In an interview with Forbes, John Bollinger, the creator of the widely used trading analysis index, said in an interview with Forbes that the price behavior of cryptocurrency markets such as Bitcoin is much like the early stock market.
The Bollinger Band is a very practical technical indicator designed by Bollinger based on the standard deviation principle in statistics. It consists of three track lines, of which the upper and lower lines can be regarded as the price pressure line and the support line respectively, and a price average line between the two lines.
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Bitcoin is the largest cryptocurrency market capitalization. Since its inception more than a decade ago, more and more traditional market traders and experts have entered the field of encryption. John Bollinger began to focus on the industry about three years ago, looking for opportunities to trade these digital assets.
Bollinger said in an interview, "I have been paying attention to this field very early. Some of my friends are very early miners. I kept my attention but didn't get involved. About three years ago, I began to observe the price trend of Bitcoin. It behaves much like arbitrage and program trading and the stock market before the advent of algorithmic trading. I think this will make Bitcoin an ideal tool for trading with technical analysis tools."
Technical analysis of data collected from charts is very common in the cryptographic trading community. Traders and analysts often use websites such as TradingView.com to evaluate visual representations of price behavior over time and to make assumptions about price movements. Bollinger said, "I tested these ideas and it turned out to be completely correct. All cryptocurrencies are like this. This makes me interested because it performs very well compared to traditional technical analysis rules. ""
Bollinger believes that the traditional trading market is now heavily affected by "algorithm trading." He used the ETF as an example, saying that “it tends to fuse the price behavior of many stocks.” He said that he wants to see if there is still a market that is consistent with the previous stock market behavior. He believes that “the bitcoin market is one of them. one".
Compared to three years ago, the market for Bitcoin has changed a lot, and many new players have already taken large sums of money into the market. Traditional financial giants have also entered the field, such as the cash-settled bitcoin futures trading provided by the Chicago Mercantile Exchange, but the Bitcoin ETF has yet to be approved by regulators.
However, Bollinger said that the current behavior of the encryption market is still similar to the traditional market before the algorithmic transaction. He said "I don't think it has changed much." He also said that the cryptocurrency that can be traded has been reduced over the past year and a half because some speculative capital has left. But for the main cryptocurrency, the investment is still very active.
At the same time, he also admitted that the launch of trading products such as the cash-settled Bitcoin futures of the Chicago Mercantile Exchange has already affected the trading of Bitcoin. He said, "I don't know if it will affect its overall price level, but it will Bring some 'noise'". He said that the stock market is also the same when introducing stock index futures. The impact of futures activities, hedging activities and other derivatives on the market is not based on supply and demand relations and trends, but based on trading mechanisms.
For the recent market in the cryptocurrency market, he believes that "bitcoin and other cryptocurrencies are trying to establish a bottom that can have a medium-term impact, but it has not yet been completed. Between $10,000 and $9, Bitcoin is now trying to find a low. Point. Other cryptocurrencies are still creating new lows, I think this process has not been completed."
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By Xiu MU
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