Consult all the charts you’d like, all the data in the World; one thing will always hold true—the future is necessarily never found in the past. What we “deduce” from empirical data is actually “induced.”
Technical Analysis is Inductive and Invalid; however, through Hypothetical Empirical Deduction, we place a very strong faith in Technical Analysis. That in itself can aggressively push markets…so much so, that some can only see absolute fact, truth in Technical Analysis. A failure is in not enough information, or in not enough variables considered. And when that sort of faith begins to be normalized amongst Market participants—the greater their number, the more drastic and the more frequent those participants will be shown an unfortunate reality. There is no value in blind faith…literally.
The Market is entirely driven by sentiment (and, yes, I understand that there are measures of Market Sentiment; I will disregard quantized measures of sentiment as just another part of Technical Analysis); BUT! People are fairly sentimental toward Technical Analysis…go figure! One should always be gauging Market Sentiment…including the relative sentiment for Technical Analysis.
Cryptocurrency is a perfect example. Through 2020, BTC has gone from being definitely not a currency, then to an asset correlated with the S&P500 to not really a correlate, then possibly a currency, then a commodity like Gold, & now the “New Gold”…& maybe a viable currency based on popularity. And BTC vs all other altcoins is comparatively not that volatile…yikes!
The Technical Analysis of BTC, yeah, sometimes it’s a hit…(?). But it is pure sentiment that drives BTC. Well, what sentiments…? The sentiment for Technical Analysis isn’t too strong…BTC is supposed to be anywhere between ~$20,000 USD to upwards of ~$500,000 USD per 1 BTC, going hyperbolic months ago! …Or, ~50:50, utterly collapsed and worthless…months ago! …(?)
What drives BTC? Aside from the Zealots still holding on for a Market Miracle…(?)… I’d say both Regional and Global unrest/ conflict (not necessarily war, but war is sufficient!) /disaster drive up BTC in the short term; shifts in Government spending and/or monetary policy by any one of the ~top 20+ Global Economies; its perceived value as a solid long-term hedge (there’s always another halvening…until there isn’t…!); and the longer term standard S-Curve relative the Adoption of Innovation (i.e., it’s more well known and used over time).
Otherwise, it’s also subject to manipulation by unknown players (whales that can drop BTC by $500 in an instant, or pump up even more than that via subtle, incremental buy-ins over 30, 60, 90 days). This is deeply problematic because it pushes people away from its potential use value, & draws in people that will sit on it as if it were an investment. But, IF its use value is questionable (not strictly because of whales alone; BTC makes for slow transactions, & consumes a tremendous amount of energy to keep operational) and IF investment as a hedge loses appeal with no more halvenings, THEN what is left…? The adoption S-Curve…(?). Hope that Capitalism takes a break…(?).
I think more likely a push toward ATH, followed by rapid extraction of wealth by those savvy enough to understand and read Market Sentiment, and by those already wealthy, unaware or unphased, through a cruel weaponization of Market Sentiment…not really all that different than the sudden appearance of an armed robber, advantaged by holding a handgun, and demanding of some random person they hand over all of their money, him or herself disadvantaged and vulnerable (someone strictly into Market Technical Analysis I bet…), simply because they are not holding a handgun (OR! …? A Tactical Nuke…? I’m not here to sell the US 2nd Amendment…)—that’s the Sentiment of a Safe Society.