As always, none of this is financial advice, always do your own research. Remember, cryptocurrencies are a highly risky thing to put money in and most lose their money.
There are many technical analysts doing extremely well trading not only cryptocurrencies, they trade stocks, options, futures, fiat currencies, and commodities.
There are many naysayers on technical analysts that may trade on the hour, day, weeks, months, etc. Other traders use charts to try to spot when an asset is undervalued as a way to buy cheap and hold.
Many hedge fund analysts scoff at technical analysis, but our view is that really, technical analysis is pretty much a starting point for devising models that can be automated to deliver far more information than the human can physically do.
There are habits that we have personally found useful to accumulate more coins and potential profits;
Personally, undertaking these strategies has been a good move. Where the future really lies, we cannot tell. Can one become a multimillionaire in a few years' time, or will the government completely outlaw crypto? Our opinion is that the cryptocurrency multiverse is already too decentralised to put the genie back in the bottle. There are so many real world applications now that offer permanence and censorship resistance, that these benefits will increase. AI hasn't got started with crypto really. We still don't see enough widespread adoption in terms of payment handling between Anne and Bob, far too much crypto is on exchange, but the practicality along with smart contracts could be such a strong use case that it seems unstoppable.
So, we are still so early in crypto which is why our personal strategy is as follows;
The sad thing is that AI really is not what most nontechnical people believe it to be. AI needs humans to construct models based upon existing information. These models don't explain how they reached their decision, and the models are not deterministic for the main. At the same time, technical analysis is not deterministic either.
To use AI predictions we need to look at future events to assess what the results of acting on our decisions were. Once we have back-tested our model, there is confidence in our model to allow us to use these insights to shape our decision making.
The idea of probability in trading
If we think of a price movement, there are only four typical moves;
We can ignore the same, as eventually, a price will go up or down.
We can think of a price move that is up or down as binary, and thus humans tend to look at prices in terms of falls and rises. The moment we start to think of prices in a triangular fashion, they become more interesting. A price can will often revert, having gone up or down. What becomes interesting is that the time between reversion is what becomes interesting. For example, right now, many will be holding alts that still have not reverted to their all-time highs - 10th December, 2024;
Indeed, personally, exiting Etherum near its ATH and moving into BTC felt like a bad move, but appears to have been a great move. At the same time, we are stuck in some coins that are way off their ATH and we would feel far more comfortable with a little more Bitcoin.
However, accumulating more coins despite their low fiat value could have looked like the best move ever in ten years time. Maybe Bitcoin will fade into obscurity.
It would be a brave soul that sold a Bitcoin for 27 Ethereum right now.
Which is why we are building AI models for cryptocurrency analysis at Crypto Statto
We are imminently releasing our first Big Whale report and releasing associated datasets through our API. Behind the scenes we have been running machine learning on this data to start with the next phase of seeing if we can start to think in terms of personal cash flow. This is something we have to get right.
The plan will be to publish regular insights, moving towards APIs capable of delivering regular data feeds. You should always use additional platforms to help you make the right decision.
Exciting times for 2025.
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