I have to admit that I don't trade BTCUSD, but the reasons why I don't go back to exactly the title of this thread, namely the question towards
reasonable strategies (and the possibility to have an edge) in this market.
So here's why in my opinion crypto currencies are different:
1. They have no inherent value, meaning: all currencies basically are just numbers, but conventional currencies derive
their inherent value from the fact that they are broadly accepted as payment; of course, they could be replaced by something else (yes, also
by Bitcoin for example), but it is practically impossible that this happens from one day to the other, so as long as such changes take at least a
little bit of time, conventional currency have a monopoly status in their economy, which is why they can't dissappear at least not
tommorrow. Crypto currency on the other hand are really just numbers. Although they are sometimes accepted as payment, this usually is only
an option and it is not without alternative (normal money could do the job just as fine). So although Bitcoin might be a great idea and maybe it
is the future, the inherent value just isn't there YET.
2. They have no underlying fundamentals, meaning: BTC is largely independent of the economy both on a global and national
scale (once you substract the USD influence in the BTCUSD pair). Even if trading happens on technicals entirely, the hypothetical
assumption that price moves are not purely random still justifies the question if fundamentals that drive the price do exist. For BTCUSD the
answer clearly is NO.
3. A handful of big players are able to manipulate the price, just because they own significant proportions of the
whole cake, and nobody knows how their actions will affect tommorrow's BTCUSD price, so while there is no edge (at least not without
illegal(?) insider information), there is big risk involved (which of course is also true for the relationship between
conventional currencies and Trump's next tweet...).
4. They rely entirely on sentiment, meaning: if true value, political events, economical processes and other fundamentals
don't drive the price, then what does? Just the fact that people attribute conceived value to this currency. It's just goes back to people's
belief and expectations. In on word: sentiment. So this is why I think that IF anybody is willing to trade BTCUSD, than some kind of sentiment
analysis specifically on the crypto market is the only way to go (and NOT
in this case).
Other opinions? [....sentiment? ;-) ]
BTC is very technical when it's in ranging cycle. The problem is that BTC do a lot of unexpected strong breakouts.
As for all markets... there is not the best strategy but there is a good strategy for each market phase.