Senior crypto trader: "Bitcoin is digital gold" has not been confirmed, prefer band trading
Encrypted media Cointelegraph interviewed Christopher Inks, a senior encryption trader at market research firm TexasWest Capital. In the interview, Inks said that "bitcoin is digital gold" has not been confirmed.
For many people, trading cryptocurrencies can be challenging, but if you can rely on technical analysis tools for analysis, the process becomes easier. Indexes such as RSI, MACD, EMA, and Bollinger Bands can bring good results to traders. However, Inks believes that the current encryption media, mainstream media and social media are full of these crappy encryption analysis, which is why he entered the encryption industry. He said that this situation is particularly serious in 2016 and 2017, but the problem remains.
In his interview, he responded to the arguments that “bitcoin is digital gold” and “bitcoin is a safe-haven asset” popular in the encryption community in the past few months. He said that these arguments appeared when the traditional market showed signs of economic recession, but we still can't confirm these claims. Bitcoin has been on the rise since the advent of the macro economy, so we can't know how it performed during the recession.
He said that the unique volatility of Bitcoin makes it a very risky asset, and in this case it should not be of interest. However, if the recession occurs, investors should pay attention to the bitcoin market. If it can maintain its strength during the macroeconomic recession, then the argument that “bitcoin is digital gold” will be greatly supported.
For the way it trades in the cryptocurrency market, Inks says he is a proponent of the band trading theory. He said that for novice traders, the longer the interval between transactions. He will make short-term trades in one or more days because it allows for more efficient use of leverage.
For the application of encrypted charts in trading, he believes that the chart is only a visual representation of the interaction between humans, and this interaction is based on fear and greed. So, to understand this, traders can better read the volume and price behavior to decipher what really happens.
If you are always waiting for news to take action, you are always struggling to cope. But being able to read the volume and price behavior, you will take the initiative, because you can prepare in advance of the news release.
Regarding the impact of open interest on Bitcoin in the Bitcoin futures market, he said that the open interest is only the number of outstanding contracts, which means it is an indicator of market activity. If the open interest is increased, then we know that new funds are entering the market, so the mainstream trend should continue. The decline in positions indicates that the trend may end with the loss of funds.
By Xiu MU
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Disclaimer: It is only the author's point of view and does not constitute investment advice. Investment is risky and at your own risk.