Bitcoin Forum

Why and Who is holding the market from dropping below $14? It is pretty obvious in the last couple of days that something is trying to hold the price from dropping below $14.

Is this manipulation? Is this bitcoin owners trying to not sell below $14 for fear that the bitcoin will go lower? Is it not manipulation and just the free market think it is worth exactly $14.00099 and not $13.99?

no.... it's someone deciding to sell a bunch of coins (470) at 14/ea

Its called trading

One crazy theory has the early adopters (who have LOTS of skin in the game) stabilizing bitcoin.  It's in their interest for this to become a currency, they're not trying to "cash out" quickly.  The theory has them targeting a roughly 100M market cap.

So when BTC prices spike they start selling from their vast stockpiles.  They then use the proceeds to prop up the price if it craters too low.  Three birds with one stone -- they make money, they stabilize the currency and they make bitcoins boring enough that short term "easy money" speculators leave.

It certainly makes sense, but I just don't buy it for some reason.

Simplest explanation: because no one is willing to sell under $14?

I believe it was the Bitcoin Report technical analysis show that recently made the case for much of the early adopter crowd cashing out in a big way during the last ramp and subsequent drop.  Frankly I don't buy the stabilization theory either, that implies some sort of implicit conspiracy and I just don't think the organization exists for that in this community.

Satoshi is doing it, of course. ;D

Actually I think it would be great if it was pegged at 14$ for a while so a person experimenting accepting them wont feel like their losing anything. This will be great for those business that adopt bitcoin

Nice dream but free markets dont work that way.

In the same way US exporters could dream that the USD/EUR, USD/JPY, etc. exchange rates would be stable to plan properly.

Instead, hedging is needed for merchants and traders.

The same is true for bitcoin.

A large, truly free market perhaps.

Here we have essentially one web site, with fewer than 6000 people participating.  Well under 10% of all bit coins generated are on the market.  We know for a fact that 8% of existing coins were enough to drive the price from $17.5 to $01.  While it's a free market from a standpoint of "you can play or not", it's certainly not the ideal description of something trading for "true" value rational actors determine. 

I won't get into the whole existence of a rational actor in the first place, but there are many question marks and pieces of data only SOME of the trading parties have.  And the rest is pure guesswork.  What I'm saying is: the commodity may be fairly valued because we all agree on the value, but the agreement is based on invalid data.  Moreover, there are millions of people in the world with sufficient assets to dictate pricing in this tiny, illiquid market.  And yes, truly free markets do work exactly like that.

The longer I think about this the spookier all of this seems.  This action just isn't natural.  And whenever I see unnatural it doesn't end well for those not in the know (read: me).  If the intent was to get a bunch of cheap bit coins it worked, I've dumped the ones I've been generating & hoarding.  If someone understands investor psych this well and caused me to sell cheaply then they DESERVE the profits.

If I'm right there will be price movement soon enough, it'll be big, and I'll be able to get back in on the action.  If I'm wrong, this is natural and the currency keeps flatlining because demand and supply remain perfectly balanced forever I've lost nothing.

Agreed, and while we're at it, can the bot programmes cut out this nonsense of going to the seventh decimal place? I mean, really? Are we making decisions on .0000001 of a USD???

Can you talk about this?

What happened that you are referring to?

Keep in mind I'm new to this.

We also know for a fact that a currency backed with an over 2 trillion dollars economy (british pound) can be devastated by a SELL of measly 10billion pounds (less than 0.5% of that), lookup Black Wednesday. Meaning that any financial instrument will be completely crushed by a sudden sell of 8% of it's total worth. Bitcoin fared rather well, in fact, recovering and continuing only days after the crash.

The One Exchange, mtgox, was storing their password data in unsalted MD5 hashes, which means any password < 11 characters long might as well have been in plaintext.   Script kiddies got ahold of the account name/email/password database and consequently mtgox's master wallet.  They sold.  One guy got 300k bitcoins at $.01, so in reality 200k bitcoins was enough to utterly wipe out all buy orders.  That's 200000/6800000 or 3% of the float, for those playing the home game.  Alternatively, roughly a third of a million dollars was enough to put the entire bitcoin market into a tailspin.

TL;DR -- a small fraction of a bonus check of a mediocre wall street trader is enough to play the fledgeling bitcoin market like a fiddle.  Which means anyone seriously playing this game is most likely a rank amateur ripe for plunder.

WOW!

That really sucks for MtGox.

Not to mention everyone else.

I guess they had saved enough profit to start up again.

British pound went to less than 1/20th of 1% of its previous value relative to other currencies?  Really?  I missed that part.   Bitcoin recovered mostly because trading was halted for over a week with all assets frozen while people came to their senses but most importantly the actual trade was backed out.  Recovered is relative, it's still down 20% since then.

If someone were actually to sell 200k bitcoins on the market you would definitely see an impact.  Just pretending to have done so caused a pretty big haircut.

I'm not an economist, but I'm also not sure that the volatility and weirdness in the market is that strange. Remember this is why regulation exists in other markets. Manipulation, wild swings, etc. Welcome to the real free market. Not what Ayn Rand told you it would be?

Precisely.  This isn't the kiddie pool.  While tiny, this pool is FULL of seaweed, undertow, jellyfish and floating mines.  While the starry eyed talk about mass adoption this is hardly the place for Grandma to splash around with her floaties.

I realize I sound very negative, but I think occasional reality checks are needed.  Otherwise bitcoining starts sounding like a cult.  Newcomers are all like, "wait, what's this about my balls being lopped off?  I just came for the free Cool-Aid..."

Oh, and mtgox lost very little due to their wise policy of only allowing $1000 in withdrawals per day.  They simply reversed all the transactions and only a few hundred bitcoins were truly "lost."  Less than a day's worth of profit.

Didn't the hackers drop the price to .01 bitcoin so that they can pull out $1000 dollars worth of bitcoin at .01? Which would enable them to pull out 100,000 bitcoin?

That was their theory.  In practice, once again, wisely mtgox used a weighed average over time to compute value.  So no, they only pulled out a few hundred coins.

Had the hackers known the limits precisely they'd have used a multiple account attack.  But they didn't, and that's why we still have an exchange site and a multi-dollar value for bitcoins.

It very well could have, if it weren't pulled off the exchanges (i.e., protection kicked in). Really, 8% is a very serious portion of any economy. Any bank would go belly up if people attempt to withdraw 8% of it's money in one day.

And selling hacked money vs. actually selling bitcoins is absolutely the same from the exchanges point of view. Supply was overwhelmingly larger than demand, getting new money in takes several days, so it is absolutely clear to me - what happened and why it does not prove any weakness in the BTC economy. Just a poor exchange protection.

The number of entities with the ability to short 10B worth of any currency is highly limited.  In fact, I could probably enumerate all of them without trying too hard.  They are statistical noise when talking trading population.

The number of entities with the ability to short $300k worth of bitcoins dwarfs the current ~6000 bitcoin traders.

Greenmail using government backed currencies tends to destabilize efforts of those governments, and they take a dim view of this.  Dim governments with a monopoly on force, courts and jails are why an even smaller % of the entities with the means to do so would.

Greenmail in the BTC market is absolutely risk free.

So, not the same thing.  Comparing BTC trading to currency trading is a stretched analogy at best.

Yet another reason why the price of BTC should not be kept artificially low... the higher it goes, the harder it will become for any one entity to throw the whole market into a spin.

Looks like the $14 support was finally broken. There is a large bid wall (9,000 bitcoins) at $13.5. SInce it has been holding in the $13 range, it should continue its fall until it hits the $13.5 bid wall. I wonder how long the $13.5 bid wall will hold up.

http://bitcoincharts.com/charts/chart.png?m=mtgoxUSD&t=S&height=320&width=750&r=90

We're past the "enthusiasm" and "greed" phases of a bubble. We've had the post-peak bear rally. Now we're in the long, slow slide.

Less than 15 minutes ago there was a large ("fake") buy order at 13.93 for ~750BTC (or maybe a bit more), the order is gone now without even 50 being bought.
https://mtgox.com/code/data/getTrades.php
^^^
The recent trades link will document the lack of major sales at 13.93, but only until newer trades push this time frame off the page

Well, you're almost right.  We need a vastly larger total market cap and a lot more liquidity (maybe even a couple of stable, known market makers) not just a gigantic per BTC price.  A sky high per BTC price in a completely illiquid market would be even worse than the current situation.

This is so exciting!  6 more bids to go until we see whether the 9.5k buy wall is real or illusionary.  Looking at the size of the bids looks like people set them up trusting other similar sized bids will not get yanked.  Wonder how many people are currently getting SMS messages on their phone telling them to check their order. =)

True, but I doubt we'd ever see an absolute lack of liquidity if the price were allowed to rise. There is an almost endless market of people who would love to get their hands on a rising commodity. There will always be miners ready to sell (or at least for long enough as to make no difference). These fake orders are really shooting the whole BTC experiment in the foot.

it does not look like too much people want to sell at this price, anyway. some small sells are triggering the movement now. my prediction - fluctuate to 13.6 region, then go back to 14.x then stabilize back at 14 or even 14.5 depends on how high bulls will take it on rebound.

Much more exciting than yesterday. :)

No way. There are 23,000BTC worth of sell orders below $14.50.

Those are even more fake than the buy walls.  They'll evaporate in a millisecond at the first whiff of capitulation and reversal.  Someone or someones want to spook the market, and they're targeting 6pm eastern US to start doing it.  I'm not the only one thinking one more big panic and we're off to the races, and prevailing current sentiment is just negative enough to pull it off.

What grod said. Once the pushdown is over, those will just dissapear. See, the idea is to scare people down to 13.5, remove walls, start buying => free money once you sell some at 14.5+.

Yes there are.
Some of those are just trying to break even.
A week ago we had huge support at 14 to 13.80. Then the rallies towards $16 slowly got many people to raise their bids. ~3 days ago there was huge support in that same area ~14.30 to 14.40. Now many of those people would be glad to break even, so there is new resistance.



Maybe, but not if we go all the way to $10.25. If so many of those orders will be much lower, not higher.

I don't think we're going there soon. There was zero volatility for several days, people would be glad to buy off 13.6 to make some money on the move up. It does not look like there's a huge selloff planned, of course you never know for sure, but no warning signs.

No one knows for certain.
The brand new current "realistic high" is 13.94, so $10.25 might become a possible low.



zero volatility for several days == Something big is due to happen soon and for now that looks like down, way down, not just $13.50....
I love rallies they are fun, but they happen after a large fall.
The rally up from $11 is now over or not?
^^^
If yes, then we are going way lower fairly soon.

Actually I just bought at 13.80, expecting to sell at ~13.91, and at the moment it is not looking too good.
Buy low, this is a great price, Rally time!   :D


Edit:
Someone is selling ~100 at only 13.85, but it is already half gone.......
Back to 13.92 now  :)

Edit #2
This was lucky IMO:
BTC sold:  9.00 ฿TC at  ~$13.93500


I still say $10.25 (or $6.50 to $7.50?) is very likely in the near future.

And this, kids, is why there are no billionaire chartists.  Not to pick on you, Happy, I think your very short term TA is exactly right, and basic TA is the only thing applicable to bitcoin.  Hell, I haven't even found anything other than volume to be a reliable indicator to confirm or deny my own charting...  That aside, you also know that fundamentals trump technicals.  And here are the fundamentals.

If you look over the time period you've specified you'll see there are no big volume buys at those prices.  In other words, positions were accumulated very gradually by the small fry.  Those same small fry are NOT going to sell those gradually accumulated BTC in $40,000 and $50,000 blocks at once, all of a sudden at the slightest hint of weakness "hoping to break even."  That's not how the small investor mind works when dealing with numbers that big over a time period this small, and savvy investors are not subject to the same motivations.

In other words, I suspect what you're seeing on the chart is "chart art."  Or early adopters starting to edge closer to the exit.  I could be full of crap, but that's my gut feel -- and until proven otherwise, my right-on-btc-till-now gut is getting my attention.

....I think your very short term TA is exactly right...

Thanks


I like both directions, glad to see it's finally moving again.  :)

Well not being held anymore, freaking 8 bux a coin, that is way way way tooo low for quick money or long term compared to the difficulty to create 1 bitcoin now.  AHHHHH ITS GOING TO 0 SOON