all TA is just various formulas that are applied to convince us to speculate, as for the reality it can be right and it can be wrong.
I think you are quite good at doing something because by analyzing something based on the observations you see, but indeed the reality is that it is back again, speculation is 50-50 about this, it is the market that decides.

TA doesn't really work at most times. We're just humans that can analyze charts and projects but there will be times that we're not really accurate at all.
It's hard to depict these low cap altcoins because they are low cap and there's not that much to expect from them. But on the other hand, there are altcoins that are really good despite being low cap and if seen with potential, the cap increases.

Maybe because it was the low marketcap that TA can't be applied to it, the data is so small that you can't get any from plotting and applying analysis.

This was the case on bitcoin in the beginning, very difficult to predict using TA because there is no data to begin with. And just to add though, maybe whales are manipulating the price as well, the pump and dump scheme which is very known for an altcoin that has low marketcap.

The primary factor we need to consider before getting into technical analysis of any asset must be, healthy volume. Because only if a coin is having good volume then we can sure about less manipulation. I mean if a coin is having very low volume on daily basis then it must be a candidate for high manipulation from its devs or from any whales. So, it is highly recommended not to consider all low volume coins because any kind of technical analysis will NOT be working against manipulations.

There should be multiple things we need to consider before choosing an asset for trading through technical analysis. If you are buying signal some third-party and trading one asset could be something different but when we are spending time and efforts for technical analysis then we should choose a right coin which is free from all kind of manipulations.

TA works on everything, so I don't see any connection of the market capital where you can easily plot the indicator and use it for your investment decisions. TA might not be reliable most of the time but for me it works you just have to use the perfect combinations to become more successful in trading because if you do TA you don't focus much on fundamentals but more on a price trend.

the answer is the following:

when the price of bitcoin goes up the price of altcoin against bitcoin goes down

1 - in this scenario you always need to do technical analysis of altcoins in relation to bitcoin using the 4H chart, if you use the 1h or 15 minute chart they can mislead you,

2 - always hope that bitcoin is not too volatile preferably bitcoin price needs to be stagnant

with these two requirements you can do your analysis well

Not surprising.Why? TA's doesnt basically works all the time and going back into those years 2014-2016 then reading up and putting good analysis doesnt really bite out no matter
how well you had made it out which basically shows that TA's arent really that effective not like now that It is gradually trying to move in similar manner but still
its unpredictable due to some factors and that what makes it more harder.

To tell about low cap coins? They would basically be having that much liquidity or price movement if you do ask me.Better get used to it i would say.

^ This is what exactly the truth is, TA will not work all the time and TA is possible to work in a coin that has a low market cap because it is very easy to manipulate, so having TA on this is not perfectly working. I would rather choose the FA on the low market cap coin because the most fundamental analysis has an accurate result especially if the low market altcoin was on the hype. Traders should be careful always because this low market coin will most likely a favorite of the pump and dump people and will gain too much when they had a lot of followers.

I thought you were talking about extremely low cap tokens or coins. Those numbers are pretty decent but probably not on a bull market. What was your time frame by the way? Perhaps TA could work on them if you zoom out a bit. I've seen some people do that even on micro caps.

Low market Cap Altcoins are mainly for long term investment, not tradeable because they always defies any form of TA, that is why I trade with the first 20 coins on coinmarketcap using TA and some indicators atleast these coins has a higher daily volume traded and huge market Cap thus I traded them using chart patterns after series of analysis based on TA thus I never bothered trading with low market Cap Altcoins who are mainly pump and dump coins and prone to manipulations.

It certainly won't work as your might buy coins that have a low market cap and are worthless. Even you buy them all, you can never expect that there is a profit that it get you back. Honestly, you've got the wrong coins to invest. If you have money, better to look at potential altcoins and it makes sense, though.

You don't need to wonder as TA cannot be 100% working even in Bitcoin, as you have thought of. I don't have a figure actually but based on my experience that is something 70-80% working on me. Of course, that also matters on the trend and the coins of your chossen.

It's because altcoins that you consider having a low market cap are prone to manipulations.

And besides, reading charts don't tell you what exactly you need to do. It's showing you instead the current happenings on a certain coin.

In trading altcoins, it's been proven and effective to rely on guts compare to technical analysis.

It's not went the way you like that's why you think TA can't apply on low market cap coins.

Just continue using TA and apply it on your future decision. Once you are now using it, you can ask yourself again if it's really difficult to apply technical analysis on some altcoins.

Experience will teach you to use it.

So you mean to say that bitcoin and any other major altcoins are easy to predict? I think you end up thinking like that because you don't have a good run analyzing the altcoin's behavior. After all, it's just common not to predict easily the movements of some low cap market cap coins since they don't have a decent trading volume in the first place so what do you expect?

And besides, 90% of traders I believed are trading with their instinct and TA are secondary and will just act as a reference.

Anyways, what coins are you referring to that can consider having a low market capitalization?

Technical analysis is not hard to those traders who understand it, but for the people who don't know how to get the catch, it will surely hard too for them to get it. But the only thing I can suggest to you is always start with the basic in trading then you will not going to notice that while the time is passing by little by little you will understand what TA analysis.

It's true, altcoins with low market cap are very easy to be manipulated by one or a few whales, it causes technical analysis to not apply to altcoins with low market cap.
Technical analysis can be applied to coins whose fundamentals are already good.

You can pick some low cap coins from the market and then try to make a comparison between the chart of those coins and you will be seeing the differences. There are lots of factors that were affecting it. Some people have been mentioning the correct factors like

- supply
- demand

You must remember that if it's not only caused by that. When the coin has no liquidity in the market and it will create a huge spread between buy and sell orders. that means this will make the price of coin will be very volatile compared with the major coins that have low gap of slippage. It will also affecting the result of your prediction in small marketcap coins. Manipulation was making the market becomes more volatile. it can also be driven by external factors like the news that come from the big parties.
Someone with big chunks of coin can make the bullish trend to turn into the bearish trend instantly. TA was not working on the small cap altcoins. it lack of liquidity and it was affecting the stability of the trend.

In my opinion, The general analysis commonly used in the money market world is usually easier to see BTC and ETH, because the reference is only to BTC and ETH if those 2 go up, other coins also go up and one more thing the crypto driving factor is not only fundamental but the determinant of price increases mainly because there is demand/daily transactions for these coins/tokens not only because of fundamentals.

I'm not a TA believer in general (and you should know that it's considered scientifically dubious), but if TA works for you with big coins, why not profit from them instead of bothering with low marketcap ones? As for potential reasons why unpopular coins are less predictable, I think it's largely due to a high risk of the price being manipulated by big players. Trying to manipulate the price of a coin with huge marketcap and trading volume requires immense resources that almost nobody possesses. But playing a pump and dump game with a coin that's barely traded is a different story.

The whales can play pump and dump as they want, making the analysis may not work. Maybe you can follow where the price goes. For example, if the price is down, you buy. And if the price is up, you sell. But there is no guarantee when the price will move or the sign for the coin to increase or decrease. That makes the analysis hardly to apply and maybe you can only use your feeling based on the coin situation, which will be too difficult to guess the movement.

most of it is due to market manipulation. Low market cap is very vulnerable to manipulation, therefore TA cannot be expected for such a coin. the only way to make an analysis for a coin with a low market cap is to look at its fundamentals. this method is better and proved to be more accurate. Broadly speaking, when there is a positive update, the price will go up. if you follow this, you will find it easier to analyze.

In my opinion, altcoins with low market cap are difficult to analyze because the market is very easy to manipulate. someone buys it not because the price is in the support area, but anytime they are able to play with the price, on the other hand because there are still few investors in it, so the trading volume is still low, so trading seems unhealthy without being interfered with by various points of view from many traders.

Not everything that happens because of manipulation in my opinion. Altcoin price movements so far are very difficult to predict.
Unlike the market conditions in 2017, almost all Altcoins move simultaneously with the movement of Bitcoin. But for now, when Bitcoin movement is increasing, only a few Altcoins are experiencing an increase.

Low marketcap coins and listing on the small exchanges, Most of the time it seems risky investment because low trading volume coins will gradually low if they've no interested buyers and hold to long term. And if team haven’t enough fund to listing bigger exchanges than investors will go leave.

Simplest reason is already given, it is basically just a situation where you end up with not enough data to back that up with TA. Things about the current situation is that if you have liquidity so low would mean that there is a good chance you could literally just fail to get enough data to pick it up and find the right chart direction.

The low liquidity means that you could literally have one rich person that end up with changing the whole system and then something that looks like it will go up could end up going up just because one rich person could end up selling, or it could look like it will go down but one rich person could end up increasing the price by buying it. This is not really possible with the high cap coins because they have a lot of volume which means you are not going to end up with a drop or increase just because of one rich person buying or selling.

Well, altcoins with a low market cap, like you said, are prone to manipulation. But, I don’t think that would be why your technical analysis is not working on them, because it’s not every time that the market is being manipulated. So, the analysis simply didn’t work, maybe it wasn’t accurate. You’re forgetting that an analysis doesn’t have a 100% chance at predicting what the market would turn out to be.

It’s mostly thing of chance, it goes two ways. But if you think that low market caps are not working out for you, then you should just go with coins that has huge market cap, so that you wouldn’t have to keep losing your money. Although investing in coins with bigger market cap doesn’t come with any less risk, there is still the same risk involved.

Project with lower marketcap can be manipulated by anyone. This doesn’t need a huge amount of fund even. With $50k-$100k, anyone can pump the price or even dump the coin price. So, you can't apply TA there of course.

The reason being that most altcoins are short term/pump and dump projects that can pump and dump spontaneously, most Investors do no research when they want to invest in some altcoins, they just buy when it's low and hope on luck for an appreciation in price so they can make profits. The reason why its movement is unpredictable, is the same reason why it is regarded as being very risky. Having said that, many of such altcoins can be manipulated quite easily, that's cause sometimes an individual could own more then 50% of the coin, and whenever such person dumps, that's the end of such project. But that is not the case with Bitcoin, it is a long term project with a very valid use case and a demand that will continue to grow, that is why if you're not making profits on the Bitcoin network the time you invested, you're advised to hodl, as more often than not, you'll make profits along the long run.

You gave the answer yourself, if you take the time to study TA, whether this is by using books, articles on the internet, YouTube videos or a mentor, you will get the same information, TA does not work on markets with a low volume, and why is that? Because TA is based entirely on what happened on the market already and making conclusions about it, however when the market cap is low a whale or pump and dump groups can manipulate the coin easily and until this happens it is impossible to predict it with TA, so if you are still interested in trading those coins I will recommend fundamental analysis instead.

Not just on altcoins with low marketcap, but just everything in general.

TA is notoriously unreliable because of the fact that most markets are efficient and therefore there is no reliable way of making sure that patterns repeat themselves.

If you want to do analysis on a coin, I much prefer fundamental analysis as that actually involves the evaluation of the underlying blockchain technology.

This, TA can be a very effective tool but it needs to be used on markets with enough volume otherwise it is not going to work at all, markets with low market caps and volume are too susceptible to manipulation, and whales will take advantage of it, we may think it is unfair but that is just the way things are and we need to accept it and adapt to it, and one of the ways in which this can be done is by not using TA on those markets and use fundamental analysis instead.