Nov 30 · 4 min read

Does Technical Analysis no longer work for Bitcoin?

During the long bear market it became clear that HODL is no longer the best strategy to preserve or even build wealth in the cryptocurrency industry. It was a hard lesson for many. You certainly would agree to that, right?

As a result the focus appeared to shift from HODL to Trading.

Channels on Social Networks no longer covered only news but rather centered around predicting the short term movements, and mostly relating to Technical Analysis, to achieve that.

However, the level of sophistication was rather low and most “Influencers” had little to none experience in trading. This resulted in significant losses, across the board in recent months. Just now, when everyone is up to date with basic TA it no longer seems to work, or does it?

It has some resemblance to Murphy’s Law, or the buttered toast phenomenon. The buttered toast phenomenon is an observation that buttered toast tends to land butter-side down.

If you traded in the last months based on basic technical indicators there is a high degree of certainty that you have lost a lot of money.

Beating this market has rarely been this difficult.

What we have witnessed recently: None of the basic indicators appeared to be able to predict the movement of Bitcoin. Death Cross, Descending Triangle, Head and Shoulders, et cetera...

Very experienced traders are aware of course that trading successfully demands more than basic understanding. Deep knowledge and experience that only a few percent are able to do.

You might think, “hold on, even the experienced Pro Traders don’t get it right anymore. How can someone like me ever get there?”

And indeed, among the few percent of Pro Traders there was still consensus of an 8k floor for Bitcoin, using advanced methods as Fibonacci, Fractals, Moving Averages, to name just a few.

But even the Pro’s predictions no longer hit the center of the target. Across the board you can witness expert traders as Jacob Canfield missing their targets and re-thinking their strategy.

Now coming to the critical question, does Technical Analysis no longer work for Bitcoin? And where is the evidence for that?

During the recent blockshow event in Singapore an interesting discussion took place between two Crypto Influencers. Richart Heart had a debate with Tone Vays whether TA still works.

According to Tone the Bitcoin surge earlier this year was a result of people leaving altcoins. However this argument seems flawed. If Bitcoin would have only risen in price due to a shift from Altcoins to Bitcoin, then the total marketcap would have never changed. But it. Well, moving on.

Richard Hart however had a more versatile perspective that emphasizes that TA is only one small part of the puzzle, next to TA you need also FA and CA in order to time the market right. And that makes it almost impossible.

While most people are aware that FA stands for Fundamental Analysis, but what does CA stand for? It’s a term Richard invented based on the impact of news in China or Asia. You will probably ask “What does CA stand for?” The Answer is China Analysis.” And why is that worth even mentioning?

Traders in Asia are more prone to trade based on news compared to traders in America or Europe. This became evident when China Premier Xi Jinping’s embraced blockchain: Instant Pump.

Note: When White House Chief of Staff Mulveny made positive remark on blockchain technology, it left the market almost untouched. Hence Richard Heart’s conclusion does makes indeed more sense.

What does this mean for you as a Novice or Trader aspiring to become an expert, is this even a realistic goal that can be achieved in these conditions?

Trading is a full time job, you need to be glued to your computer all day. You need to identify what key developments drive the market, you need to have an ear on the ground and a broad radar to be able to capture news and filter the ones with the biggest impact on price action.

Wouldn’t it be so much easier to simply follow Pro Players who beat the market? Why being exposed to these risks in the first place?

Even if you are an experienced trader, you probably did not have many successful trades in recent months. If you did than congratulations. You are a rare minority. No need to read on.

Everyone else, question yourself if you want to dedicate all your time to trading and still close many trades in losses each time something slipped your attention? Is it worth the struggle?

Wouldn’t it be so much more easy to stop gambling with your money and join Tycoon? Never has it been so easy, join us today, open your account and start winning “tomorrow”.

Final Note: The remarks are forward looking, the platform is in it’s final stages to become ready for launch. Hence with “tomorrow” we mean the actual launch date of the platform.

So we need to ask for a bit more patience. In the meantime, you can purchase in our Token as an early investor. We believe we will re-shape the world of Social Trading. Join us now on https://tycoon.io/

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