Does Fundamental Analysis Trump Technical Analysis?

by Seth Mek on May 30, 2018

I know this post may rustle a few jimmies so consider this sentence your trigger warning. In my opinion, I do not believe Technical Analysis is a sure shot way predict the outcome of a coin. To be quite honest, I don't think Fundamental Analysis is either, to a certain degree. Here's the thing with the crypto world: nobody knows what's going to happen next. You can predict cup with handles and double bottoms all day long but the truth is, prices could move in the opposite direction without warning. Now that's not to say there aren't experienced individuals, especially on Twitter, who can TA like nobody's business. That works in some cases, but with the way the market has been moving, particularly as of late, it's literally a warzone for day traders. Here's some examples of why I believe TA is a crap shoot:

  • Volatile Market — Sneeze and the prices swing in an instant
  • Altcoins — They're pegged to Bitcoin. BTC goes down along with your alts
  • Stocks / Forex — Completely different beast. Stock Market ≠ Crypto Market
  • Chart Reading — Every TA expert has their own style; 3 gurus predict 3 different outcomes for the same coin

In reality, TA and FA aren't so different if you really think about. A select group of people live and die by the chart where the other group attempts to read what the project is actually doing, in real life. Now I know I mentioned above that TA is a crap shoot, but the same can be said for FA as well. I personally feel with FA, you have a better idea of what the project is up to, and for lack of a better word, "predict" the movement of the coin, whether you're in it for the long-haul or flipping for profit. A good example of this is studying what the project is about. And I mean really studying the coin of interest. Read the white, black and/or yellow papers carefully, understand and analyze the road maps to the best of your ability. A project can ink a deal with a big company and solidify a real-world use case on any given day. Another key example that I think is a tell-tale sign of a potentially prosperous project is their website and social media presence. Keep your eyes peeled for how the team and devs compose themselves on these platforms, not only on Twitter, but on Github, Discord and Telegram as well. This allows for understanding the timing for potential gains of the project, mind you this doesn't have a 1:1 correlation as we have seen many main-net launches that produce zero, or even negative price movement.

At the end of the day, I feel as though both TA and FA realistically have one too many variables involved and I am a firm believer that the value assigned to each digital currency is determined by the community of adopters that decide to hold and use it.

What do you think? Have I lost my mind or do I have a good argument? Share this blog post on Twitter and let us know.

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