Re: Who truly moves the market— price action, or the news itself
Does technical analysis precede the news? Who truly moves the market—the chart and price action, or the news itself?
I did some digging, and I hope you find the answer in this post.
Some of you may already know Dow Theory’s First Rule:
This is the essence of Dow’s first rule—price action is king.
News, reports, and predictions? They’re just late reflections of what’s already unfolding on the chart. Price moves first, and the news comes later to justify it—not the other way around.
Let’s put this theory to the test.
I conducted a simple analysis of crypto charts that crashed due to news events. Here are the prime examples:
1 - Bitcoin Crash Due to COVID-19
Two days before the crash, a Head & Shoulders pattern had already formed.
Any seasoned technical analyst would’ve opened a short position right before the collapse.
2 - FTT's Crash Following FTX Bankruptcy
The chart had already printed a descending triangle—a textbook bearish formation.
Any technical trader worth their salt would have spotted it and shorted FTT before the collapse.
3 - LUNA's Catastrophic Fall
Not one, but two bearish patterns showed up:
A rising wedge (bearish)
Another Head & Shoulders formation
The Common Thread?
These crashes were predictable—not the entire meltdown, but at least the bearish sentiment and downward momentum.
Anyone who lost money might have saved their capital—or even profited—if they had technical knowledge.
What do you think?
I did some digging, and I hope you find the answer in this post.
Some of you may already know Dow Theory’s First Rule:
This is the essence of Dow’s first rule—price action is king.
News, reports, and predictions? They’re just late reflections of what’s already unfolding on the chart. Price moves first, and the news comes later to justify it—not the other way around.
Let’s put this theory to the test.
I conducted a simple analysis of crypto charts that crashed due to news events. Here are the prime examples:
1 - Bitcoin Crash Due to COVID-19
Two days before the crash, a Head & Shoulders pattern had already formed.
Any seasoned technical analyst would’ve opened a short position right before the collapse.
2 - FTT's Crash Following FTX Bankruptcy
The chart had already printed a descending triangle—a textbook bearish formation.
Any technical trader worth their salt would have spotted it and shorted FTT before the collapse.
3 - LUNA's Catastrophic Fall
Not one, but two bearish patterns showed up:
A rising wedge (bearish)
Another Head & Shoulders formation
The Common Thread?
These crashes were predictable—not the entire meltdown, but at least the bearish sentiment and downward momentum.
Anyone who lost money might have saved their capital—or even profited—if they had technical knowledge.
What do you think?
News events has more effects or tendency to move the market in a dramatic and drastic way than price action do, during a news event, everyone seems to be taking same side action or doing same thing at same time, either by FUD or FOMO, thereby bringing a drastic shift in the price of an asset or imbalance in liquidity.
Causing