Bitcoin Forum

Hi all,

I'm anxious about current price formation. For one, MtGox is once again showing tremendous lag (about 1 minute, that's just insane). Something seems to be fucking up their systems again. Even though big orders came through just during the last minutes, those participants were not able to push the price above $123 / $124 per BTC.  [edit : I see the lag is now back to normal, but clearly something was going on around the $123 level ]


http://imageshack.us/a/img853/6358/92943265.png


NOTE: this happens at an inflection point in the chart (the downward sloping trend line).

But most important of all, what I'd like to point at, are the volume characteristics of recent. These volume characteristics are definitely NOT healthy. For if a trend remains in tact, VOLUME should always support PRICE movement. After the initial crash ($266->$50) we've seen a wild rally back to $160. That was on decreasing volume compared to the volume during the preceding shake-out (but OK, it was a shake out). The 2nd part of the rise to $166 acutally showed an increase in volume, a peak, and falling volume on the price decline $166 -> $120. That would have been a positive, if only... the price would not have broken down again (all the way to $79) on an increase in volume.

That latest increase in volume (on a price decline) was already a negative for any price appreciation.  To make things worse, however, the recent upturn, from $79 to $124 today, is happening on considerable smaller volume. In other words, volume does not support the recent price appreciation either.


http://imageshack.us/a/img835/9416/chartro.png


Given all of these circumstances, the most likely thing to happen is another leg down (full disclosure: for that reason I bailed out of my entire position).
If the new leg down materializes, it can easily set BTC back into the range of $50 - $80. That would hurt.

Expect massive selling (and unreachable exchanges  :-\) if that happens. Should all this not materialize, I'll be happy to buy me my bitcoins once the markets looks healthy again. Be it at a higher price, I'm perfectly okay with that since that would greatly reduce my risk. Right now, the market simply does not look healthy.

"And hey, listen... be careful out there"  ;)

Cool story bro.  There's a whole forum for this.

And the sky... She just might be falling.

I don't know that ;) and neither am I claiming BTC will die. I'm not a BTC basher. On the contrary. But when it comes to be "in" or "out" of a market, I am not willing to take unnecessary risk.

Currently, the risk vs. reward to hold on to your BTC is not good at all IMHO.


(BTW, a falling BTC price would by nature be more likely than a falling sky  :)  )

Errr... sorry if I posted this in the wrong place.
You mean the "market" forum or so?

Hey, it's the risk you take with Bitcoin. I just generally think it will always rise up again.

Speculation: https://bitcointalk.org/index.php?board=57.0

I hope to see another drop. I waited all weekend for a buy opportunity and it just kept going up.

Yes, I am fully aware of its ups & downs. The only question is: will it start moving up again from current $120 or from a far lower point? It's all about perspective. Price wise, and BTC-holder wise. If you're one of those very early adopters buying in at $1, $5 or so I hail thee for having a better and early insight into BTC than I ever had. Then that's definitely good for you & thumbs up  :D

Thanks for that, will keep it in mind for next time!

Here is some extra analysis - mainly using PRICE action as a starting point.
However I twist this thing, I just happen to see red flags everywhere. Until they are resolved, I'm out.

I definitely expect you will be able to get into BTC at a more favorable rate.
I'm not in for doom & gloom, but I will be re-evaluating my stance at these levels $102 - $97 - $80 - or beyond

http://imageshack.us/a/img822/1121/chart2x.png

That depends... A sky is a collection of water vapor, when it gets dense enough it falls in the form of rain/snow/hail.

Appreciate the analysis, OP. I think you're reading maybe a bit too much into the 'volume doesn't support price action' bit... you have a point there, but it looks relatively minor to me, but the conclusion you draw is rather drastic (selling your entire btc position, if I understood you correctly). Nonetheless, I see things similar to you: we'll probably see another drop soon, but not much below 100, if at all.

There was low volume because it was a weekend.

His argument, if I understood it correctly, was not the overall lack of volume, but that volume did not correspond with a positive price development, e.g. when price went up, volume was low, and the only times when volume was comparably high, the price went down.

Things have been kinda funky lately. The fact we went all the way to 50 is what amazes me most. It's not like I think we'll ever see that again but all we have is history to look back to with BTC. Who knows.

I don't know what you are talking about.

The volume does not look any different than normal.

And you have offered no evidence that the price is going to drop other than voodoo TA BS.

The price is going to $150 by the end of next week at the latest because of the news from China.

That's already priced in. If it goes to $150, that will not be the reason.

It got moved..... Boy am I glad we have you to set us straight ::).

https://bitcointalk.org/index.php?topic=197045.0

$50-$80 would hurt?

Cheap coins never hurt.

That is a correct understanding of my words: if a trend is supposed to be sustainable, it DOES need proper volume. Even BTC  ;) cannot defy those market rules. You can see this happening in different time frames - 60 minute, hourly, daily. Therefore, I simply don't trust this market under current conditions. Also price action itself (should BTC crazily enough not adhere to any volume laws) is not giving me confidence enough to "stay in". (See second chart, please)

As said, I am not into gloom & doom. But I'd expect to see prices dropping to $102 - $97 - $80 (for a re-test) or maybe even a re-test of the panic low at $50. You see, I tend to disagree with you on the fact that I am reading too much into volume. In the long run, volume is everything. To a long time holder, and even to a speculator. There will simply not be a sustainable price advance if volume (=people wanting the freakin' bitcoin) is not there. AAPL is not bidded upwards if there are no buyers, Gold is not bidded upwards if  there are no buyers. Etc. etc. etc. The same goes for BTC in my opinion. Market laws apply to BTC as well.

What exactly is wrong with volume again? Looking at the monthly chart and considering that it was a weekend the volume seems fine. Moreover, looking at the hourly monthly chart, it is not the case that volume increases when price goes down. In fact, it's the opposite.

There was a definite pump and dump involved in the recent rally.  A wall of about $2m that moved up from $100 to $110, staying enough behind that it did not buy any actual bitcoins, and then smaller but still sizeable moving walls as the price approached 125.  That's not usually a great sign.

I've been looking at the market wondering what is going on too. The price seems to be cheating gravity at the moment. There seems to be a complete lack of support and then a monster order comes in on MtGox to keep the price up, just as the market is about to turn too.

I've been wrong many times, mind! :)

I'm sure you agree that the relevant volume here is USD (since that's the ressource we need enough of to maintain or raise btc price). Hence: "Volume in currency" in the following chart:

http://bitcoincharts.com/charts/chart.png?width=967&m=mtgoxUSD&SubmitButton=Draw&r=120&i=Daily&c=0&s=&e=&Prev=&Next=&t=T&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=1&cv=1&ps=0&l=0&p=0&


Looks good to me. Between 2 and 5 times as high as in March (when the price approached 40), and 10? 20? as high as in January, February. Maybe not the volume to support a price in the multiple 100s, but enough to support 100, 150? Why yes, looks like it to me.

How could that be priced in? It only happened a couple of days ago.

That chart should not inspire confidence in anyone with bullish expectations.

http://www.oftwominds.com/photos09/anatomy-bubble.png

Was it a bubble? We'll see. It sure looks like it. But, hey, maybe it'll be different this time!

There is something that the chart does not show. Bubbles are most well known in the stock market. The chart shows a classic stock bubble, but is that comparable?
With a stock the money from investors is needed to operate the company offering the stock. When the value reaches a critical low and the company becomes insolvent, it all goes to hell. Bitcoin is different. It does not need the money to operate and the price can fall or rise without destroying it's utility. No matter how low it goes, it could go up again. Not true of stocks, bonds, derivatives and most other financial instruments. The closest asset in terms of behavior may be gold. Gold has seen countless bubbles in the last 4000 years, and is still able to set new highs.     

The China news has been out since May 3rd (CCTV broadcast). I, too, think that -in the end- a China participation will be beneficial. Yet, I look at the market itself instead of hyping TV stuff. It should be noticeable in the market. The market is up since May 3rd, hitting resistance. On low volume.

The fact you call tech analysis BS is up to you. Voodoo I leave up to others.
But obviously, this isn't for you. Let's be polite and leave it at "everyone is entitled to his/her own reading of reality", shall we?

Hype means more than anything for bitcoin price right now. Since there are no traditional fundamentals, bitcoin is only about hype. It is almost a pure bubble. Thus what appears in the newspaper means everything to bitcoin right now.

I actually like to see the TA posts here. Kind of like reading my horoscope in the paper from time to time. It is interesting stuff but I have yet to ever see it back by real evidence than it ever works.
If you post it though, expect people to tear it apart if they disagree.

i don't respond to the TA posts in order to start a fight or to piss anyone off. I worry about the newbies who will buy into it without doing their due diligence.

As I see it , it would take what you call "a black swan event"  to stop the uptrend ( a fault in the algorithm or the US making bitcoin Illegal).
You are looking on such a small scale. Pull the scale back to 1, 2 ,3 years... we are right on track.

I said short-term. Long-term still looks good, I agree.

Most stocks are shares in a company that already have operational founds, and it's really about the valuation of the firm as it is. A high stock-price will help a firm to get good lending deals etc. but they don't use the stock market as a "cash pool".

Yes, in the long run volume is higher, that is correct. But that would be reasoning from a "buy and hold" long position only. Yet, the chart is confirming my chart and point of view: the intermediate swings that you see show higher volume on falling prices, and lower volume (compared to the previous price drop) on price appreciation. Just look at it in a bit more detail. Otherwise, I just rest my case, but had hoped to point you to the "internals"  ;)

Right, the funds are not necessarily directly available.  But they are are often needed to operate and provide higher valuations to secure loans. But at some point if the value falls to much the company may hit a cash crunch and not have the collateral to take on new debt. If they crash the stock will be worthless. Bitcoin could loose popularity and become less valuable, but it is not going to go broke and could always bounce back.

Looks like we're in agreement then.

Also, your post gave me an idea: I am wondering now if there is a detailed comparison between trade volume in USD and bitcoin price. The bitcoinchart rendering doesn't give me what I want, and a quick Google search didn't help either. So I downloaded the raw data from bitcoincharts and will see if I can run a correlation test on it.

Because upon hearing that news, speculators drove the price up accordingly.

:)

thanks for the post OP

helpful...

I'm into reading TA but don't understand all of it yet.


I would argue that low volume on an uptrend makes sense though if the done thing to do with bitcoin is buy, and hold. Sellers are more and more reluctant to sell at market prices so the bidders have to reach further. Does that make sense?

I sold some, so let's hope this become a self-fulfilling prophecy, you know, just like GS's gold call  ;)

We miss you!  :'(

Proudhon's trying to quit the speculation subforum cold turkey, so he got irritated when he saw this in Bitcoin Discussion.

cool,I get it!

this is what marriage feels like. fighting.

LOL

I understand what you're saying, but I cannot think of a way for that to hold true. You see, the sellers are actually NOT reluctant to sell. They are willing to sell at much lower prices. Big time. That constitutes the legs down. During those declines the buyers are not powerful enought to stop it. During those relief rallies that you are referring to, the price is indeed bid up on light volume. As such, I read that as luring buyers into the markets (well, granted: the buyers decide for themselves that "the worst is over"  ;) ) . Only to see the market crack once the heavier volume (selling orders) come in again.  You would need much higher market participation of buyers in order to really be able to reverse the down trend. Otherwise, the relief rally will fail.

In essence it is about this: the basic universal law of supply & demand apply to this BTC market.

For those that might be interested: here's a quick update on how I look at the current market, after we got the decline I anticipated.

Are we done yet? I suspect we are not, and expect we're heading for the 80-ies instead. At this point in time, almost all signs point to much further selling, and boy... there is indeed selling going on. The only "positive" might be a positive divergence that sets up in the RSI. However it is NOT confirmed. Only if the downward sloping short term trendline is taken out, things may turn a bit for the better. BTC has room to $108/$107 in the coming hours while still remaining in the down trend.

First the proof, then the action. So I remain out of this market.

http://imageshack.us/a/img692/9757/chart3t.png


_{A penny for my thoughts? Then drop me one  :D at 15S4zBMzP23hHWZNFndYaM3KYeLRUkZ8Qs}

action happened
went to 116,78
next stop should be 105-107

what do you say?

Thanks for the update, will keep in mind.

Yes, I've seen the price improvement happening as well on the hourly chart. Volume characteristics on the hourly chart also improved a bit, in line with the earlier positive divergence in the RSI. That short term downward trendline was broken, now price is creeping towards the downward sloping trendline of a higher degree. I'm watching the price action closely, as the price moves towards that more important downward trendline.

Yet, on the daily chart, the internals are still not positive, to turn me around.  Markets like these (and especially BTC  ;) ) can take you by surprise indeed. Either to the upside (though still don't expect it) or to the downside in a nasty and swift move. Either way - too risky for me at the moment, so I'm still out.

i get excited by thinking of buying more coins @32 to 50$

... but normally not having that much luck  ::)

最近还有作品吗？

Now newbies can immediately post anywhere? This forum would soon become an even dirtier shithole than it is now  ???

I agree with OP.