Bitcoin Forum

Reasoning:
- Low volumes
- Price stagnation
- Expected difficulty decrease in a couple of days
- Gold crash
- Global stock market crash
- Diminished interest as reported by google searches (which highly correlate with market price/momentum)

http://img263.imageshack.us/img263/5427/btcsearch.png

Seven-day target: 3.25$ USD/BTC

You are right, the only leading indicator for the overall bitcoin project are bitcoin prices , i.e. BTCUSD

I do not see any correlation with Gold, I doubt that a small crash is ahead, the prices are actually on the low side even after the mini rally.

World stock markets are in turmoil, commodity prices are plummeting, investors are running towards US dollars, dogs and cats are sleeping together.  Some people like to think bitcoin is isolated from the general fiat economy, but that's not the case.  High risk and highly speculative investments are the first to be sold off.  I wouldn't be surprised if we see new 6 month lows for bitcoins this week.

The price has dipped below 5 now.
What next?

Buy ???

Bitcoin is more than just a currency.

It is a Google trends predictor!

Now I get the "manipulator"

He is just one "normal" investor that has lots of investments, and is actually trying to stabilize bitcoin, and failing that, sell his bitcoins at a controlled price.


Since that people is actually rare in bitcoin, with most of the investments coming from small investors, I think we should just take the chance to buy cheap as he (or they) sell.

Sell  ???

Don't do that.

The price dipped because some few people with lots of bitcoin want to sell the coins (probably they need cash... they also probably are among those that caused the gold, silver, stock and forex dips these weeks)

Instead of selling, just buy what those big guys are selling, the rally pressure still exists, and those that buy will profit from the desperation of those big investors that need cash.

good point! i wonder how many people are selling btc to get there hands on silver/ gold during the metals dip.

Things were getting boring on MtGox over the weekend.  Looks like someone decided to spice things up a bit.  I'm not surprised at all we're below $5 now.  Totally predictable.

And what do you predict nex?

I predict I will lose more money on bitcoinica

Back to $5.40 - $5.60 range by week's end.  The general trend is still down but it's in no one's interest to see bitcoin crash.  Traders picking off easy profits from the swings don't want to see the price stagnate.  

I believe that the price will go near the 4.5 support line. But never breaking it.

Time to readjust arbitrary long-term trendlines downwards, and come out with new useless projections?

I agree that the drop was very predictable. I mentioned one scenario weeks back that basically means the price will stay within the $4-$6 range for a relatively long time, at least in Bitcoin time.

Where it goes from that range is not sure, but I think that will be very meaningful. Basically it's the market deciding if they think Bitcoin has a bright future or a dim one. A spike below $4 wouldn't signal doom for me yet, but a stable price below $4 would certainly be a bad sign.

Now it's just wait and see.

 ;D

I would be surprised if we don't see a further drop in the next few days due to the difficulty decrease.

Gold has no immediate correlation with bitcoin price, but does imply consumers have lost interest in expensive rare commodities that could serve as alternative currencies in times of crisis.  The market for bitcoin is somewhat similar.  Right now, gold is taking its predicted tumble and it appears consumers may be trying to jump onto cheap investments in equities instead.

Disagree because the cost to produce is going down because of the difficulty change...  Unless the difficulty/hash rate stabilizes or increases we will see a fall in the price to ever successive new lows.

And what would be the current price for creating a coin? The average of course.

atm it looks like diff will go down at most 5% this time round

Well, from my thread: https://bitcointalk.org/index.php?topic=34978

It depends on how you factor in the hardware, but I'm going to say about about $3.50 now and about $3.30 after the difficulty decrease.

Are you assuming that all miners sell what they mine?  I don't understand why a decrease in difficulty / decrease in cost to produce would necessarily equate to a decrease in USD/BTC.

Maybe in the USA or Canada, with the cheapest electricity on Earth.

Most miners save up all the can in anticipation of a price swing.  Mining is a long term investment.  You mine for months, you don't sell when it's at a big low, you wait for it to be at the highest point.

Yes, but that mentality just means there's even more downward price pressure.  As soon as the price rises, people holding on to their coins in anticipation of a higher price come out to sell.

I mine but hold long term. I have no reason to sell until I either go on an expensive trip, or need to retire, since I can easilly cover my mining costs with my regular income.
When I do sell, i admit I don't bother waiting for a high price, since when I sell it usually means I need the money now.

http://dot-bit.org/tools/nextDifficulty.php

4% =/= $.20

Because when BTC cost $.75 to produce and $32 to buy there was no discussion of whether mining or buying was the right way to go.  Massive hashing power was being added as quickly as hardware came in stock.

While there may not be a direct correlation between price and difficulty as a result of "buy and hold" strategy which worked well during an uptrend there is most definitely an influence of one on the other.

There are people who simply won't sell any mined coins under the circumstances. Like me. It doesn't make any sense if I think the long term is still very solid, which it is, and the price is at or near the lowest point it has been in a long while. The lowest I'm considering selling is 50% higher than the current price, and that'll only be a small amount. Most of my coins I plan to hold for as long as required, years if needed.

Only reason to sell big amounts at these prices is if Bitcoin itself got into trouble from a technical or law -perspective, which hasn't happened yet. The only other reason is if I'd need fiat money desperately, and if I need to sell because of that, it certainly won't have any relevance what the BTC price is. Then I'd just sell.

There are obviously other reasons to sell as well such as trading in the short or mid-term, but that is not in my plans either right now.

In fact, I'm also thinking of basically never selling a portion of my coins. If Bitcoin proves to be robust for the long-term, it's very much like gold. And I am not really planning to sell all my gold either, ever. It doesn't really make sense unless you have to, because investments like that are really good at holding their value in the long term. As long as the cryptography behind Bitcoin is solid I think it could very well be part of more and more investors' portfolios in the future. This will also increase the price of one Bitcoin significantly.

Buying to sell with a quick profit is a different kind of investment, those will just make bubbles after bubbles. But if Bitcoin becomes respected as a solid possibility for long-term savings, well, that will make the price soar for real. So it's not only increased trade and economy size that will increase Bitcoin's value, it can also be that it becomes more highly valued as a store of value.

Right now, people still don't trust Bitcoin enough for it to become a real store of value that can be compared to gold. It's too young and the short term volatility of the price makes it difficult for anyone to think of it as "stable". But in the long term I see massive, and very likely, potential in this aspect as long as the fundamentals of Bitcoin stay solid.

And with fundamentals I mean that it stays legal and the cryptography behind the currency remains rock solid. Nothing else qualifies as the real fundamentals, that is simply all Bitcoin needs to succeed because it's so good in itself. It's gold made practical, and that means a lot.

+1

Not to mention it being a virtual commodity, as opposed to physical, which is difficult for many regular folks to grasp.

Have we forgotten that for every seller, there's a buyer?

At some mutally agreed-upon price, yes.