To be fairly critical now, at this moment the charts for valuation of many of the crypto's are simply crazy and unpredictable. And that can be seen with simple coman sense at this point.
In the recent period for most crypto's we have seen a huge spike, recently followed by a sharp selloff, now going into a sharp spike. This sort of zigzag direction and the volatallity of it should raise some alarm bells in regards to the market psychology.
Ultimatly, prices like these of crypto's which mimick stock charts reflect a certain valuation that to some degree should be understood and to which the volatillety might be a reflection of the uncertainty of information at the moment. When there is a certain degree of economic stabillety, size to a company and importance in tangible activity then company stock prices should remain fairly constant in their movement and trend with few volatillety in price. When economic growth is fairly constant most sizable company's will take a steady trend of stock growth at a relative modest return on investment.
When a stock takes a fast rise and then a steep dive, it should already raise questions of "where were people getting their valuation", but the question only becomes far more difficult when following upon that movement the price takes a quick and steep rise again. At some point people had the psychology to think that what they were investing in was so hot that it was worth to drive the price up that much, then there was a very sudden change of heart for some reason which can easily be the result of bad luck afcourse, Which send the price spiraling down, but then suddently the market changed heart again and back into crazy buy mode.
Try to translate that to example's from the stock market and sure it happens quite often that there is a very sudden change of heart when "very" bad or good news happens and often the reason is a good one that is quantifyable. What does not happen very often in those cases is the return to strong bullish mode after some bear crushing, more than often the stock will trade relative flat for a while and there are market psychological reasons to assume thats reasonable. It's fairly similar to the movement you get when a stock market crash happens or recession hits, it will take time for prices to start to recover and thats reasonable to expect.
What is unlikely to happen in most cases just after a sharp selloff is that prices will return and even exceed the past highs as it would certaintly question the reasoning to have a selloff in the first place and the loss that must have been incured to some with it. What is more likely going to happen is either a extension of the downward trend or a short spike to settle for a while at a lower price a bit higher than the deepest point. That is the situation where the thing is considered to still have value but was believed to be overvalued so it needed correction and then a more gradual conservative recovery pace should follow. There is also something known to the market as a "dead cat bounce" which mimicks more the movement currently seen and that tends to spell out doom.
Eitherway this sort of movement with the vollatilety seen should raise serious questions on the available amount of information regarding any tangible value behind those cryptocoins. At this point the price trend seems to be more about psychology than any sense of transparent valuation with media being the prime mover to such an extend that there could be plenty of immaginable news that could bring the whole crypto market down to practicly worthless . For anyone here who would wish to remain bullish at this point, plz explain to me what spawned the selloff and wether that kind of news is of a nature that it couldn't happen again very suddetly so to drop prices further like a falling brick? Various goverments could move against crypto's and perhaps they could also find very easy reasons/excuses as why they should, and regardless wether a goverments actions will jeapordise the future of crypto's as a whole it likely would be enough "news" to send the prices spiraling down at the moment. So how can one comfterably invest in this withought having the finger at the trigger at any moment? And how would the small fish not loose out against big players that have more advanced knwoledge about news that will make the market move?
