Last night was surprising for many people. Feds raised interest rate by 75 point but cryptomarket just kept going up like it was nothing. It was not the first time that it seemed like market is just acting crazy. Ofc there are some people here who know much more than others but overall it seems like nobody knows nothing.
But why predicting the market is so difficult?
Delayed or rushed effect: Sometimes it takes a while for market to react. Other times market response to something even before it becomes reality. Like when market expects something to happen.
Expectation against reality: Few years back Facebook fined 5 billion dollars by FTC. And share prices surprisingly went up! (By a total of 10 billion!) Link .why? Because apparently shareholders expected worst! A bad news which is better than anticipated outcome might be an actual good news.
Long term vs short term effect: Take federal rate hike. Short term it usually doesn't sit well with the market. But If it actually manages to tame inflation it will benefit the market in long run. And if it causes a recession, market will be doomed.
Apophenia: This fancy term is used to describe human tendency to seek patterns when there is none. You see it many times at this same forum. Like people thinking BTC will not dive past certain price because ot "historically didn't."
Masking effect: Sometimes a lesser effects "hides" behind a much bigger effect. Think about all of good news we heard while market was crashing. They are still there. But masked behind a much bigger force. For example of recession hits the market I highly doubt anything else gonna have any meaningful effect on the market.
Taking all of this, plus things like mentality, invisible players and hidden effects into the account it is not surprising that market is acting unpredictably. Or as people love to shout it here "nobody knows shit about fuck."
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