If you have been in crypto for longer than 9 months, you don't need to read this. The reason being is that you know about market cycles in the cryptocurrency markets, or atleast you should. Its absolutely evident in each bitcoin and altcoin rally. If you have been investing or bought into crypto within the past 6 months, you've pretty much seen it all.
What I mean is, there's been a bitcoin rally to 20k, and a complete burst of a bubble to now 7k. Alot of altcoins on most exchanges went 2-5x in December and January. These too have had hard declines in price, ranging from 50-80% from the Dec/Jan tops. Looking at a chart today, I have come up with a theory on altcoin trading, and trading in general.
Basic TA is the theory
When it comes to these altcoin cycles and bitcoin movements as well, support and resistance lines work as an emotional control and an entry/exit indicator.
Example #1:
$XRP, Ripple. The coin everyone hates and refuses to trade. Basic support and resistance zones in yellow show this coin has a ways down before accumulation starts and thus a new cycle.
Example #2:
$XCP, Counterparty is the coin.
3D chart
Bullish divergence on the RSI, and its turning up on the 3 day wow sounds bullish right??? Guess where it is?? Support zone
Confluence of price action and one indicator is good enough for me
In the alt market these lines solve emotional issues, and I'd argue that about 80% of the 1596 cryptocurrencies are extremely obedient to these basic horizontal levels. This correlates with #DYOR. Remember from that herd mentality rant I went on? No? You must be a herd member. Alright, I'm sorry. Take no offense. Just a little shade.
Look for the cycles out there and prepare. It's really as easy as buy low and sell high, yet so many people refuse to do it. We're all rekt, its a bear season in crypto. Be easy. Buy the blood in the streets. Wait, didn't some famous "investor" say that?
Some investor he was, Rockefeller is considered the richest man in American history. According to Forbes, when Rockefeller died in 1937 his assets were worth 1.5% of American economic output. Equal to about $340 billion today. Do you think this man knows what he's talking about? I'm taking his word for it.
All that then this
Buy low and sell high seems so easy, but it is actually quite difficult because of human emotions. They can make you feel and do the exact opposite. Buy on the way up and sell on the way down. The unemotional strategy is to scale out of parabolic/strong moves up, by accumulating at low support levels. I think this is why S/R is the one of the most fundamentally important aspects of TA. It is so easy, yet so hard to follow for 80% of traders.
Technical analysis is just a game. Drawing lines on the chart to justify your bias and mine too. Seeing that we have the same chart it makes sense, because we both want price to go up. Ironically if enough people have the same TA on the chart, the price action should reflect the TA perfectly. Its all just a game.
Then you got the manliness aspect of the trade. Listen up other million traders, I'm going to buy lower than you and dump on you. You know why I'm going to sell before you? Because I bought before you and my targets are already reached. Your targets, that are a little higher than mine, are going to get wicked by the top candle and your limit orders are going to get skipped. Sorry, have a nice day.
That's the attitude of a successful trader.
That's all I got today, just trying to keep this crypto stuff going. Just because we're in a bear market doesn't change anything long term. The trend will change again in the future, and it will change many more times as a matter of fact. Those who stick this bear trend out and keep grinding will be happy at some point in the future. I wish I could guarantee it, but I don't control that. The markets are a device of transferring wealth from the impatient to the patient. Good luck.
Stay tuned for a video being uploaded tonight
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Yours truly,
BullsVsBears
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How to go against the crowd: https://steemit.com/steemit/@bullsvsbears/herd-mentality-and-why-its-beneficial-to-read-this
BTC nonsense: https://steemit.com/bitcoin/@bullsvsbears/bitcoin-is-dead-time-347-there-s-a-huge-lesson-in-there-btw