In the face of increasing uncertainty, many people of the crypto community are inclined to rely on technical analysis. Color graphics look beautiful on the monitor. But according to long-term data it turns out that the effectiveness of technical analysis is close to 50%. That is – a shot in the dark. The more valuable is the analysis of the market on the basis of fundamental factors and own experience. Curious conclusions are made by Carter Thomas – entrepreneur, investor, high five specialist.
The expert states that bitcoin is a living organism, like any market. And like any organism, it tends to homeostatic equilibrium. Homeostasis is self-regulation, the ability of an open system to maintain the constancy of its internal state through coordinated reactions aimed at maintaining a dynamic equilibrium. In a living organism, periods of activity alternate with periods of rest. Now bitcoin is in the period of rest (accumulation) and you need to guess when it will end. Carter Thomas says:
– Bitcoin is a living organism like any market is. This is a potential accumulation period and the real key is trying to see what the trading zone is. The big question is what’s the length of this particular accumulation phase going to be now? So key is knowing what the larger trend is.
The second observation, sharing by the expert, is connected with the first one. It’s summary is the fact that the fluctuations in the value of the main crypto currency are gradually decreasing, but the average value is growing. The expert notes:
– These highs are getting lower from March through May to July with almost $8500 and then the lows are getting a little bit higher incrementally it’s a little less obvious. This is tightening up and this continuing to tighten up eventually it’s going to start to expand and then also start to rise. When do you start to see the movements up? If you did get a big spike in the next week or two it would come back because it is too much tension and trading activity happening around these levels for any major movement to be sustainable.
Conclusions? “With Bitcoin as an asset it is not a very good time to be getting super into the nitty-gritty unless you really know what you’re doing”. In plain English – HODL!