Is there any comparison between other markets and the crypto market?

[Gabb]

At least according to what I have observed, the crypto market seems to behave in an absolutely abnormal way compared to institutional markets such as the stock market or the forex market. And that is why it is so difficult to predict with a certain degree of certainty the future performance of cryptocurrencies.

Especially I have noticed the great susceptibility of the crypto market to overreaction in the face of the rumors that continually spread in cryptospace, which denotes the high degree of immaturity of this market, so dependent on the emotional aspect of investors.

And that is why, undoubtedly, any attempt to use the old indicators of technical and fundamental analysis seem absolutely useless when analyzing the crypto market.

[squatter]

At least according to what I have observed, the crypto market seems to behave in an absolutely abnormal way compared to institutional markets such as the stock market or the forex market. And that is why it is so difficult to predict with a certain degree of certainty the future performance of cryptocurrencies.

I think the stock and forex markets move so much differently from cryptocurrency because they have much more liquidity -- less volatility -- and because of the nature of fundamental analysis. The effect of BLS nonfarm payroll statistics on the forex markets, or earning reports on individual stock prices, can be profound though often times predictable. In the Bitcoin market, we constantly speculate about "whales" and regulator decisions and metrics of adoption that are really hard to quantify, and that's in the context of low market liquidity. The altcoin markets are even more intense; riches are often made and lost based on utter speculation around vaporware.

If I were to draw comparisons, I think the markets most comparable to cryptocurrency are decentralized assets with elastic supply and demand. Things like precious metals and crude oil. These are highly emotional and volatile markets.

And that is why, undoubtedly, any attempt to use the old indicators of technical and fundamental analysis seem absolutely useless when analyzing the crypto market.

I'm on the fence about this. I follow some consistently successful traders who live by TA. Fundamentals are really hard to quantify, though.

[jseverson]

Some people have observed a correlation:

Not surprisingly, Morgan Stanley’s analysis showed that the correlation between bitcoin price and equity markets during the last 14 months was 0.4. (A correlation of 1 implies synchronicity in price movements). Datatrek’s research also came up with similar conclusions. The firm wrote that the correlation “seems to rise when US stocks falter and disconnects when equities rise”.

One Forbes author suggests the reason behind the correlation is because Bitcoin is now part of the "carry trade", and it seems plenty of people have other theories. It could all be coincidental though, which is where my money is at until we actually get a sustained, long-term trend.

[pooya87]

i wouldn't call the behavior of cryptocurrency market as "abnormal" it is actually perfectly normal but only in a bigger and exaggerated way because of the small size of the market.

for example when it comes to altcoins, they are behaving perfectly normal but their normal is a manipulated market where they get pumped and dumped. in other words you have to figure out what the market truly is first then try to figure out what the normal behavior of that market is. in case of altcoins the normal behavior is what we see, a big pump followed by a big dump then moving on to another coin to do the same.

as for bitcoin the market is so much more mature now. and you can actually compare it with bigger markets. the behavior there is also perfectly normal, it is just that we are in a long adoption stage which means the enthusiasm for investing in bitcoin is always going to cause spikes like last year which they would need corrections right afterwards before another spike takes place.