Cryptos living up to their unpredictability with the recent downward moves while the majority of the investors remained at their speculative best expecting a major bounce. Rationality goes out the window when it comes to trading Cryptos! Well at least for most of the Crypto traders.
The digital coins have been known for their volatility since their inception but the price action has toned down ever since Cryptos receded from their all time highs & and the interest of people waned somewhat. Nonetheless the active traders still work on the premise of Cryptos bouncing on weird headlines & wild predictions rather than any technical basis based on price movements.
A couple of incidents that I would like to mention to make my point. First one was the Bitcoin Cash fork that happened a couple of days ago where almost everybody trading BCH was expecting it to spike big time but what a bummer that turned out to be as it actually dropped to further lows along with other Alt.coins.
Second was the much touted NYC Crypto Conference which was supposed to lift the digital coins massively but it actually did the opposite & Bitcoin fell 10% from the pre conference levels & so did the Alt.coins. People like Fundstrat’s Tom Lee, who had accurately predicted a Crypto price rise in the wake of US tax day, had used past price spikes after the Crypto event to predict a rally “even larger than past years.” But than again that’s why it’s called a prediction!
My contention with the price prediction scenario is that most of the Cryptos have not been here long enough to make any historical price comparisons of such events in the past. Only Bitcoin & Litecoin have been here since 2009 & 2011 respectively, which is not a big enough time frame to make such comparisons.
On the lighter side of things here is what Bloomberg Crypto tweeted after the disappointing price action from the Cryptos after the NYC consensus conference which concluded recently. Unfortunately, this sentiment is shared by the majority of Crypto traders if not all.
On the flip side technical traders like me stick to the much more boring job of reading the technical levels on the price charts to predict the next moves. As an example below is the hourly chart of Ethereum today. Now you be the judge, if you want to trade Cryptos based on wild assumptions or just follow the price action as the charts are dictating.