Bitcoin Forum

Considering the novelty and nature of Bitcoin and the promises it holds for the future, versus human psychology and greed which currently controls the trading market, I expect two things:

1. At some point, we'll get a crash
2. In the long term, Bitcoin will rise far, far higher than current rates

When rates start rising extremely quickly, like they did back in 2011, in April, and like they're doing now, more and more people are getting nervous. Whether this makes 'sense' or not doesn't matter, psychology and greed is essentially what controls the price or causes a rise or fall.

Bitcoin rates have been rising extremely fast lately. For very good reasons: tons of Chinese stepping into Bitcoin, market acceptance growing every day, more and more media attention, etc.

However, I think one importent thing that saved us from another crash so far, is the fact that the market is now more diverse. It used to be mainly MtGox and the USD/BTC rate that mattered. Now there's also Bitstamp, to a lesser extent Btc-E, and especially the CNY/BTC trading on BTC China.

When getting close to round numbers like $350, $400, etc, we always see some resistance, or a steady 'sell wall'. What may have helped is for example while MtGox was struggling against a $350 wall, China just kept on ploughing between 2100 - 2200 CNY, and vice versa.

But now, possibly within a few days, 500 USD and 3000 CNY appear at the horizon simultaneously. These are both very strong psychological hurdles. People have made astronomical profits in very short time, and at least part of them will want to cash out or 'secure' part of their investment. Because both the USD and CNY markets are now running into a hurdle at the same time, this may have a big impact. Once panic starts with both currencies (USD and CNY) simultaneously, shit's gonna hit the fan.

Furthermore, there are now LOTS of newcomers in the market. People who barely understand or appreciate Bitcoin, but just look at the graphs and see this as some magic money making trading mechanism.

My prediction: when getting near 500 USD and 3000 CNY, people are gonna start taking profit, huge sell walls will appear at the major exchanges, panic will arise, mass sell offs, and rates are gonna crash similar to April and 2011.

The good news: of course this is only temporary, nothing withstands the enormous promises that Bitcoin holds for the future, and we may see $1000+ in 2014.

Oh, one more thing. First crash was around $32. Second crash was $234 higher (around $266). So logically, the third crash will be... ::)

Around 1870?

what ~498  :o

Well, actually 234+266 = exactly 500, but close enough :)

(no, seriously, this 'math support' is nonsense of course, but I'm serious about the psychological factors at play near $500 / ￥3000)

i think it will go down to about 150

$553? Taking into account that the $32 and $266 bubble are 2 years apart, and the current bubble and $266 bubble only 0.5 years. So that would make (266/32*0.25)*266 = $553 (rounded up) ;)

The other two crashes dropped down about 70%, so from 500 that would be 150, indeed. No idea of this (or any) logic applies here :)

+1

Correct, sir, very sharp. I suggest you hold your coins until around $550 :)

The market shook off yesterday's 10% correction, and while watching it I seemed to me that neither are the buyers exhausted yet, nor are the large sellers successful in signalling each other that this is the big one, i.e. the collapse.

I think we go much higher and faster before a collapse. But I am buying more today regardless because I have faith that prices in 2014 will average well over $1,000.

No crash. Not a real one, just corrections of different scales. The Gox thing can't happen again since we now have multiple exchanges, SR strengthened faith in the currency. It would take something new, and huge, to crash things at this point.

I also feel that the market seems to be far more confident in Bitcoin and the brief correction indicates a boost in confidence perhaps to a greater extent than any bubble/rally could. People, I hope, are starting to realise that if they buy Bitcoin now, as long as they don't do anything stupid over the short term like panic sell those Bitcoins will quickly rise again and surpass the previous value, at least over the long term. I am not sure we should be comparing other crashes to the present as so many factors have changed, however if enough people don't factor those changes into their buy/sell strategy then I guess they become irrelevant.

I think you're right. There will probably be a correction to account for the massive recent rise, but it will not affect the price in the long run and we will be breaking records again shortly afterwards.

Not crash. It will be yet another BEAR TRAP and it will last a day if not just hours. I won't even sell for speculation as it will be real risk to be trapped with all the bears.

It is very interesting that 500 USD ~= 3000 CNY. Definitely agree with this analysis. Should be interesting at that point.

Wouldn't you want to model using an exponential? Like this:
Peak = 32 * (266/32) ^ (T/2) = 32 * 8.3125 ^ (T/2)
where T = the time in years from the 32 peak, so if I check my math we have:
at T=0, peak = 32;
at T=2, Peak = 32 * 8.3125 = 266;
and at T=2.5, peak equals, ummm, 2.5/2 = 1.25 so let me plug 32 * 8.3125 ^ 1.25 into google and I get, ummm, ....

451.66!!! OMG gox is at 440, THE CRASH IS IMMINENT!!!

lol ....

I don't think that equation works. I assume you calculated 0.25 in your equation from 0.5/2. So if we were (hypothetically) talking about a bubble in June 2013, which would be 2 months past the 266 peak instead of 6 months, you would calculate (266/32 * 0.0833 ) * 266 = $184, A bubble one month after the 266 would be $92, half a month after would be $46, etc. These numbers wouldn't make sense.

im ready

ye that's my impression as well.. a 80% crash seems so unlikely, last weekend buy-support came in after 25-30% drop if I'm right.

Sure, I think 80% is exaggerated (we won't see double digit rates anymore for sure) but I'm afraid it'll be significantly more than just a "correction".

And leave $3 in profit on the table? $529.98  (not .99 so I can get ahead of all of those suckers)

Possibilities:

$370: Short daily ema + wall on gox - small correction

$300: Long daily ema + larger depth on gox: -large correction

$230: October trendline + 3d ema + gigantic depth on gox - full crash

if SR fiasco did nothing to the price i doubt it will go down. 50% chance it shoots up at the same crazy rate

You're saying btc is just going to go straight up without any major corrections? Look at the previous bubbles: that doesn't happen - there are always corrections that hit the daily ema. There is a big difference between a news driven panic sale, and a new 3B of market cap that needs to be redistributed.

I don't profess to know what will happen, anymore than the next man. And while i disagree with some peoples opinions, i mostly still hold that they are valid, and people are entitled to them.

But again and again i keep seeing people referring to earlier bubbles and crashes.

I cannot for the life of me see how the current situation can be compared properly to any previous bubble (i'm also getting pretty sick of that word!) or crash (and that one!)

Aren't the causes and reasons different in all cases?? Aren't we into new territory now?? I just don't see how we can say xy&z will happen.. because in 2011 ab&c happened and in April de&f happened.

I don't know the reason for any other bubble and crash apart from April '13 - when there was hype over a rapidly rising price.. a speculative bubble formed.. people wanted in on this.

And the one main exchange Mt.Gox couldn't handle all the traffic. It lagged (badly) people believed it was being hacked.. and panicked. The 'oh no, i knew it was too good to be true' mentality kicked in, the price dropped, people panicked and a massive sell off occurred. That is all. Gox crumbled to the point of unresponsiveness, and already twitchy investors dumped as fast as they could.

Who is to say where we would be now if gox could have handled it. Would $266 have been the top?? Who knows.

All i'm saying is, this can't repeat itself. The market is more evenly spread out / balanced between more exchanges.

So, how can this be 'just like April.. or exactly like 2011'... it's not!! It's November '13

Based on what? Not saying it can't happen, but I have yet to see statements like this backed up by... well, anything of substance. Honestly just seems like paranoia to me.

I hope there is a correction with some consolidation. Gives more buyers confidence that they won't lose all their money, so perceived risk is reduced. I'm sure there is some big money watching these patterns closely.

Also,  I'd  like more coins please... ;D

I'm saying it resembles April and 2011 because:

- rates have been going up incredibly fast recently, which makes lots of people nervous
- market is still greatly driven by greed, rather than understanding and appreciation of Bitcoin for what is actually is
- sentiment, human psychology, and desire of making tons of money (that is, USD, CNY, and EUR) is what dictates the rate

Lots of people have made TONS of profits during the last few weeks (also newbies who are vulnerable to emotional decisions) and there's absolutely no reason why the 'oh no, i knew it was too good to be true' mentality that you mention, wouldn't show up again on a short price drop, possibly causing a panic avalanche.

Don't get me wrong, I regret this, as it doesn't do justice to the brilliant innovative revolutionary technology that is Bitcoin. But I'm afraid it's a realistic scenario nonetheless.

Very pleased to publicly admit my prediction was wrong ;D

At least the first part (about the crash). Still 100% confident about the 'rise much higher' part.

What doesn't happen at the same time though is 500goxdollars and 500 other dollars. Bitstamp hasn't broken thorugh yet.

Probably because they can't log on due to chinese sensorship :P

Correct. My understanding of the natural adoption curves of new technologies is that during the adoption phase (which we are in now and will continue to be in for quite some time) they follow an exponential valuation with lots of superimposed noise i.e. volatility, but that the volatility decreases with time. The peak of 33 in 2011 was at least an order of magnitude over the expected value (based on a post-hoc trend analysis). The April 2013 peak was only around 4 x the expected value of the time. The current valuation based on trend analysis should be about $245, which means that at $530, we are a little over double the expected valuation. IOW, we could still go up to about 1000 (4x expected value) before matching the volatility of April, and still not be anywhere close to the volatility of 2011.

But the second part was depended on pevious crash.
How can you be right here ?  :P