Cryptopunx we love ya! Gotta admit, we really deeply love this graph. To our eye, pure cause and effect. Illustrative of Regulatory Market Shocks 101. The dates so clearly correspond to the most radical moves ever in the Bitcoin marketplace. Can't believe we had to tag it up ourselves- please tell me if we saw this graph, or just the same story, somewhere else- ( other than here https://www.publish0x.com/pro-crypto-party/chinese-politics-caused-the-first-pump-and-dump-save-bitcoin-xjjemym )
We grew up slinging technology in the research department & trading floor of a first tier, Fortune 50 firm that later merged with Citi. The research guys were proud for many reasons, including an unlimited budget for research; argue a good case & the money was there. This quickly evolved (degenerated) into "you guys got CRAY supercomputer time, so we will too, even though we have no programs that need it, we'll just run simplistic Monte Carlo simulations and pretend we did something."
Man, the smart people we met there were astounding. Though of course, information was power, so how can it be shared ? Because of this koan, Wall Street Technology was RETARDED at first compared to many industries. Monochromatic Green screen, PRIME computers retarded,
Ok not quite that bad, but it seemed that way coming from huge full color touch screens with HP or DEC in realtime systems . We have read some of Bloomberg's original code, written in of course FORTRAN. Not even ratfor or fort77. REALLY info was not shared. Once spoke to three people who worked within fifty feet of each other, and had been analysing the same problem in mortgage valuation for many months without ever speaking. One hadn't a clue yet. The second had a three page formula, a closed end solution he was proud of. The third gave us a one line formula which he said the three pages reduced to. We gave the one-liner to the second guy, who freaked - stuttered, spoke in sentence fragments, then ran into his office for three days, coming out to say it was true.
In this rarified world, it was publish or perish, and the reports were strong. And in this world, they only kept ONE technical analyst, ONE, residing of course in the lesser, scorned and spit upon equity research area.
Yes, they ridiculed the technical analysis guy, with his triple head and shoulders, wave theory, "I'm a little teapot" drawing pretty pictures on graphs. Arbitrage is for manly men, silly equity rabbit.
So we have always been suspicious of technical analysis. Of course, technical analysis is ACK SHUL ALLY the best way to analyze our initial graph. How the external, regulatory market shocks in the worlds largest country ( also the largest Bitcoin producing country) drove Bitcoin up to an all time peak, then dove down as fast as that clowny rollercoaster coin could fall, screaming all the way. And that is - pick some arbitrary time before the giant pump and dump, and draw a line through to somewhere after the miners ran and found cheap electricity elsewhere.
That is the real natural market growth of price, cleaned of the shocks.
Because technical analysis is very useful, it just can't predict the savage market movements, like whales d-cking around https://www.publish0x.com/hi-i-am-dave-and-i-just-got-hooked-on-crypto/is-the-plus-token-whale-playing-whack-a-mole-with-the-bitcoi-xwjxlw
Bitcoin and altcoins are even more affected / helped by technical analysis as a tool because so many of the old school research tools do not apply, and it is hard to strictly quantify the new ones that do ( well counting releases on Github can be done, but how to quantify use cases, team strength, marketing skills, timing, first mover etc)
One research tool that falls into the gap between technical and fundamental analysis - "Leaders and Followers". This is huge in altcoins - the basic premise of most of the most successful active altcoin traders out there. This is the strategy where, when one stock / altcoin in a specific sector has a huge bull run, then market investors seeking alpha will pile into any other stock / altcoin in the same sector as the recent big winner. It's pretty effective in the stock market, way better than a dead cat bounce. In altcoin trading, when one closely related coin achieves a technical breakout ( up or down, by whatever entrail casting, red arrow green line red fish two fish method is used ) then, if the second related coin has not yet broken out according to the same analysis laid over ITS chart, it will soon, bet on it. No, really, bet on it. Until the relationship snaps like a twig because Julian Sun has an arrest warrant out for him if he leaves San Fran where he seems to be having a really really good time.
And the real grudge we once held against leaders and followers ? At first, we were trapped on PRIME super minicomputers, before we won the budget for SUNs and Sequoias etc. We could not understand why this was - PRIMES were so bad compared to say DECs at the time that literally no one anywhere used PRIMEs. The bug list per OS release was so long the PRIME managers would not release it to internal developers for fear we would just lose faith ( which we already had.) was there some sort of investment banking relationship with PRIME ? maybe, but always denied at this firm ( thank god.) But PRIME stock kept going up, which seemed to justify PRIMEs to some powerful guys. It mystified us, why did that crappy companies stock ever go up? PRIME went bankrupt eventually, but long after.
So why did that accursed, unholy, stinky PRIME superminicomputer stock go up ? because it was considered a "follower" to DEC as a "leader." And all the fundamental reasons why PRIME was horrible did not matter, whenever DEC went up for having good products or marketing or huge installed base wins, etc, PRIME went up. Thank god we did not have the chance to short sell PRIME on strong fundamentals, we would have wrecked hard