Has Bitcoin Gone for a Random Walk?

We love zooming in on daily moves. And the theme “When in Doubt zoom out” sounds like a joke when the market crashes.

Let’s define what a random walk is. It’s a set of changes in a variable that follows no discernible pattern or trend. It usually happens on the smallest time frames, when we zoom in so close to the chart that we cannot see a trend or pattern.

There are several trends that only affect the long term. What works on monthly and yearly time frames, tends to be useless on daily and intraday. And the other way around. That’s why we should focus on two separate portfolios instead of just one. Just to gain a little perspective, let’s look at the big picture:

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If we zoom in, we can see movements that are close to a coin flip. Unless we want to see something special, like an order block. Because the market is created as an auction, open and transparent in the order book. This is an order book:

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We can also see the order book in the chain. And it’s pretty clear that if the order book gets smaller, then the move can be really sharp. Like falling off a cliff. Like the Chicken Game, where two cars go right to the edge of the cliff and they don’t want to jump because they don’t want to be the chicken.

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As you can see, we can use onchain and aggregation tools to maximize our profits. Simply knowing that if A happens we do B and if C happens we do D. But we should adjust our expectations based on the price action, the fundamental events and our strategy. We encourage you to subscribe to our social media to be up to date in relation to all the news and events that happen inside the crypto space.