Market Roundup & Bitcoin Analysis
The Predictive Aspect Of Markets
Technical analysis predicts events, or more accurately, it predicts how price action will behave, as a result of events. This is something that free riders are unable to accept. They believe they have some special intuition that will somehow always be correct. A trade “idea” without a thesis to support it is a gamble. There are cases where talent and intuition play a role. This is, however, usually accompanied by a form of substance.
Imagine for a moment, interviewing some of the top traders, only to discover that their greatest victories were based on ” I just had a feeling Bitcoin was going to do that”. People don’t realize how ridiculous they sound until it is contextualized by someone. Being in sync with the market relies on several aspects, and technical analysis is one of them. Consistency is important. However, accuracy is even more so.
Bitcoin is behaving as expected. Something we explored in an article published in June of this year is the predictive sideways chop that tends to dominate this particular stage of the cycle, often accompanied by various events aimed at increasing volatility, hence the title: “The Accumulation Zone – Where Warfare Takes place”. The following excerpts are from the abovementioned article:
During this phase last time around we had the One Token scam, I think it was. This created tremendous volatility. This time around we have the SEC and other regulatory issues. There is always some type of battle or chaos during this period.
Significant evidence and signs point to a period of accumulation. The market could move sideways for a while, or even experience similar volatility as before. Either way, this is the period of accumulation that tends to last months and provides a great window of opportunity. The way I see it, further downside at this point is simply an opportunity in disguise.
News events, announcements, and other happenings always tend to introduce volatility during this period. The “block” I plotted back in June seems to be playing out as expected. We did experience a temporal deviation. However, this was a potential scenario, and one that I outlined in the article entitled: “Bitcoin Fever Kicking In – Analysis & Retrospection”.
As mentioned, I believe that we are likely to see Bitcoin trade within this green rectangle for the remainder of the year. If things go well, we could pierce that second rectangle. That being said, a sudden correction could also provide extremely lucrative buying opportunities. We saw this during a similar phase in the previous cycle. However, similar to that, and the covid correction, it’s likely to be more of a buying opportunity than a problem.
Comparing the first screenshot with the second, we can see a healthy progression towards the middle of the block. There is an “interruption” that created a great opportunity. However, the trajectory has been corrected. All extrapolations experience momentary deviations, but there is always a reversion to the mean, provided the analysis and thesis are accurate.
The events might be a surprise. However, the price action is not. In other words, technical analysis indirectly predicts events. There might be a little volatility again during the final stages of 2023/green rectangle. Essentially, everything remains pretty much on track, for now.
It’s also interesting to note that the swan event of 2020 only managed to delay the inevitable. Even though there was a bit of a detour, ultimately, everything remained on track. The same applies now. A monstrous move, either way, should not be considered an adjustment in trajectory… at least until the trend is negated, and or, reversed. See you next time!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
