Social Media Trading Analysts Are Likely Mostly Doing a Disservice to the Blockchain Community
About a month ago, I wrote this:
https://steemit.com/bitcoins/@kenraphael/there-is-little-chance-bitcoins-can-sustain-any-real-recovery-until-this-fundamental-metric-begins-to-turn-upwards-again
based on fundamentals analysis of bitcoin blockchain metrics. This is what the daily unique address chart looks like today:
Source: bitcoin.info
It showed a downward trend since late December and still continues to do so currently. Please check that article for an explanation of what this metric shows.
Through that time, social media analysts have egged on newbies and normal folk with other skills (who do not think they are experts in investing) and led them into putting funds into the market at bitcoin prices of $12K, 11k, and even earlier on at $17k when fundamentally it was already clear that metrics could not sustain a recovery. Yes they put the disclaimer on their predictions. But who would want to miss an opportunity at bitcoins at $12k when they see drawings and lines sending it to $15K soon. Or bitcoins at 10K when they claim to see a head and shoulder and the mark 12K on the charts next.
Just a few days ago many were claiming they saw the end to the correction, and then inverse head and shoulders pattern which they then got rapidly changed to an inverse head and shoulders few days later. And without ever explaining why they were wrong so many could factor that in next time.
Some of these analysts may mean well. But in reality, there is no short term chart pattern that routinely fits the current observation and that's because price is an output and can not tell what will happen next beyond the pattern it is currently expressing. Fundamentals are based on inputs so provide more valuable insight into value. And yet both are susceptible to events. It is pretty much stupid to claim events will not affect price trajectory or sentiments. For instance, if a major economy announces bitcoin as legal tender today (unlikely) it would definitely influence the pattern that would be expressed next. Even then, sometimes the best thing in many cases is to invest based on value and stick with those valuable assets when they are based on true research and understanding of such assets.
Example analysis with all kinds of supporting lines even while there was no recovery yet. Source: social media analyst deliberately not identified.
Following trading analyst recommendation is potentially harmful, and I haven't found a single person that did better this way. New blockchain enthusiasts should be better encouraged to learn the underlying technology and how to determine value. Understand the fundamentals, and not follow trends and support lines drawn without any fundamental basis or serious analysis. That art is inept in the current market which is driven by fundamentals as shown in several prior posts. If you must though I found a good guide here making light of current chart analyses (thanks @kevinwong). In reality, Education is the best cure for the completely misleading analysis floating around that leads on net to losses both in value and in faith.
About the Author
Ken has a doctorate in Engineering, and a master’s in Computer Aided Engineering, An IT professional, programmer and published researcher with over thirty publications in various fields of technology, including several peer reviewed journals and publications.
Legal Disclaimer: I am not a financial adviser and this is not financial advice. The information provided in this post and any other posts that I make and any accompanying material is for informational and educational purposes only.
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This is only opinion. It is not advice nor recommendation to either buy or sell anything! It's only meant for use as informative, educational, or entertainment purposes.
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Good article.
When you see people on this site, spamming their analysis on 10 coins a day, it is easy to get lured into investing, with the promise of giant returns.
When it was a bull market, it is easy to look like a genius.
I think the reporting suffers from the fact that those reporting are all heavy holders of the currency they're reporting on. Talk about stake in the game. They are extremely partial. Even if they wanted to behave impartially, I don't know that their minds wouldn't play tricks on them.
How does that saying go? Something like, never expect a man to tell the truth when his livelihood depends on the lie?
Anyway, I think there is no stopping them from overselling the upwards potential. We just have to do a better job of giving out more rational information like this. It isn't responsible to dismiss the upward potential of crypto either, as many do as soon as they hear agreement that it isn't a sure thing. It is neither a sure thing nor an impossible or even unlikely thing for crypto to appreciate. The overall market is very likely to appreciate over some period of time. But as you say above and the saying goes in general, past performance does not indicate future results. We can't know WHEN events will shift the market into a steady recovery.
Just imagine if people could short these coins!
I agree with you. While people might mean well, the reality is that they are hurting the market and other Blockchain users by saying things without caring. I find it irresponsible, specially because so many people believe cryptocurrencies are a fountain of magical money with no logic whatsoever. They tend to follow these bits of advice, to speak ill of crypto when it doesn't go as this or that social media guru told them.
In my (albeit limited) understanding, to succeed in trading, you must learn to have your own opinion, and above all, be able to identify when someone is just saying uneducated guesses to make some noise. Thank you for this post, it's a simple but effective way to say "Refrain from hurting the cripto world for the sake of likes, thank you!".
-A.
Agreed. And in some cases it is done for payments that accrue for postings on social media from the hapless followers who like, share or upvote the vapid prognostications.
Thanks kenraphael for this post.
I have analysed and stretched it many times, and i see that it isn't just about ignorance on the part of the newbies. It is only an act of taking advantage of their avariciousness.
We all have a measure of avarice in our bloodstreams. But when avarice meets with staunch ignorance, a very gullible baby monster is born.
So, these anaylist are only pressing people's avarice buttons.
It's really sad to see people taking advantage of the lack of knowledge of others. In certain communities I've seen something really sad: people requesting payments for "advanced predictions". And that's just a sick way of playing up with newbies' investments. I've seen so many complains about this that I'm still amazed as to how people keep falling into those traps. It's a real shame.
-A.
Wow. Really?😲
Bitcoin and many other cryptocurrencies are going through a rough patch due to not favourable media coverage, but I highly doubt that this is the end. Crypto is the future and sure will have growth pains like many other technologies out there.
The article does not imply the contrary. It does state that a good strategy would be to hold on to valuable assets in the space.
At first i was stupified by how foolish people were, complete newbies who couldnt tell the difference between luck or skill or superstition. I kept asking, What about the asset's fundamentals?? DID YOU ACTUALLY READ WHAT THAT ICO SAID ABOUT THEIR ROADMAP AND YOU HAVE NO QUESTIONS OR SKEPTICISM ABOUT THEIR PROJECTIONS AND CLAIMS?? They said it didnt matter. Or they were too amped up on the high of addiction (excitement!!) to hear me. So, i just observe them as a source of entertainment. Some people have to learn the hard way... Just be glad that these uneducated people cant trade options on crypto!
I never encourage my friends or family to buy crypto because I'd feel bad if they lost money
As a follower of @followforupvotes this post has been randomly selected and upvoted! Enjoy your upvote and have a great day!
Most people thinks trading cryptocurrency can make them billions or millions over night when in reality its not the same, there are a lot of factors to consider before one invest in a cryptocurrency as most tokens we know now will die off before the end of 2019 and a lot of people will go rekted, as they are gamblers and not investors. No. 1 rule of trading 💹 DYOR
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thank you,
Cryptocurrency analysts and traders have taken to social media and other platforms to publicly share their insights and advice on industry trends, popular
And in some cases kind of take advantage of the uninformed and moderately informed to make money for themselves at their expense. And a lot of the insights are shown wrong. Clearly. But most never bother to analyze or share insights on why those do not pan out.