Bitcoin Forum

Here are my thoughts regarding the November 2013 bitcoin bubble.

To the extent that comparing the two previous bubbles with this one is useful, here is a comparison with regard to price doubling times, using MtGox USD data.

**** Bitcoin Bubble 1 peak occurred June 8, 2011 ****

The way up ...
 0.498 January 31, 2011
 0.997 April 15 2011 - doubling time 74 days
 1.99 April 28, 2011 - doubling time 13 days
 3.98 May 10, 2011 - doubling time 12 days
 7.97 May 13, 2011 - doubling time 3 days
15.95 June 4, 2011 - doubling time 22 days
31.90 The high on Wednesday, June 8, 2011 - doubling time 4 days

https://i.imgur.com/BI317Zx.png

**** Bitcoin Bubble 2 peak occurred April 10, 2013  ****

The way up ...
   4.16 December 19, 2011
   8.31 July 16, 2012 - doubling time 210 days
  16.62 January 21, 2013 - doubling time 189 days
  33.25 March 1, 2013 - doubling time 59 days
  66.50 March 25, 2013 - doubling time 24 days
 133.00 April 3, 2013 - doubling time 9 days
 266.00 Wednesday, April 10, 2013 - doubling time 7 days

https://i.imgur.com/y1gNbig.png

**** Current Bitcoin Bubble 3 ****

The way up ...
  65.42 July 4, 2013
 130.84 August 29, 2013 - doubling time 56 days
 261.68 November 5, 2013 - doubling time 68 days
 523.36 November 16, 2013 - doubling time 11 days

https://i.imgur.com/krCAJXb.png

If the pattern of the two previous bubbles holds, we might expect one more doubling with the peak very roughly around $1000. Likewise we might expect to see the peak next week, doubling from 523.36 in perhaps only 7 days.

Major posts in this thread ...

• Countdown to the peak - Monday. (https://bitcointalk.org/index.php?topic=337261.msg3624329#msg3624329)
• Countdown to the peak - China doubling faster. (https://bitcointalk.org/index.php?topic=337261.msg3626401#msg3626401)
• Looks like 901 was the peak on MtGox, Monday, November 18. (https://bitcointalk.org/index.php?topic=337261.msg3638573#msg3638573)
• Recall that we waited 6 days for the bottom in the April bubble. (https://bitcointalk.org/index.php?topic=337261.msg3649781#msg3649781)
• Onward to a new peak. (https://bitcointalk.org/index.php?topic=337261.msg3725235#msg3725235)

Your thoughts?

I agree there will be another drop sometime before the end of the year, though how high will it go in the mean time is what I am wondering. I may not be able to buy bitcoin at these prices again even with a drop.

Sounds good to me! This price is like the Energizer Bunny: "Still going!"

Thanks for the great research.

I was a part of the runup in 2011 and failed to sell when it dropped. Hopefully I'm more the wiser.

But if this is following the S-curve adoption rate of new technologies isn't there a point in which the price just shoots up without any "correction?"  Bitcoin is not a stock and will not act like stocks do necessarily.

In the April 2013 bubble collapse, it was possible to buy at under 30% of the peak price - either with great timing or as I did with a spread of pre-positioned limit buy orders. If the peak indeed is above $1000 I believe that prices after the collapse could likely be below where we are now, i.e. below $568.

I am not trading this bubble, rather I may buy a few more coins after the collapse.

Maybe the time is now, probably it isn't.

My logistic (S-Curve) adoption analysis over on rpietila's economics thread is about a multi-year price prediction neglecting, or rather smoothing out the bubbles. I hope, but do not yet expect, that future bubbles will become smaller and more frequent.

I'm sorry but I can't take you seriously if you're still using Mt. Gox prices.  It's well known that Mt. Gox has inflated prices (pre-dating the bubble) due to the fact that fiat withdrawals are limited/impossible.  Start using Bitstamp or an average of different exchanges (exlcuding Mt. Gox) for a much more accurate price.

I am sympathetic to your viewpoint, but my analysis back in April 2013 used MtGox prices. I suggest that MtGox has a proportional relationship with USD prices posted on BitStamp. Furthermore, the greater potential error in my analysis is not using BTC China data as that exchange is obviously responsible for the current price action.

good point.
i'm far from being an expert to get the whole picture, but i read an interesting pdf on zerohedge today that draws a comparison to the longterm gold chart and microsoft shareprice.
http://www.zerohedge.com/news/2013-11-17/bitcoin-rises-over-500
pdf written by Raoul Pal, head of the Global Macro Investor.

I saw the original analysis, and I generally agree except to substitute the figure for investment gold bullion for the valuation of the world's total gold, the latter having jewelry and industrial uses which bitcoin cannot match.

I really think this are different this time around. The world of BTC is vastly different, and larger, than where it was at the last 2 bubbles.

I'm guessing a correction is coming but I do not expect this time around that there will be a huge crash, and I don't think we'll go under $200 again. I think the new bottom will be around $350.  Anyone's guess. I do feel pretty confident though that even if you bought it today at 525 or whatever crazy price it's at, and you can be patient, you'll be able to sell it again for this price after this 'bubble' has come and left.

Especially with the Chinese loving BTC these days, and no more shackles to Can't-handle-the-transactions-gonna-crash Gox, the potential for a sharp quick price-plummet is not nearly as there as it was just 6 months ago.

Yes, the greatest error in my previous analysis of the April 2013 bubble was comparing it too closely to the one other bubble in June 2011. I agree that drawing comparisons too closely to April will bias predictions for this bubble. None the less, it took only 16 hours to go from $475 to $575 on MtGox. This is very similar in nature to what happened in the week leading up to both prior bubbles.

Countdown to the peak - Monday

Using MtGox USD daily prices, the Sunday open at 458 and close at 528 yields a daily increase of 15%. Likewise today's 618 high so far yields a potential daily increase of 17% with trading volume increasing.

The 1000 price milestone is only 61% higher from 618.

Using the two previous bubbles for guidance, these are signs that we are only days away from the peak.

https://i.imgur.com/aWl1v20.png

The 3 bubbles:

2011
http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=60&i=&c=1&s=2010-06-03&e=2011-06-03&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=1&cv=0&ps=0&l=0&p=0&

April 2013
http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=360&i=&c=1&s=2012-04-08&e=2013-04-08&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=1&cv=0&ps=0&l=0&p=0&

Now
http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=360&i=&c=1&s=2012-11-24&e=2013-11-19&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=1&cv=0&ps=0&l=0&p=0&

Log & volume as currency:
2011: http://bitcoincharts.com/charts/mtgoxUSD#rg60zczsg2010-06-03zeg2011-06-03ztgSzm1g10zm2g25zvzcvzl
April: http://bitcoincharts.com/charts/mtgoxUSD#rg360zczsg2012-04-08zeg2013-04-08ztgSzm1g10zm2g25zvzcvzl
Now: http://bitcoincharts.com/charts/mtgoxUSD#rg360zczsg2012-11-24zeg2013-11-19ztgSzm1g10zm2g25zvzcvzl.

Stick those in OP if you're making that sorta thread.

SS I agree with your analysis. I get the same feeling. And if you look at growing volatility with bolinger, that tends to confirm. We tend to drop after daily bars extend significantly outside. Sorry for the big chart.


https://www.tradingview.com/x/Fohe2EHF/

Done! And thank you very much.

We love charts in the Speculation forum. I have not paid much attention to the Bolinger technical indicator, and I really appreciate your insight regarding outliers as a signal.

Excellent. Keep up the good work.

I concur with this analysis.  I see this bubble popping within the next few days to a week

Countdown to the peak - China doubling faster

Using BTC China data presented by BitcoinWisdom, I observe these price doubling times ...

400 ¥ on  July 5
800 ¥ on August 31 - 57 days to double
1600 ¥ on November 5 - 66 days to double
3200 ¥ on November 16 - 11 days to double

More convincing evidence that the peak is at most just days away.

Here is the logarithmic chart, which clearly looks parabolic ...

https://i.imgur.com/sH5jdYj.png

If within 6 hours we'll see a head and shoulders pattern, then IMO the peak was today.

But where will we land? Back to $150 or a new level like $400?

So far, significant support seems to be at 210$ - 250$, but those could be pulled if 100k coins flood the market, like in April.

Your very important point is worthy of time-is-short discussion.

I think that the months-long resolution of this peak will be similar in shape to the April peak - that is a damped oscillation, technically a triangle pattern. The initial crash will be characterized by a flood of sell orders beyond the capacity of exhausted buyers to counter, with an extreme bid/ask spread. Support will be found at much lower levels with an immediate rebound off the bottom. Indeed, if the comparison with the April pattern holds, then the price should bounce around for weeks and settle at a price approximately halfway between the peak and crash price.

If comparison with April holds, then we'll have several capitulations in the 120$ - 150$ range, and several intermediate highs in between.
But in April there were about 40k coins for sale when the 100k flooded. Now with only 12k coins, a 100k coins flood could crash comparatively harder.

$120? yes please, but my hopes aren't high for that. maybe if this right here is the top. maybe. i don't think this is the top though.

Imagine a bell curve of expectations for the date of the peak price. Given what I am feeling now, my expectation is that Friday is the most likely date. The price always seems to go higher than what most traders expect.

Interesting thread. After rise we've had today, I would assume we are due for a correction (at least historically)

Great analysis... very good to read this thread after only being involved in Bitcoin for a few months.

Wish I would have got more in April when I first discovered it.

Looks like 901 was the peak on MtGox, Monday, November 18

Half of 901 is 450 and that price was reached on November 14, yielding a doubling time of 4 days at the peak. This is consistent with the previous two bubbles and becomes a very important indicator when guessing the peak of future bitcoin bubbles.

I expect the resolution of this bubble to be a damped oscillation from a high of 901 to a bottom of 502 as of now. If this bottom holds the midpoint of the resulting technical triangle pattern would be 701 and that is where I believe prices are headed.

Because the low of 502 is higher than much of the sentiment on this forum, I suppose that this bubble collapse is milder than the one in April and perhaps will recover to a new bubble soon. The length of my expected triangle pattern will give some idea of when the next big rally will occur.

If 502 is the bottom of the November 18 bubble, here is the sort of resolving technical triangle pattern that I expect ...

https://i.imgur.com/I5cAqa4.png

I drew the horizontal length of the triangle to reflect my observation that this bubble so far is milder than the previous two great bitcoin bubbles, and may indeed turn out to be a big correction on the path to a greater bubble.

So far it's been amazing how accurate the general sentiment on this forum (I mean the general sentiment of the relatively oldtimers and some other astute ones) has been been on this surge. Between the markets' shrugging off the SR shutdown, plus China, plus the BIT, plus intense and way more positive media coverage, a big rise was very very predictable and many were predicting it (including (https://bitcointalk.org/index.php?topic=178336.msg3419360#msg3419360) me (https://bitcointalk.org/index.php?topic=301650.msg3246660#msg3246660) myself (https://bitcointalk.org/index.php?topic=310587.msg3337883#msg3337883)).

On October 14th I posted the following reasons why the price was about to surge:


To me it was the easiest call ever, and I said as much. Many people who I recognized from the early 2013 bubble were similarly confident in an imminent price rise.

Surging up toward $1000 was considered quite bold but many here predicted it nonetheless, with a correction back toward around $500 then settling in between, and that looks like exactly what is happening.

Then now, by looking at the log charts and seeing when the moves look exponential even on the log chart, when they start curving upward, most of these same people have been able to anticipate the imminent correction this week.

One thing about a market with more mature, experienced investors is that it is less volatile. They are waiting to damp the tops and catch the bottoms. Now with the newbie China investors here it still gets dicey, but I feel like the oldtimers are doing pretty well holding the fort down.

As to where we'll go from here, since we had a nice big correction now it seems we'll do the familiar dragon/alpaca pattern, which is basically oscillating in the triangle SlipperySlope drew above and then maybe some steadiness before going higher. I think there is yet more steam in this run-up, but double exponential growth cannot be tolerated, not even in Bitcoin. Bitcoin likes exponential growth, which is insane enough already.

Agreed. I too look for the remarks of old timers on this valuable forum. You nailed it.

Regarding the exponential growth rate, it works out to about 0.59 % per day - awesome.

+2 to all the above. And thanks for the thread.

The bubble and consolidation pattern now seems somewhat familiar. And I would tend to support the observation and expectation that with more sophisticated players in the market, the bubbles may be less violent or damaging with faster consolidation. Looks that way on the log chart. We will see.


also just want point out that the bollinger bands worked outstandingly as an additional confirming/timing signal for bubble topping (both on the daily and hourly charts) - same as back in April. When more than 50% of the current bar is beyond the 2nd Dev, we are done and can not sustain. Between that and the curving up on the log chart, we have two strong tools to navigate. ..of course until the market tells us different.

They already are, in a way.

* June 2011 peaked at 7x the value it had 1 month before and then dropped by 90% at its worst.

* April 2013 peaked at 5x compared to 1 month before and bottomed at 70% less.

* November 2013 I would've expected to see peaking at about 4x, but China helped it do 5.21x again, so another -65%, -70% movement is possible now.

These sophisticated players have messed up the world markets time and time again, I expect they would happily take 90% drops

A new post bubble low of 475 was recently reached on MtGox, so the bubble is not yet fully collapsed.

how have I missed this thread

lots to agree with here

Great thread with good accuracy! Respect you called it right.

Here is some contribution of mine. I would say your approach is better because it is universal, while I was trying to make out indicators of the final stages of a bubble by looking at it graphically. The disadvantage of it is that you have to accomodate bubbles you want to compare in the same image to keep the ratio. Read all about how I did it here: https://www.tradingview.com/v/sptX03Sf/

https://www.tradingview.com/i/sptX03Sf
https://www.tradingview.com/v/sptX03Sf/

Update: The Final trend line (not in version of upper picture) turned out exactly 83.0° and is typical for the last slope increase before collapse. It started from 498$ and was finally crossed by the falling candle body at 706$. The candle closed below the trendline, which is, if you read my methodoligy beyond this link  (https://www.tradingview.com/v/sptX03Sf/)cryteria for calling the burst. I have to admit anecdotely that I sold at 580$, not going all the way with my method. I could have gained another 20%.

I like you post and most of it is true. However, we are testing support at $500 (Gox) and that looks like it very well may not hold.

If that support does not hold then we could be on a slower drip down.  It looks at least like we are not going to consolidate in the 700s, so I do not think we will be going up to new highs in the next couple of weeks. Of course, I could be absolutely wrong. But right now, I'd take that bet that we are going lower for a while (not like in April) before getting our legs back. And the longer we go down, the longer its going to take us to go back up. We very well might not see ATHs until 2014.

Degrees of Craziness indeed. I believe that we are both measuring the same phenomenon.

There is actually decades-long financial science behind this sort of bubble analysis: http://arxiv.org/abs/cond-mat/9903321 (http://arxiv.org/abs/cond-mat/9903321). The theory is that the crash hazard rate rapidly increases at the bubble peak, and that is what we are indirectly measuring via your angles, Bolinger outliers as described above, and my own doubling duration times.

Agree with your interpretation of overnight price action. Perhaps other commentators would too.

Although BTC China has been trending down towards their post-peak low, this recent down leg was propelled by large sell orders on MtGox.

After looking at the 2011 bubble charts, and the similarities with the current bubble popping, I am getting pessimistic.
That 2011 bubble took a long time to fully deflate, and when it did, it was at 15x less than the peak. I hope this one won't be as bad.

You mean less than $60? That will be scary, but in the same time wonderful if you want to increase your holding.

I'm not saying that it will go that low, but it's possible. From the 10k coins seen in Gox order books, now there
are about 33k, and as holders will see the price not going up significantly, they might decide to sell more before
the price drops further, in a cascading effect. And then we may see multiple aborted new bubbles and capitulations.

You would have to give me much more than a technical case for why Bitcoin would wind up at $60.  That would fly in the face of everything that has happened in the last 6 months. All the press, all the VC capital, all the Chinese, all the capital inflow, the higher cost of mining, and a hundred other bullish factors.

In 2011 Bitcoin was hardly a viable option or a blip on the radar. Today bitcoin is in front of congress.

Please explain how we go to $60?

Good grief. I've seen you post this kind of thing several times before. It simply flies in the face of logic.

One, who in their right mind is going to crash the market down that far?

Second, you completely fail to acknowledge the tremendous buying pressure at several support stops along the way.   There are hundreds of millions of dollars sitting on the sidelines now that would KILL to buy at $60 and much higher.

Also, this bubble is not similar to 2011. 2011 lost 90% of its value in its first drop. Not even comparable.

We won't know if it's similar to the 2011 until it fully deflates, that's why I said POSSIBLE.

And with all the good press, it's still going down for now, due to market supply and demand.
Think about what can happen when there will be bad press about the crash.

Those who profited most by manipulating the price to new, almost unbelievable highs, will profit most,
when they will buy back tons of cheap coins at the bottom. Bitcoin will rise again and they'll make huge profits.

You are talking in crazy hypotheticals.  The landscape from 2011 to now is completely changed. Have you not noticed a trend of higher highs and higher lows after every bubble? And now, all of a sudden, after 3 straight months of positive news (actually longer) we are going to buck the trend and have lower lows?

No way.

Recall that we waited 6 days for the bottom in the April bubble.

I believe that this bubble has more in common with the April bubble than with the great bitcoin bubble of June 2011.

https://i.imgur.com/10r8ukF.png

As Coinbase intermittently permits, I am buying small amounts.

+1  I see it very unlikely that we will drop below our April highs (the buy pressure below that is enormous). I see nothing technically nor fundamentally at the moment that would suggest that. We just got ahead of ourselves, and this will happen many times going forward as news waves of new money come into the game, and the traders play off this, as far as they can.

Ditto to all that. I just bought a fraction more.

So what do you guys make of the current double top near 900$??
There is no bubble that i know of that has had a double top after a more then 50% retraction. Isnt it a bubble after all? Is it one of the often cited but rarely observed "echo bubbles"?

I have been buying fractions during the dips given the growing possibility that the November peak was not collapsed with enough emphasis thus serving as a base for another even greater blowoff rally. It would be technically very significant if the price breaks the all time high on respective exchanges. This breakthrough could occur within days given the strength of the buyers.

At the moment, every one of my small purchases shows a profit.

I think it's probably just the old Bitcoin battering ram chipping away at $1000 like it usually does at major psychological barriers. I recall from springtime that it used to hit a little below a psychological barrier (like 10% below), take a few steps back, ram it again, take a few steps back, then finally break through. Like a battering ram at a castle wall.

Anyway, it would have been very worrying if it hadn't corrected after the insane run earlier this week. We were hoping for some consolidation, and now we have it. So far so good. Launch pad prepped, ready for takeoff. Hopefully avoid thermal curtain failure.

Yes I guess that could be true. I think we will see when we retest the support line thats coming up at around 600$ right now. If we break that I think the double top will take us back to the foot slopes of this rally.

Onward to a new peak.

Evidence mounts that the November 18 peak was not conclusively collapsed. I expect a larger following bubble. Price doubling rates may again prove to be a good indicator when it comes to predicting the next price peak and date.

https://i.imgur.com/bmlfPFZ.png

I agree it looks that way SS

Hello, I'm a newer poster here-- just want to say hello and thank you for your dialogue and share a few of mine own thoughts. What an awesome thread! Slippery Slope, thank you and others for such careful and thoughtful analysis.

As stated, we have now seen the confirmed continuation within what appears to be the suggested trajectory (parabolic or however you wish to define it). While the nearly horizontal channel between approximately 750 - 850 held for several days, the breakout gives us further evidence that another doubling may reasonably occur, as stated. The fact that it was more horizontal should indicate greater strength at the breakout.

Perhaps the retracement to 450 from 900 will not ultimately be part of this bubble's character, if, in hindsight we are looking at one or even 2 more doublings in the coming weeks?

Or, else, the echo bubble idea seems reasonable, too.  While media continues to cover Bitcoin, it certainly seems to be lessening, in cascading and diminishing reflections, as does volume. These two things should be increasing, if I understand the principles correctly, creating the fuel to drive price through resistance.

Hi and welcome to our forum!

Regarding the depth of the retracement from the next peak, I look at the depth chart, Fibonacci ratios and historical price support levels. My current tactic is to await a pull back and buy some more fractional bitcoin at lower than peak prices. I am resolved not to sell or spend any investment bitcoins until at least 2017.

Remember to figure volume on at least three exchanges nowadays: BTC China, MtGox and BitStamp. Media is important when getting the word out but at this point I think it is personal networking, e.g. word of mouth that motivates new speculators to buy bitcoin. That networking is what I model with logistic adoption S curves.

I think a big story that people haven't been talking about is the secondary Great Alt-Boom that happened a week after the BTC last craziness.

USD for many alt coins didn't follow with BTC boom. Instead the market was more cautious to spent the BTC equivalent for NMC, LTC, NVC etc.

But it's like everyone got on board the alts now. After some hesitation of wondering whether people would really spend 10 or 20 bucks on an LTC, people are spending 10/20 bucks on a LTC.  If you don't buy into this theory, just look at LTC price, it didn't jump with BTC, there was a lot of hesitation. There was week delay or so before the Alt Coin boom.

The last Great Alt Boom was perhaps even more important than this last BTC boom from a trader's perspective, I think.  I don't think anyone knew for sure whether the alts would climb with BTC in proportion to pre-boom prices, or if BTC's meteoric raise would not be matched in the alts.  But ya, they were matched in the alts. That's something surprising and remarkable to me at least.

Great, thanks!

The self-imposed lock out on selling makes sense-- I'm finally grokking that the coins are casually worth 100k each, given the dynamics at play (forward looking several years) while this disruptive technology gains adoption. My cavalier behavior with my own coins is nearly heartbreaking, but I'm trying to keep up-- the trading has lost me many fortunes, already. I'm glad you said something about store of value.

It's funny you also mentioned volume, as I just realized, this morning, that Gox volume (IMO) was too thin to accomplish the  breakout we witnessed from the horizontal channel, and it dawned on me that I needed to find aggregate volume data. I posted something about it on the Gox Wall Thread and found coinorama, so that was a relief.

I do realize that the sigmoid curve is a macro view of the adoption path, and we haven't even approached the 'chasm' (that divides early innovation with early adopters) so to speak, but the sentiment on the bit-street continues to try and identify it; US regulation, blockchain size limits, off-blockchain transactions, etc. are all moving place-holders as we scramble for infrastructure demands.

I agree with most of your post, but I think we are well into the early adopter phase, if not through it already -- actually this timing is what worries me the most.

I agree, whole heartedly, but I don't know when would be the Great Alt Boom? I thought I would have time to buy LTC as a hedge and pair with BTC while it was under 1$ (and I should have), but now am convinced of it's status as the silver of cryptos, and with that territory come those who want a cheaper asset class-- not to mention the fundamental differences with proof-of-state/work and the flexible mining hardware requirements. It's actually shot up 20x very quickly, so, I wonder if it will be more volatile or is later in starting its adoption curve, so the 'doublings' are still larger. I wasn't sure it would make the grade, so to speak, so that's an interesting observation you're making. The legitimization of the second alt paves the way for a broad market of virtual currencies and services around those.

Personally, I am working to gain the skills to automate trading as part of a career change into computer programming. Having a market of currencies (that are viable) will allow me to explore this work in a more robust setting. I apologize if trading virtual currencies seems a vampiric tax on the innovation, one devoid of rendering service to the world; but, it does interest me, and this horse needs a carrot.

Oh, and happy Thanksgiving to other 'mericuns.  :)

I misspoke, the 'chasm' is between the early adopters and early majority, and given that, perhaps you are right-- I don't think so, I tend to think we are just crossing into the early adopter stage, only. That's how the infrastructure is getting rolled out for the 1 or 2 out of 100 to be able to use it. Even at early adopter stage, the usability must be pretty decent, and it's just now coming-of-age at the most basic levels. Even those are lacking-- the best example is the exchanges, and some merchant services-- still no remittances, micropayments, escrow, et al. While at early innovator stages, it was really only a very tiny subset that was able to fit the requirements for usage.

If you subscribe to the ideas of 'Crossing the Chasm', then what might the chasm represent? Would it be the question of how does a regular Joe use bitcoin? I think that's a reasonable place holder, and one for which Bitoin still has a long way to go. Remember, early adopters are some 13% of the market. There is no way we have made large inroads to that group. We are probably still well under 1% adoption, though the media is covering this realm.

The chasm with regard to the population of early adopter bitcoin speculators and early majority bitcoin speculators, as I understand your terms, was the period in 2011 when the  trustworthiness and utility of bitcoin exchanges was very much in doubt. During the early adoption period exchanges were non existent or not somewhere that I felt really safe storing coins. According, I put June 2011 at the trough of the chasm for adopting bitcoin speculators.

The chasm with regard to the underlying economy may be upon us. As informed speculators we can envision the replacement of legacy financial infrastructure with bitcoin. I see very impressive transaction volume reported by coinometrics.

I honestly don't know how one can argue that we are anywhere further along the adoption curve than the first signs of the early adopter phase. Before I go further, I should really make clear that I am referencing the Roberts Adoption/Innovation Curve with its 5 constituencies as follows:

** Early Innovators (2.5%),
** Early Adopters (13.5%),
** Early Majority (34%)
** Late Majority (34%)
** Laggards (16%)

There are some larger sums of money getting moved with Bitcoin, and while most of that is speculation (still valid movement), the number of actual people who are using the protocol or currency is bordering on miniscule. I suggest you consider how far down the rabbit hole, and out of main stream, this conversation is being had. I think that the type of person that comes to Bitcoin *this* early might tend to understand concepts and abstraction more readily and deeply than the average person. There is no precedent to Bitcoin, the math is *scary*, it's new, requires a good deal of thinking to grasp, overthrows/improves the status quo, etc. The idea that Bitcoin has more than 1 out 10 people in *any* group (cryptocurrency experts aside) utilizing its benefits is patently false. The infrastructure is not even available to use it for but a small fraction of its potential.

My guess it that given the media uptick, it seems like Bitcoin is everywhere. Perhaps confirmation bias is at play? Certainly the facts seem to indicate that only about 500,000 private keys with over 0.1 BTC exist, and there are about 150k users on Bitcointalk. While it may happen very fast, Bitcoin adoption still has a long way to ubiquity.

Any updates?

Are we getting a rounded (double)top instead of the anticipated (at least on my part) sharp parabolic increase kind of needle tipped top?

Facebook has around 1 Billion users.
Given that there are people with dozens of accounts and kids, teenagers on facebook. I would say anywhere from 100 Million to 50 Million are financially sophisticated enough to be the market for Bitcoin.
The current user base estimated from various threads on this forum is around 1 Million for Bitcoin. So, I would put that around 1 to 2% of the entire market, which is the Early innovators stage.

However, in an alternate scenario, where Bitcoin does not fully mature to it's potential it dominates a few niches like international remitances, offshore asset protection, grey market etc... but does not take hold as a payment network (due to complexity, technology risk, govt regulation etc...) In that case we can estimate the total market to be 10 Million users. In which case we would be around 10%, which is the early adopters stage.

In either scenario, irrespective of what happens to the price right now. The final peak price is at least 1 to 3 years away at around 50% user adoption. (At what might be a valuation of 10 to 100x current price).

I think it's a slow decline from here, and my subscription for my charting has run out, so can't see *my own* trendline drawings, but any line on the log would highlight the breakout, as early as down from about 1160, until 1000, unless 750 is the support for this trend (where we are right now); if that's the case, then maybe this spike does run, I could only guess.

The core of the idea here, to me, is that the spreading of Bitcoin *has* happened, we've witnessed another spurt of adoption, the surge is through. There is, ostensibly, no continued momentum, so from where would a correlative price increase arise? As we drift, we will retouch the 'ground', which will be raised, now, to accommodate the new growth (perhaps 266-450).

Am I talking crazy town?

PS While I type we've dropped to 699.

These thoughts and estimates seem to give healthy weighting to the balance of arguments-- thank you for pointing out the concerns around adoption across different industries & applications.

We should consider, too, that there are other industries for which cryptos will fill a need, that have not yet been discovered/invented.

And, we should recognize that other cryptos themselves make compete for part of Bitcoins presumed future market presence, if they provide better solutions for myriad reasons, may those be regulation, locality, etc.  :)

I can pray to my baby Jesus (no offense to anyone) that we have 1-3 years to 50% adoption.  :P

Just noticed something VERY interesting, each Bubble is preceded by ~6 months by a large trading volume spike which may or may not be a significant bubble in itself.  I wonder whats up with that?

I agree with your interpretation of the top.

My timing of bubble peaks depends upon an unsustainable ever-increasing rate of price growth. After the November 18 peak and correction, it looked to most of us that another greater peak would form to fully collapse this bubble. However, the recent China bank/bitcoin regulation news removed the speculative fever from the market.

I continue to assume that the collapse of this November bubble will be similar in technical shape to the April 2013 bubble, with the peak price followed within a few days with the low price, then a damped oscillation of prices centered about halfway between the high and low price.

Following a buy-some-more and hold strategy, I bought at 753 earlier today.

I bought at 710 yesterday and am anticipating the dead cat bounce to around 1000 atm. But this only on a side note, the most important question right now: Where is the bottom?
Going with your earlier estimation of a 70% retraction it would put the bottom somewhere around 360$. After some time has passed, if you reassess your prediction, where would you put the target at present?

I am hesitant to predict a bottom, rather I observe that the low of 576 on MtGox is not as severe a drop as the low from the April 10 peak. The price action so far is more typical of a correction than a bubble collapse.

I concur, a further drop to 450 where a support line is coming up from the early stages of the bubble would be within the realm of a correction, although of an unusually strong one. Pre bubble levels wouldnt be reached before 200$/BTC. It could be argued that lasting value has been created since this bubble started by raised public awareness, official recognition in the US senate and in the far east as well as in some places in the EU. Furthermore have many more businesses started to accept BTC during the bubble and the second market fund has provably raised a lot of money and attention from bigger investors. Summing the forementioned up I argue that it would be improbable for the price to settle at pre bubble levels where all those values have not yet existed. It should soon find a support line to follow which exists somewhere north of the 200$ mark, pricing in all those events that happened during the bubble period. My guess would therefore be the mentioned support around 450$ not withstanding the always looming possibility of a quickly recovered overshooting to lower levels.

Indeed. In any case BTC "bubbles" seem to be shorter and more contained, both in the way up and in subsequent deflation. It also looks like the time between them is getting shorter and shorter.

Honest question: should we consider what happened in 2011 and in early 2013 "bubbles"? I don't know if multiple rallies and "pops" that end up higher than when the rally started fit the traditional bubble definition.

In 2011 the rally started at $0.8 and the bottom was $1.98 - that's hardly "going bust"
In early 2013, the rally started at $12 and the bottom (just 4 months later) was $50 - again, that's hardly "going bust" in my book.

The current early December 2013 pattern would fit much better a "first sell off" in the traditional bubble chart - don't you think so? But again, hardly to see other bubbles that had such an immense appreciation in different phases. Let's remember that the famous "south sea bubble" saw on appreciation of only 10x - really nothing compared to BTC.

Finally, I do believe that there is a good chance of BTC going to near-zero at some point. But I cannot imagine that process being a slow and painful decline - I imagine it as heavy stone dropping extremely fast (probably fueled by heavily leveraged shorting, something still impossible in BTC) - as bubble pops usually are.

Hmmm, finding the bottom. As with finding the top, those smarter and more experienced than I would say it is impossible. If we take that on face value, three things occur to me, though you may find them obvious or of little use.

1) Dispersing coins from miners and current holders to future (or new) holders is evidenced in the adoption spikes on the S-curve. Namely, getting the coins from fewer to greater numbers of people *is* the process of adoption, it occurs rather violently, and which has historically popped-and-dropped the price, typically to a higher point than the previous ATH, like Rampion smartly noticed. To use a crude analogy, more water in the bathtub makes waves at first, but ultimately acts as the proverbial rising tide that lifts all vessels.

2) We are in a downtrend. The price seeks to settle at the new plateau, the price of which could probably be charted with the numbers of users and price data before and after each prior parabolic spike (or what we all mistakenly, or casually call 'bubbles'). Most of us believe 266 to be the floor, and my hunch is between 325 and 450, but for no thoughtful reason.

3) Most interestingly, if you look at the log charts, you can see that in each of the adoption surges (bubbles), the retracements to the new lows (post 'bubble' settling points) took longer to find than did reaching the top! What this suggests is that for this current surge, which arguably began at the outset of October, if we have crested its peak, which seems reasonable, then we are looking to, at least, 2 more months to 'find' the new 'bottom'. [Perhaps another upswing could preclude the price from finding its new equilibrium, as we continue to witness shorter periods between blast-offs, but that should be easy enough to detect by volume if it occurs.]

Conclusion: It is easy to spot the parabolic surges on volume on a longer chart (1D), and easy enough to see how that would yield 5-10x if realized anywhere near the crest. I will leave it up to your imagination to envision the potential yield from buying each settled low, and selling the relative peak of each parabolic surge (from 90 this summer to 729 today would work out fine, for ex.). And, how about if we participate in several more of these uplifts before reaching the vertical edges of the S-curve? I will, however, draw a straight line that suggests heeding this curious novelty might greatly reduce stress, free up time to spend on other things, and, mention that I have begun to plot my own course to do as much. Wishing you all the very best in wealth creation.  :)

[P.S. Is the strategy outlined above not the middle path, where the slow play would be the very successful buy-and-hold, and the fast play would be the very dangerous, fast and loose trading?]

I sorted a figured we would see a price crash with then a stabilization around $700 and it looks like I was right, at least so far.

Thing I wanted to point out though:  I don't even know if we can this a bubble and call this a crash of said bubble.

If you consider 30 days ago we were at less than $200 and now (at least currently) have stablized at around $700 then that isn't so much a bubble and crash in my opinion. More than tripling in price for something in 30 days is more of an adoption curve or a success story than it is bubble and a crash IMHO. 

If the price dropped to $300 bucks or less then you could call it a bubble. IMHO November was an awesome month for Bitcoin and neither a bubble or a crash terms really apply here.

I find it entertaining the way negative commentators breathlessly describe "the massive crash."   Those who have been around long enough know that this thing is growing at an incredible rate and this is just a sign of a effervescent and highly functional market.   Each crash has set a new floor and in many cases the new floor is higher and higher.   We must be in a mega bubble if anything :).   Up and down by $1000 makes less of a difference when you have something worth $40,000.

I wonder how the doubling time will look at the next bubble?