In the cryptocurrency and stock markets, almost all technical analysis theories are based on the same three fundamental assumptions. Understanding these assumptions is the only way to truly see through the underlying cards behind the conclusions of technical analysis.

**The First Assumption: Market Behavior Contains Everything**

This idea is like the saying at the drinking table — everything is in the wine. All the words ultimately boil down to one action: tilt your head back and take a drink. The same applies in the crypto world. Macro economy, micro policies, external information, market sentiment… these factors that can influence coin prices and indices number in the thousands, big and small, long-term and short-term, impossible to count. If you try to analyze them one by one, your brain will explode. So, the approach given by technical analysis is very straightforward: don’t get caught up in all that; in the end, all these factors will be reflected in the actual market trend. I only need to watch what the market is doing.

Is this approach necessary? Absolutely. Otherwise, you get trapped, overwhelmed by endless variables, and can never make a decision. Proper simplification is a fundamental principle in any field of research, and in the crypto market, it manifests as these assumptions.

**Problems Also Arise**

Following this logic, the result is — all technical analysis results only work under specific objective conditions, and can never be a cure-all. They are not absolute truths and are not worth worshipping. This is the correct way of understanding.