[2017-09-15] Forget $3,000, Bulls May Retreat If Bitcoin Breaks $2,877

[Eric Cartman]

Bitcoin’s more-than 20 percent slump this week on China’s reported plans to shut down cryptocurrency exchange trading has investors speculating when it will drop below the key psychological level of $3,000. But the level to watch may be just beyond that threshold: $2,877. Not only is that bitcoin’s intraday high on Aug. 4 -- about the time the digital currency’s most recent leg up began -- it’s also bitcoin’s current 100-day moving average. For Chris Weston, IG Ltd.’s chief market strategist in Melbourne, $2,877 is a “key line in the sand” and “the bulls will want to see this hold,” he said.

https://www.bloomberg.com/news/articles/2017-09-15/forget-3-000-the-bulls-may-have-lost-if-bitcoin-breaks-2-877

[Carlton Banks]

Yeah.

The thing about moving averages is....

....wait for it....
 

.......they move. Wait just one more day, and the 2877 figure becomes a different number (although I bet 2877 is gonna be the only number on every price shills lips for the next few days)


And what's more.... they're arbitrary. There's no reason at all to use a 50 day MA than there is to use a 30 day MA, there's nothing technical or scientific about either figure (except that shorter averages are arguably more appropriate for something as volatile as Bitcoin, but meh it's still not very meaningful).


There's one reason, and one alone, why anyone is making a big deal out of this: those saying this are trying to create a "magic number" psychology amongst novice investors. As if there's somehow some massive statistical consequence of crossing the magic line.

The magic only works because: the foolish believe it.