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I agree with everything you say and there certainly are specific dynamics in the bitcoin market which can throw off the scale many a technical indicator, but still the people trading it have , in average, the same psychological framework as the people active, say, in the Forex market or the stock market. Actually, I dare say, the bitcoin market seem to have attracted large numbers of new and rather inexperienced traders that fall easily prey of the professionals that, make no mistake, are plying this market too. It is enough to look at 5 minutes charts and the order book to see the so called "whales" gobbling up and down the plancton as they please.
O.k. But does the fact that there are a lot of newbies who are being taken advantage of change any analysis.
I will concede that there are likely way fucking more newbies in the crypto space as compared with traditional markets (in part because traditional markets are way harder to get into and more fees).
So, yeah, we have the cryptospace and we have bitcoin; hopefully we are not conflating those two concepts, but in either event I will concede way more newbies as compared with traditional markets.... even if you might separate out a tiny bit more experience in the bitcoin space as compared with the cryptospace overall.
The technology behind bitcoin maybe new, but the mindset of people trading it seems to be the usual on and for this reason it seems to me - and this is just my humble opinion, as I do not presume to the express the truth - that certain technical analysis tools like Fibonacci retracements and Elliot waves do have some predictive power, until of course they are proven wrong because the first rule of any trader should be always to act upon othe price & volume action in front of his eyes rather than the theories (about what price & volume should do) in holds in his mind.
Yes. We certainly agree on this part.
At the risk of attracting some criticism, I say also that many of the traders seem to couple their inexperience with an equal amount of arrogance, which expresses itself in the form of a refusal to apply to bitcoins trading the tools of conventional technical analysis.
Don't try to act as if you are the first person coming to this space and applying TA. There are all kinds of attempts at TA, and I am not discounting TA in its entirety, that's for sure. So yeah, some people use technical, and some people couch it with appropriate grains of salt, including considering exponential s-curve factors, metcalfe principles and the level of maturity of bitcoin as compared to various other markets... accounting for fundamentals and ta.
It is absolutely true that TA tools do not work all the time nor on all assets, but this is true not only for bitcoins but also for other traditional financiall assets. Again it is true that certain TA tools are extrapolations of past price action with scarce predictive power in a market so young and exuberant as the bitcoins. This said, having some kind of tool - that you can fully customize according to your own assumptions - to analyse and dissect the price & volume action to try and make sense of it, is in my opinion better than having none and relying on hearsay or pump & dump speculations.
If you conclude that I am criticizing you for employing TA, then you are getting me wrong.
I was likely criticizing you for the level of certitude of your language asserting that we are dropping to $3k-ish and your seeming failure/refusal to account for s-curve adoption, metcalfe principles and immaturity of bitcoin's market. If you were accounting for those factors, then I misread you... but you seem to be doubling down here to suggest that I was criticizing the employment of TA, which is not the case.
To conclude, based on Fibonacci and Elliot, I think BTC is undergoing a correction within an uptrend, that will resume once the correction is done. I think this correction will reach down to about 3800 USD as a minimum and 2800 USD as a maximum and extend itself over 3-10 trading days depending on how deep it will reach. A break over 4670 USD in strong volumes would invalidate my hypothesis.
That is a fairly reasonable way of rephrasing your proposition, and I have no real problems with that - even if I might assign differing probabilities and even have slightly different targets.
I do not recommend to sell BTC short , unless the exchange you are using guarantees you very swift trade executions, because the drop could stop and reverse very quickly due to any number of reasons because, as I said, the underlying trend is upwards.
I personally do not employ shorting practices - and shorting in a bull market seems to have worse odds.
Do you concede that we appear to be in a bull market and there is a pretty decent likelihood that we will continue in a bull market, in spite of possible shorter term corrections.
Actually, even currently, it is seeming like it could be difficult to break below $4k, so even reaching your upper side of a low of $3800 could be a bit of a struggle.. but surely not impossible... I am currently thinking that maybe 40% odds of reaching down to $3800... even though if we break below $4100 then the odds of going to $3800 become greater and may even become closer to 50/50 at that point, if we were to reach it.. but we have to reach it, first, no?
If you want to own BTC, buy at regular intervals on the way down. If you own BTC, sell some of it at present levels and rebuy the same quantity at lower levels on the way down.
You are preaching to the choir there. I completely agree with buying on the way down and selling small amounts on the way up however, the proportion of your buys and sells will likely depend on your personal goals, timeline, longterm and short term goals and your finances and even whether you perceive yourself to already be established into bitcoin or if you feel that you are establishing a position (by accumulating BTC). So how much you sell or buy is not set in stone and is not even set in stone for individuals whose views and goals might change on an ongoing basis.
Hopefully, the trading practices of people are not changing too radically in short periods of time, but whatever. those are individual matters and some folks are more able to establish stability in their lives and in their finances than others. I personally view finances pretty conservatively; however, even I have to reassess my own perspective and some of my risk taking and even some of my proclivities to throw around money which have become a bit more loose in recent times, given the extreme exponential and somewhat unexpected upward performance of my own situation - causing me to have way more richness at least on paper and even in more concretely in some of my recent incidental and systematic cashing out than I had even thought was going to take place.
This is what I am going to do and, of course, I might be wrong and I will pay the price of errors
Of course, you can do what you want, and I personally don't bet too heavily in any direction - I play in a kind of incrementalist methodology that has been extremely profitable, and sure it is possible that there are ways that I could have made way more money, but incrementalism seems to work pretty well, including NOT betting too much at any one time regarding whether one direction is more likely than another (except maybe some tweaking, here and there, on the edges).
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