CHARTS CAN MISGUIDE YOU
In my previous post, I suggested that relying too heavily on charts for risk management can be misleading.
Many people reacted negatively, but I stand by my point. If you look at todayâs market, you'll see that people are discussing Bitcoin testing a key support level at $61,000.
Theyâre speculating that if it falls below this, it might drop further, but if it bounces back, it could reach $70,000 again.But hereâs the issue: if you can't predict what will actually happen, how useful is this analysis? During major news events, support and resistance levels often become irrelevant because the market becomes too volatile.
For long-term investors, these short-term support and resistance levels don't matter much. Events like Bitcoinâs halving donât have a lasting impact onIt's priceFurthermore, some of the chart analysis is incorrect. Theyâre calling $60,000 a major support level when it should have been $65,000, which was the all-time high (ATH) in 2021. The next major support level should be around $57,000.
So, if Bitcoin was really on a decline, it should have dropped to around $50,000 or $45,000. Iâd actually welcome that drop because Iâd buy more Bitcoin at those lower prices.
In summary, during news events, support and resistance levels often donât work as expected. I believe Bitcoin will rise, possibly hitting $88,000 or even $100,000. Altcoins might perform even better than Bitcoin. So, if you have less than $5,000 to invest, it might be better to invest in smaller coins and eventually convert them to Bitcoin.
