Apophenia and the Bullish possibility.
This is the bullish scenario.
APOPHENIA is the tendency for people to see patterns in a set of randomness. However, Bitcoin has shown some obvious cyclical patterns over its infancy that appear to be useful.
We are by now most all familiar with the Wall Street cheat sheet, which is really just a graphical representation showing human behavior as a whole. More and more this is starting to look like a Wycoff accumulation. Each successive sell off has been more drawn out and less extreme. Liken it to the physics pattern of kinetic returning to potential energy. Consider that we are throwing a rubber ball up to a new shelf from a point of lower elevation. Upon landing
it would have a first initial large bounce, Then bounce to half its previous height with every following bounce.
Now a trading chart might not follow the same axiomatic framework as a physics experiment, but the analogy is helpful in grasping the concept. We are also starting to see some instance of support in OBV, an indicator I like to use along with RSI. I am not a fan of too many indicators, as I think it clouds and clutters the clear picture. The only thing I look for with those indicators is flattening or divergence. Which on balance of probability, seems to be helpful.
No asset can be monotonically positive, so as anything that grows, the gains are reaped along the way. Profits will be taken, and this could be the reason for a Wycoff pattern. Remember, this asset is still in its nascency, and just as Metcalfe's law implies, the value of a network is the square of its participants. We are still early.
APOPHENIA is the tendency for people to see patterns in a set of randomness. However, Bitcoin has shown some obvious cyclical patterns over its infancy that appear to be useful.
We are by now most all familiar with the Wall Street cheat sheet, which is really just a graphical representation showing human behavior as a whole. More and more this is starting to look like a Wycoff accumulation. Each successive sell off has been more drawn out and less extreme. Liken it to the physics pattern of kinetic returning to potential energy. Consider that we are throwing a rubber ball up to a new shelf from a point of lower elevation. Upon landing
it would have a first initial large bounce, Then bounce to half its previous height with every following bounce.
Now a trading chart might not follow the same axiomatic framework as a physics experiment, but the analogy is helpful in grasping the concept. We are also starting to see some instance of support in OBV, an indicator I like to use along with RSI. I am not a fan of too many indicators, as I think it clouds and clutters the clear picture. The only thing I look for with those indicators is flattening or divergence. Which on balance of probability, seems to be helpful.
No asset can be monotonically positive, so as anything that grows, the gains are reaped along the way. Profits will be taken, and this could be the reason for a Wycoff pattern. Remember, this asset is still in its nascency, and just as Metcalfe's law implies, the value of a network is the square of its participants. We are still early.
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