Bitcoin Forum

It's certainly starting to look a bit more bullish again, doesn't it? There's still uncertainty in the air about how the gox situation will resolve, but that rebound from 400 was beautiful: loads of volume, and remarkably controlled retracement so far. All in all, I think I'm not the only one who looks at the charts and starts wondering if the post-December-ATH bear market is maybe over...


If it weren't for the stats from Bitfinex. This is a view of the past week. 'Total sum of active USD swaps', i.e. people going long on leverage is, well, unimpressive.


https://i.imgur.com/cjL3qTz.png


No big deal, maybe. But then there's total BTC swaps:


https://i.imgur.com/ybu3QNQ.png


It's a new ATH (at least as far as the website, charts-bfxdata.rhcloud.com, goes back). In other words, traders on Bitfinex are still shorting the hell out of Bitcoin.

I can see two ways this will resolve: Bitfinex reaction is lagging, price continues to climb (which will lead to a lot of headache for those with active shorts), or the shorting traders are onto something, and we're coming down again, hard.

Personally, I can't say exactly which way I'm leaning -- I'm still cautiously optimistic, but the Bitfinex stats certainly put some more doubt into my mind again.

Assuming the Shorters already sold MASSIVE amounts of btc, they have to buy back at some point, but when?

interesting, thanks for this. hopefully we choo choo and shorters have to cover

edit: what do you think about stamps order book ($24m), i don't think i've ever seen it so high. where did it come from? i don't believe gox traders wanting to buy back could have transferred fiat so quickly. it was around $10m a couple of days ago.

Like I said, it's possible it's just a lagging signal. But what really surprises me that, including today, the total BTC swaps are still going *up*. I really don't see that as anything other than finex traders collectively betting against this recovery. We'll see who comes out on top in a few days, I guess.

I think it was Matthecat (edit, or TERA yes) who said this shorting is responsible for the ATH in bidsum at stamp, makes sense.

http://coinsight.org/graphs/bitstamp_btcusd_depth_7d.png

I can't explain the big jump we've seen yesterday (or 2 days ago?) either. I read a comment by TERA (EDIT: or matthecat) who in fact linked to the shorting going on on stamp through finex (in the sense that those who sell on stamp through finex will pump USD into stamp), but that still doesn't explain the almost vertical increase, in my opinion.

I'd say the most likely explanation is one of the following two: (a) attempt by a large market participant to "paint the order book", i.e. to give the impression of buying pressure where there is none, or (b), more positively: USD sitting on stamp's account, but not the order book, finally entered the race and got put on the order book.

Yes I guess that makes sense but you're right, it doesn't explain the vertical jump. I recall there were a couple of big dumps, I think 10k and 5k over the last day or two, perhaps some of that USD is now sitting on the orderbook (either to buy back in cheaper, which I doubt, but is possible) or to manipulate the orderbook.

I went from lender to outright buying coins recently.  I think the money available for USD lending has decreased on the loan book.  Good to see the shorts, buy BTC, appreciate and earn interest at the same time.

Bear in mind, there is much more potential for getting wiped out altogether with leveraged long positions, than leveraged short positions. Just takes a flash crash/mega dump to totally annihilate leveraged long positions, but an insane level of buying power to rush into market completely insensitive to price to wipe out total short capital.

In a market like Bitcoin, punctuated with sudden whale dumps, long with leverage isn't very clever. Shorting is always going to be more popular, regardless.

I don't see any reversal until 720-750+

It is going to push to upper trend line if it can, but overall the channel is down unless we jump another $150 on stamp.

I wonder if we will break the ATH. Bitcoin please go to 900+ so I can recover my losses  ;D

You and countless others.  $800-$1000 range will be huge resistance as most folks (in red now) will be getting out

Yeah, to break that kind of resistance will take a big charge, a slow rise will not be able to break through imho.

With the right momentum a lot of people will break out of the red and then think, I'll wait for the next high before selling, from now on its all profit!

the past few hours... the Choo, choo needs more choo  :-[

Memory of much higher prices from like just a few days ago are still very much in the mind, so there is reluctance to sell and/or take profits.

On the otherhand, only a minority of people are going to be willing to take risk of $610 top being taken out after an already 85% recovery from bottom....

......could play out in this range for a while before long traders get impatient and decide to take profits...or until shorters get bolder and bolder.

I beg to disagree. THat's exactly what everyone claimed post-260 ATH, that it'd take several attempts to break it, selling pressure all the way up, yadda yadda. In reality, the hard bit was going up from ~60+ (July) to 130 (end of September), then shaking off the SR crash. Everything afterwards was just one smooth ride, and the previous ATH wasn't even any serious battle anymore (3 days were spent around it, then: done). Sure, we had Chinese help, but I'm just saying that breaking the previous high isn't such a huge deal if the buying pressure is there. (which, admittedly, is still lacking right now)

This doesn't make much sense. It depends on how long you can avoid margin calls, but the overall trend would definitely favor going long on leverage. But I agree, if you trade near your limits, you can easily be wiped out in a single flash crash.

But anyway, even if shorting is the natural inclination in BTC, it still doesn't explain the divergence I point out, that the rest of the markets are starting to look a bit more bullish again, while shorting increases. Like I said, in the end I guess it's a bet by finex traders against the recovery, but it wouldn't be the first time that their opposition is simply wiped away by the rest of the markets (think the last that happened was in October last year)

it takes 2 to tango...

(buy coin, lend it to short sellers to hold the price down, buy more coin)

I think it makes perfect sense. The current trend is a downtrend, even if the overall trend is up. The market has rallied 50% within less than 48 hours. Tell me a better time to short....

Somehow, for all the accusation of fake trades on Huobi and OKCoin, I think the Chinese sets the market to some extent, prices never truly crash in China during this saga, it's a slow decline, which makes me quite confident buying in in the 400's & low 500's.  Worst case, I can dump it in China and have ways to get the CNY out.  But now China's prices are lagging bitstamp, which could mean we are in for a pause.  The amount of speculative money and firepower there is beyond our imagination!

Good point. Short-term bets on a retracement piling up on top of the shorts betting on the overall downtrend. That'd explain the last day or two of increase in the graph I posted.

choo chooo,
reminds me of this ^^
https://www.youtube.com/watch?v=QQunKPD3uVk 18+

I suspect that some rich people that lost a little play money on gox have realised they'll need to buy in again ASAP while the price is still supressed from the gox panic.

Oda, I love your analysis almost everytime. However, this snap back seems so obvious to me. We have 6 down weeks in a row - which may have been a record, I am not sure. The Gox tumor has been for the most part been removed from the bitcoin world, albeit not 100% yet. Meanwhile there were both a ton of shorts and a ton of people looking to buy in in the 400s. 

All this seems to suggest a significant and sustained rally - at least for a week or more and probably at least up into the 700s or the higher down trend line (Jan 5th-Feb 6th) before it broke down into the lower down trendline.

So, that is my first point - that there shouldn't be any surprise on the fact that the rally could sustain for a while.

But my 2nd point is, it seems just as possible that after this rally takes us where it is going, that we will be looking at the overall downtrend to continue to retest potentially the 400s again or AT LEAST the 200 sma. I just cannot imagine that we do not retest that support again at some point before entering a new bull market.

I could be wrong about all this, but I just wanted to say I am a little surprised that some people (ie TERA who did a wonderful job calling the bottom) are surprised that this rally has legs.

Short interest is a GOOD THING if you're looking to take a long. It means there is a lot of potential energy, the coil is loaded down, and when traders close their positions, it will result in UPWARDS movement.

Exactly. That's one reason why I think this rally has legs. In fact, if we don't get to 700s down trend line and only remain in the current one, then this is even more bearish, imo.

On the other hand, I think the move from 400 to 600 is WAY overbought and is not trading like any previous bitcoin recovery. There should be a good conslidation back to around 500 before the next leg up. That would not be bearish. There might be a lot of consolidation in the 500s and 600s before getting to the 700s because if you go to a 3 day chart, there are EMAs at 625 and 670. Those are major resistances. When those break, all hell breaks loose, and the next trading area will probably be in the 800s. This will be like the 140 in August. Now if 2 months go by and the 3 day chart is still not reversed, then yes that is bearish.

Unless we are in a longer bear trend. I do agree that either way we should see the 200 EMA at least one more time.

I expect some pressure once SecondMarket allows investors to take profit at the end of March.

Maybe the bear mood finally got me, but I wouldn't be surprised if we end up not only at the daily EMA200, but the 300 again.

re: "this rally has legs"... that's exactly what I'm doubting, and as much as shorts can be seen as a "load down coil", it can also be the suppressor that keeps it down. I would have really liked to see us go through 620 on decent volume, but neither are we near that price, nor did volume keep up. Maybe it's a resting state after being overbought, but right now, I'm as skeptical as I was on the 23rd (i.e. when we were at 640/650, before dropping back to 400). Not saying that'll happen again, but like I said: my sentiment is short&mid term bearish, and it takes some more to convince me we're turning around this time.

Yes. Because if you had just been totally burned investing in what you always knew was a high risk asset, you would be chomping at the bit to get yet more millions into the same asset on another potentially high risk exchange.

That is totally how human psychology works!


Never bet against the 4Hr indictators. They are all maxed, and looking to head back down the way. We may get a slight rise, trend further, a slight dip followed by another slight rise. But shorting right now has got to be a good bet, at least until lower $500s and probably a bit more......lets face it, hardly a good news week.

Short right now at $588. Chance are this will be within $1-$3 of the best short price on offer today.

Huh? How am I betting against 4hr indicators? TERA and windjc were mentioning revisiting the 200 day EMA at around 530, and I simply said I can even see us going back to the 300 day EMA (at around 430 right now). Not today, not tomorrow, but as part of a continued dragged out capitulation.

That said, I'm also looking at the 2h view with a BB, and I can see a slightly more positive scenario: According to that interpretation, we saw the overbought state we were in in the last 24h resolve in an *extremely* controlled fashion, and we can now actually expect another small bounce up. This *does* mean price shouldn't go below 545/550 in the next 24 hours, otherwise, the pattern I see is broken. If however we *do* go above 600 again in the next 24h and stay there, it'd be a pretty good sign... in the sense that we're working out way up, staying the upper half of the BB, with the necessary retracements only briefly touching the lower BB bounds.

You were expecting to go through 620 right away? You need a 60%+ rally, and the 53% rally wasn't good enough for you? Keep in mind most btc recoveries only rally 20% on the first leg...

Also can you explain the "supression" effect. How do shorts continue to prevent the price from going up on an ongoing basis? Even if it did, I still think that's a good thing to have on your side when you're opening a long. The opposite would be when everyone else is leveraged long, and they are all waiting for a point to sell... Or do you consider that these longs magically cause on ongoing rally also?

Yeah....2hr charts are in no-mans land but with 4 hr charts looming bearishly above. This probs means extended stagnation period before a gradual grind down to find a support level as opposed to the kind of sharp moves that we have witnessed recently.

btw, where are you getting the information on the swap deals from Bitfinex. This is information that I would prove of use to me.


$646 - $400

$400 - $610

I make that an 85% recovery.

Price just hit 598.87.. bulls are going for another attempt at breaking through 600. I think there must be so many shorts going on right now that if they get squeezed out by a few whales we might just ramp up to $800 in one go lol.

Because, as I said above, the biggest surprise to me wasn't that shorts were at an ATH, but they were *rising*. Shorts being piled on top of even more shorts... there is no "magic" going on at all, I'm just looking for information that diverges from the prevalent expectations. A trend of traders increasing their leveraged short positions is such information. I really think any secondary interpretations ("would you rather have them being long already") are, well, secondary. A massive, *increasing* short wall is not, in any reasonable interpretation, a bullish signal.

That said, I've also mentioned right from the beginning, that finex shorters have been burned badly before, when their collective bet against an uptrend was simply trampled down. There's enough evidence for that in the end of last year (autum, before the last leg of the rally leading to December ATH)

http://charts-bfxdata.rhcloud.com/

Select BTC or USD as unit at the top menu, to see totals of either.

And that's why it's probably a bad idea to ever let your leveraged position "sitting" for longer than a few hours. Don't know what's the technical term is for that...

What I mean is, I can see how leveraged trading makes sense during, and I really mean: right during a violent swing. But I simply can't ever imagine placing the same bet *and then walking away from the computer*. But maybe more skilled traders know what they're doing...

Oda, I am confused by your post.

First, why do you predict a possible retracement to the 300 SMA? We haven't been that low since 2012 when we were flatlined for(ever).  The silk road crash didnt even touch the 300.

Also, I have the 200 at around 475 and the 300 around 360. Not sure where you are getting your #s from for these moving averages.

Your answer is: I'm talking about EMAs :D

I never use SMA, don't trust them. When you guys talk about touching the SMA200 again, I tend to translate it in my head to an EMA300. Not exactly equivalent, but I have more faith in it.

Why more faith in EMA than SMA?

I have no way of giving a conclusive answer, but basically, when I hunt for signs of trends by looking at price in relation to moving averages, I tend to get much clearer patterns using EMA than SMA. But that's really hard to *prove* in a proper way, so I can't just say much more than: I personally work better with them.

Sorry for a bit of a disappointingly uninformative answer :/

Go back to the $100 flash crashes on the two shorting exchanges, BTC-E and Bitfinex. Anyone sitting with a leveraged long position would have taken a 100% hit on their capital before they had the chance to exit the market. These things happen in Bitcoin all the time, whether it be a server hack (as applies to those two as far as I am concerned) or some mad dump. Never seen a $600 dollar 2 minute spike up the way though. Conclusion, leveraged shorting is far safer in this market than leveraged long trading. Setting Stop Losses on Bitfinec or BTC-e is just asking to have your arse farmed and money stolen of you. Therefore trading long with leverage is prohibitive.

But you are probably right regarding the timing of leveraged trades..I do leveraged shorts during static market trends because I am an impulsive idiot... Leverage is only for when you are really sure that the market is about to make a big move. Right now for example, many people believe that the market is in for a text book 66% correction and therefore the short trades are maxed to the full. This has probably determined the recent tight market as sellers cancel out buyers, and exchange associate bots sit and happily knudge the momentum up to farm low risk tolerant traders leveraged short bets, whilst making the odd brief soiree to the lower trend line to farm the longs (yup, I believe BTC-e and Bitfinex are corrupt places and actively practice squeezing of leveraged traders with perfect market knowledge in order to enhance their profits......many of these 'peculiar' huge Bid Walls that appear on Stamp are actually being made on Bitfinex).

What I think is away to happen at the end of this pennant formation is a break up the way, which will squeeze shorts out of the trade further pushing price higher and which will turn out to be a bull trap of sorts. Longs will pile in, and then will come the dumps, forcing a correction, but only down to around the $550 level where the dumpers will be competing to get back in and take their scumbag rat bastard profits. I just don't feel $400 range Bitcoin occurring anytime soon and think the near-medium term trend from here is mostly up. However, in light of TERA's pointing out the odd indicator signals of this particular crash, I do believe that we will be visiting the $400 range and possibly lower before we see any ATHs.

Fuck Gox and all those other stories that are attributed to price movement. Bitcoin is behaving like it is because it is being fucked with by people who are milking it for everything they can get out it. I am turning bullish for the time being, but long term, I am still a bear and believe lower lows are yet to come some ways down the line. Bitcoin doesn't flash crash to make its final capitulation bottom and then almost recover within one day. This just does not feel like a low to me. Too much euphoria and back slapping going on for that. Even I predicted 'bottom' within $20 (too low unfortunately for me) weeks and weeks ago using the most rudimentary TA 101 skills. Seems all far too textbook for my liking. I didn't follow Bitcoin so closely until November 2013, but I am pretty sure that with the last two post bubble bear trend lows, that people actually involved in Bitcoin felt like the end was nigh.

We will see how things go when we get back up to the $800 level.

Cheers for the link btw.

Not sure why you are short term bullish, Joe Blow is out for now, this shit is going down again soon.

Yep. Joe blow isn't running to the market with bundles of fiat to pour it into Bitcoin. Joe blow is sending Emails to his Bitcoiner mates warning him that Bitcoin is doomed. That is one of the reasons why I am still bearish in the longer term and believe that lower lows will come.

But are you still trading Bitcoin?

Is everyone who was already trading Bitcoin still trading Bitcoin?

Of course they all are. And most of them believe that the low was in, and most of them are now bullish as hell, with starry eyed visions of $5K by June 2014!

This alone along with a great many other 'reversal' technical indicators suggests to me that after support is found anywhere anywhere between $470 -$550, that Bitcoin will trend up. Market manipulators will both allow and encourage this as the more fiat that pours into Bitcoin, the better it is for them. There are a shit ton of clueless idiots got dirty rich in Bitcoin. That means a shit-ton of money to be emptied into the koffers of the syndicate that I am calling the Chinese Cyber Cowboys. I have no proof that such a truppe of bandit hackers exist in Bitcoinland, but I did have a dream about them, all the major action in Bitcoin occurs during Chine Prime Time (when all the rest of us want to be in our beds), and Huobi is by far the most 'influential' Bitcoin exchange.

Huh-uh. Most that are still in are not going to pay $600/btc - they are not starry-eyed, that would be Joe Blow when he sees the price spike. I don't think any rational person into btc really thinks this whole Mtcocks thing is over and done with and on the train we go. Some here say they are but are they talking their book? We are going down again.

Joe Blow doesn't move markets

Once Joe is out, we go up.

Sure he does, you think the November spike was holders and early adopters? Joe Blow is either doing 1 of 2 things, and neither of them is buying right now.
I doubt we will see $400 again in the next few days, but this choo choo train shit is pure denial.

Still looks like a bear market to me...

The good news is; unless we get some more seriously bad news soon, our next dip will probably find the bottom and ignite a trend reversal.

Although I have bought and spent (and even held without necessarily speculating) Bitcoins since 2011, in November 2013, I was Joe Blow. And charging in I came, with what started as £5K of capital and what has snowballed into £15K of capital into the market.

What could have tempted me?

Maniacal news reports and ever increasing price?

The fact that I just sold 15 'unneeded Silk Road' coins at $340, and then had a dream of Bitcoins going through $600?

A combination of them all is the truth.

Now as a novice trader who is learning all the time, notwithstanding probable further near term corrections to find a support above the $400 bottom, everything I know about TA (not that much to be fair) and the general feeling I have in my bones (served me damn well up till now), tells me that right about here, at a carefully chosen price point, Bitcoin is a good near term investment.

In the meantime, I am getting Emails and text messages from worried friends and family concerned for my well being after the catastrophic collapse of 'the biggest and most important Bitcoin exchange'.

Joe Blow is not touching Bitcoin right now with a 10ft long shitty bargepole. But Joe Trader knows that at least for the time being, Bitcoin should generally rise, as opposed to go on to find new lows in the immediate future. Most likely lower lows are coming before new ATH, just not quite yet.

Your friends and family are right to be concerned, they don't want you knocking on their doors broke asking for help lol. They represent the general public, whom btc needs for any serious rise. Saying traders will cause an increase is like saying used car lots can exist selling to each other. You need Joe Blow and his cash to raise the market, anyone who doesn't get that is pretty clueless.

You need Joe Blow and his cash to hit new ATH's. He is not needed to raise the market. Bitcoin is already awash with liquidity enough from pre-existing traders.

After all, was it Joe Blow who was responsible for raising market from $380 to $1000, Dec 17th - Jan 6th?

No pro is going to get caught holding $1k coins, so yeah - I think Joe had a lot to do with that rise.

Wait a second, whoa whoa whoa...I thought it was Sum Yung Guy who was responsible for raising the market?

Joe comes in all colors. The point is for every dollar made on every rise there is a dollar lost. That's why people call this a Ponzie scheme, we aren't betting on anything but vapor. So, do you think pros gave money to pros or Joe gave money to pros on that rise? my bet is Joe was the main buyer up top.
You know I'm right Matt, you've said it all in prior posts. This has been a game to make money off Joe for quite awhile now. Underneath it all is some really cool shit though, which is why I'm interested and trying to gather coins cheaply for the long term. If I thought this was really nothing more than a scheme I'd never have looked twice at it.