How Technical Indicators Differ In Crypto Versus Traditional Markets

Current resistance levels in the range of USD 8,500 on BTC
Tenet of technical analysis, that price reflects the supply/demand
Short-term crypto technical indicators less consistent than mid-term
Crytpo and Bitcoin Market Cap Story of Day

Crytpo and Bitcoin Market Cap Story of Day

CRYPTO MOVERS AND PRICES

 

 

CRYPTO STORY OF THE DAY

We've Been Hearing A Lot About BTC Technicals In The Most Recent Rally - We Wanted To Share Some Broad Thoughts About How, In Our Opinion, These Indicators Differ In Crypto Versus Traditional Public Markets

Crypto Takeaway: The underlying tenet of technical analysis, that price reflects the supply/demand interests of all market participants, is particularly challenged in crypto. Our estimates suggest that BTC, for example, is held by 90 to 95% 'retail' participants as opposed to held in portfolios managed by professionals. This contrasts with a traditional asset class like equities where over 50% of major indices component etc, are expected to be held by pros. While in equities one can reasonably expect that at any given moment at least half of the market is aware of price, in crypto given both the heavy retail ownership and 24/7 trading, you cannot. It is our general understanding that this dynamic contributes to short-term technical indicators being less consistent than mid-term technicals such as trading channels, pivot points etc... We'd highlight current visible resistance levels in the range of USD 8,500 on BTC (which we've included again in our chart today) as an example of a technical level that should have a reflexive impact on price.

 

NOTES

Crypto prices are weak this morning with BTC hitting visible resistance in the range of USD 8,300 to 8,500. Volumes remain in line with what we've seen over the last week.

About the Author

FRNT Financial is an Institutional Brokerage which offers clients a variety of products along with research & analytics in the crypto-space.