Technical Analysis

Technical analysis is the practice of forecasting price movements from historical market data, primarily price charts and trading volume, rather than from an asset's underlying fundamentals. Its modern lineage runs from Japanese candlestick charting, developed for rice markets in the 1700s, through Charles Dow's market commentary around 1900.

Why it matters

Technical analysis dominates short-term trading in both metals and crypto. Practitioners read trends, support and resistance levels, momentum oscillators like the 14-day RSI, and moving averages such as the 50-day and 200-day, whose crossovers generate widely reported signals. Academic finance is largely skeptical, since weak-form market efficiency implies past prices should not predict future ones, and rigorous backtests of classic patterns show mixed results at best. Yet the practice persists partly because it is self-fulfilling at focal points: when thousands of traders place orders around the same trendline, the line acquires real force.

In crypto, technical analysis is supplemented by on-chain analysis, which reads the blockchain itself, tracking dormant coins, exchange flows, and holder cost bases, a data layer no traditional asset offers.

In the gold vs bitcoin debate

Gold and bitcoin are unusually chart-driven because neither generates cash flows, so there is no earnings anchor for valuation, only supply schedules and monetary demand. That vacuum makes narratives and technicals unusually powerful in both markets. Long-term allocators in each camp tend to dismiss charting entirely, arguing that the monetary thesis, not the pattern on a screen, is the position.