why is it difficult to apply TA on altcoins with low marketcap

[Coyster]

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.

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.

[Silberman]

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.

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.

[cafucafucafu]

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.

[Silberman]

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.

It is all about the liquidity, if there is no interest and demand by investors it means the market volume will depend on the few whales in low marketcap altcoins. The TA is possible for top cryptocurrencies, otherwise, it is totally waste of time on small altcoin markets.

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.