Well I have to say these things really look similar, no doubt about that. I thought about zooming out a bit after the nerve-destroying events the past several days had to offer on the smaller scale. I am no day trader after all, so why bother with daily brainhemorrhages? Because I am interesteeeeed :)
But looking at this, I suppose noone can deny the similarity. What does that tell us? Fractals are everywhere in nature and life. I recommend to read a bit about them, its quite an interesting and funny topic of science.
And of course they exist in markets as well. Why is that?
Because human thinking never changes. Just look back on our history, open a history book of any kind. Do you recognize any similarities throughout the ages? I suppose you do. Human minds function alike anywhere, anytime.
I dont say that everyone has the same droid soul with droid processors... There are brilliant minds who change the course of history sometimes,and every person is a unique individuum. But we tend to follow basic patterns, regarding emotions, decisions, and so on...
Price charts can look alike because people react to events with the same emotions again and again. Practically, trading analysis is based on the mathematics and repeating patterns of human psychology.
You might have heard the saying "This time its different... No its not" many times. Thats because the above mentioned thoughts.
But things actually CAN be different. What is it that reeeeally can be different then, if it is not human thinking?
Well, there are some things:
Context and background. Things can look like they are following earlier patterns, but then surprise everyone by changing course. This can happen because of great news, either bad or good.
Next, the movements of the market can have different foundations, like adaptation, technical improvements, popularity, marketing, etc. There were some changes regarding these fundamentals of course, but nothing rule-breaking.
There were some news throughout the past months, but as I see it, none of them were good enough to justify this rally. On the other hand, the bad news seemed to be ignored almost completely. This is partially because euphoria, and partially because arteficial price rise.
Another thing that can be different is influence, and the goal behind the influence. If people who have the possibility to push markets want to push them in a certain way, then it will happen no matter what. And thus, they trigger the same mental patterns as always in the small investors.
I dont want to point out the dry-sucked fact of "btc is being manipulateeed". Of course it is manipulated. Even the whole Earth is manipulated heavily by humanity - and let me say that in a very bad direction, but thats another story. Back to btc. Are there people who have enough financial background to manipulate it? Sure there are. If they have any interest in doing so, will they? Sure they will. Would you harvest some money if you had the power to do it? I think many of us would.
Many say that you cannot know how whales think. Well noone knows what whales will do next time. But EVERYONE know how whales think: They want to make moneeeeey.
As everyone else. The difference is that they have the influence as well.
So the other element is influence.
And there is the context which surrounds the influence. In what context are whales doing what they do? The previous rally was pushed up to 20k. Do they want to do it again, or are they satisfied with the achievement now? Well thats almost like contemplating if there is life after death.
What does the whole thing tell us?
Based on the repeating nature of human psychology, reason points down.
Based on the lack of news supporting the whole rally, and the ignoration of bad news, further rising of price is logically not justified.
Euphoria goes against all logic, and is also a pattern of human thinking. Euphoria needs fuel. The fuel now is the rise of price. If the price rises, then it will trigger the euphoric ones to buy, which rises price. This course of action needs a large trigger buy now. Seems like the last +10% was not enough (which tells us that small investors are not at all so confident as before, right now anyway). The cyclical nature of buying because price rises continues till something breaks it. Either terrible news or a whale. Which way the trigger goes... thats impossible to say, noone can read minds, especially not from a large distance :)
THEN WTF SHOULD I DO?
Lets think.
What do these things pointing in different ways make us feel? Confusion.
What do the presence of mysterious whales make us feel?
Insecurity.
What does the recent hectic and incalculable nature of btc make us feel?
Uncertainity.
Do these things give a definite decison of buy or sell? No.
THEN WTF IS ALL THIS? CANT WE SAY ANYTHING FOR SURE??!!
Yes we can. The whole story leads to something called "RISK".
The market is very risky now. Noone has to take more risks than what they can handle.
The other thing that is sure is that there WILL be less riskier and less uncertain times in this market. Maybe in a week or two, who knows.
Why jump into a wild river if you dont have outstanding swimming skills, you dont have to hurry anywhere, and you know that the water will calm down eventually?
And I suppose there was no trading advice in this essay :)
But looking at this, I suppose noone can deny the similarity. What does that tell us? Fractals are everywhere in nature and life. I recommend to read a bit about them, its quite an interesting and funny topic of science.
And of course they exist in markets as well. Why is that?
Because human thinking never changes. Just look back on our history, open a history book of any kind. Do you recognize any similarities throughout the ages? I suppose you do. Human minds function alike anywhere, anytime.
I dont say that everyone has the same droid soul with droid processors... There are brilliant minds who change the course of history sometimes,and every person is a unique individuum. But we tend to follow basic patterns, regarding emotions, decisions, and so on...
Price charts can look alike because people react to events with the same emotions again and again. Practically, trading analysis is based on the mathematics and repeating patterns of human psychology.
You might have heard the saying "This time its different... No its not" many times. Thats because the above mentioned thoughts.
But things actually CAN be different. What is it that reeeeally can be different then, if it is not human thinking?
Well, there are some things:
Context and background. Things can look like they are following earlier patterns, but then surprise everyone by changing course. This can happen because of great news, either bad or good.
Next, the movements of the market can have different foundations, like adaptation, technical improvements, popularity, marketing, etc. There were some changes regarding these fundamentals of course, but nothing rule-breaking.
There were some news throughout the past months, but as I see it, none of them were good enough to justify this rally. On the other hand, the bad news seemed to be ignored almost completely. This is partially because euphoria, and partially because arteficial price rise.
Another thing that can be different is influence, and the goal behind the influence. If people who have the possibility to push markets want to push them in a certain way, then it will happen no matter what. And thus, they trigger the same mental patterns as always in the small investors.
I dont want to point out the dry-sucked fact of "btc is being manipulateeed". Of course it is manipulated. Even the whole Earth is manipulated heavily by humanity - and let me say that in a very bad direction, but thats another story. Back to btc. Are there people who have enough financial background to manipulate it? Sure there are. If they have any interest in doing so, will they? Sure they will. Would you harvest some money if you had the power to do it? I think many of us would.
Many say that you cannot know how whales think. Well noone knows what whales will do next time. But EVERYONE know how whales think: They want to make moneeeeey.
As everyone else. The difference is that they have the influence as well.
So the other element is influence.
And there is the context which surrounds the influence. In what context are whales doing what they do? The previous rally was pushed up to 20k. Do they want to do it again, or are they satisfied with the achievement now? Well thats almost like contemplating if there is life after death.
What does the whole thing tell us?
Based on the repeating nature of human psychology, reason points down.
Based on the lack of news supporting the whole rally, and the ignoration of bad news, further rising of price is logically not justified.
Euphoria goes against all logic, and is also a pattern of human thinking. Euphoria needs fuel. The fuel now is the rise of price. If the price rises, then it will trigger the euphoric ones to buy, which rises price. This course of action needs a large trigger buy now. Seems like the last +10% was not enough (which tells us that small investors are not at all so confident as before, right now anyway). The cyclical nature of buying because price rises continues till something breaks it. Either terrible news or a whale. Which way the trigger goes... thats impossible to say, noone can read minds, especially not from a large distance :)
THEN WTF SHOULD I DO?
Lets think.
What do these things pointing in different ways make us feel? Confusion.
What do the presence of mysterious whales make us feel?
Insecurity.
What does the recent hectic and incalculable nature of btc make us feel?
Uncertainity.
Do these things give a definite decison of buy or sell? No.
THEN WTF IS ALL THIS? CANT WE SAY ANYTHING FOR SURE??!!
Yes we can. The whole story leads to something called "RISK".
The market is very risky now. Noone has to take more risks than what they can handle.
The other thing that is sure is that there WILL be less riskier and less uncertain times in this market. Maybe in a week or two, who knows.
Why jump into a wild river if you dont have outstanding swimming skills, you dont have to hurry anywhere, and you know that the water will calm down eventually?
And I suppose there was no trading advice in this essay :)