Bitcoin Forum

I have had an interesting thought lately. What if November to January was a brief correction from the 6 months long bear market which is over now?

If we assume the top is 7.22 and there is again a months long 94% "consolidation", the low would turn out to be 0.45 USD.

Food for thought.

I don't think that's unreasonable.

Perhaps let me add some technical evidence:

Daily RSI confirms the turn down at 6.2 by a lower high. We still haven’t seen it above 60 ever since the Bitcoinica crash

Daily MACD is bouncing off and about to return to negative territory after a false bounce off ~0.

30d SMA (the famous Nagle chart) was 6.2, where it stopped rallying.

Sentiment is altered ever since the Bitcoinica 4.64 low. There may be other factors like the (political) issues around BIP 16.

And now my hypothesis for why this could be happening:

Bitcoin distribution is still very poor, as can be seen by the big sells, bid walls and ask walls which lead to a concentration of BTC.

The fact that we have had one year of difficulty 1 at the beginning along with a couple dudes from the cryptography mailing list and the same BTC production as nowadays does not help.

There is also little influx of new Bitcoin users, differently from what people hoped to see the Good Wife episode do.

Mh... I dunno, 0.45 USD/BTC would be dangerously low. Market cap dropping below 10M would already be quite extreme, below 5M could be dangerous and probably would call in enthusiasts. I hope it doesn't come to that, since the situation might endanger the Bitcoin market itself, depending on how wealthy or determined the true enthusiasts really are.

I still fail to fully understand the psychology of the people causing this whole chaos, I just know they strengthen mid-term trends and change their minds in some fractal pattern. But the chart analysis stuff is increasingly useless; everybody either uses it or expects the others to use it, and so the meta-analysis of other traders plays out like rock-paper-scissors.

Bottom line: it's Bitcoin, anything could happen.

Yes, exactly my thoughts when Bitcoin went IMO pretty low with 4 USD in September.. Bitcoin is kind of too small and too poorly distributed to exist. It’s a race for adoption, and we are losing it.

Chart analysis = pattern analysis = reading goat entrails = consulting the Oracle at Delphi :)

Now, for the fellow chartists: http://www.sierrachart.com/userimages/upload_2/1328458777598.png

We have 3 trendlines, let’s call them short, mid and long term.

Short term is broken, mid term is about to be tested now.

I know people don't like forecasts based on the order book, but tracking order book changes has been just as reliable as anything else.  So, it's worth noting that the order book appears to be flipping again with asks piling up.  Just a few days ago after some large movements there were less than 200,000BTCs up for sale.  Now there's just over 260,000.  This, in combination with recent long over-leveraging and trend line breakdown is good enough information for me to stay the hell out.  It's beginning to look like the correction from $7.2 is going to last pretty long and could be unnervingly deep.

What I'm guessing is another month or so after further downside from here.  Then a rally back up but not higher than $7.2 - maybe in the $5 range.  I see this sort of behavior going on for a long time so long as bitcoin adoption fails to pick up.

the speculation forum is just plain and simple madness.

the bulls talk about reaching 1 billion this year, the bears talk about reaching 0.42$ soon.

chill down, folks. listen to the music and relax^^

http://2.bp.blogspot.com/_sLarvC5E02A/Sa9wEbojj7I/AAAAAAAAABM/ZeLbF3f8dZ8/s400/rastaman.jpg

I bet you would have said the same if someone predicted it in May-August. ;D

yes, and 0.42$ turned out to be pretty offshore

Exactly.  Most people seemed to think it was utter stupidity to claim the price would fall back down below $5.

Learn to read charts, and trendlines are the last thing to look at..

This is the last stop down to get coins cheap..

Lets see what Volatilityoinica has in store for us this week!

That's what I've concluded.

IMHO, Bitcoin is a highly speculative commodity and "day-trading" with it is just gambling
your USDs away.

I leave it to the day-trading "experts" to ride those daily rallies, avoiding impending smack downs,  
divining fake or real Ask Walls, while conveniently blaming Bitcoinica and/or a Manipulator for all their
trading woes.  Have fun chasing that rabbit.

Bitcoin is great way to buy and sell stuff on the internet, and for those early adopters, maybe
it's an investment.

But if you're remotely considering trading in Bitcoins like you would a stock, please remember
the aforementioned words of wisdom: it's Bitcoin, anything could happen.

I genuinely don't know what is going to happen in the short term but from a long term perspective I still see no reason to panic or sell a single BTC. I'm staying out of this madness as well, but my position is 100% BTC. Unless something profound enough happens that changes my mind, I will keep this position.

The situation is quite neutral from a fundamental perspective, we've had some news recently but not much. At the same time Bitcoin is now constantly used more than it was used in the last 3 months of 2011. This is data from the transaction count. There have been some boosts this month such as people sending coins to exchanges for selling them and the recent Silk Road boost. But that doesn't explain that the transaction count is constantly high these days.

On the other side of the coin we still have the confidence decline that was caused by the "Bitcoinica event" and the confusion and doubt that has come from the BIP debates. The first issue will fade and be less meaningful every day, unless the people who caused the event forget about it and make the same mistakes again. The second issue is more fundamental to me personally but I have faith that the Bitcoin development team will be able to overcome that issue. This month and next month in particular is very important and revealing as far as P2SH and the entire development of Bitcoin is concerned.

In other words I have no other tools in my toolkit right now other than being in or out long term. I see a small possibility that the development issues will make me lose faith in the whole project within the next couple of months but only if they fail miserably. We will see. Otherwise I'm very much in.

32*0.06=1.92

Now do the same for 7.22

As much as I hate to say it, I don't much care where the price ends up anymore.  I've stopped trying to increase my bitcoin position and instead am primarily concerned with increasing my USD position.  Every few days when I spot a clear enough trend, I'll trade into BTC, then back out again as quickly as I profitably can.  Sure, this means that in the event Bill Gates come along and drops $10 billion in the bitcoin market I'll miss out on becoming an instant millionaire.  But, it also means I'm not going to lose the increase I've already managed to grab from people dicking around on bitcoinica, or if whatever-his-name-is-with-over-300,000-BTCs comes along and decides to cash it all out.  I'm staying in USDs and I'll swap around to take more of them from whomever wants to give them up.

I hope you're not seriously trying to predict future price based on that? To me that is just as relevant as trying to read Gavin's palm and predicting the price based on that, or looking at the stars for answers.

That feels almost like trolling to me.

No, I’m not. But I’m telling him that he would have found people crazy too if they suggested Bitcoin would decline that far back in May to August.

Also, if Technomage says there is "no reason to panic or sell a single BTC", then IMO it’s time to shit your pants. ;D

I'm a long term investor, not a trader. I only trade when I see a big enough reason to warrant that approach. I wouldn't recommend traders to follow my advice, that is a whole different ball game.

Right now the situation to me looks like business as usual. These threads are pointless.

Then you probably would have no problem with another 94% decline anyway. I think it’s a funny "what if" scenario.

Also, I have given reasoning in my posts #2 and 3 here. If you think my thread is pointless, then perhaps speculation is pointless. :P

What's funny is that in the days after things began to unravel back in June I was adamant that I wasn't going to sell my bitcoins, because things were going to turn around.  After listening to Nagle go on and on for a month or two I finally wised up and got out and I'm in a much better BTC and USD position as a result.  I'm not dogmatic anymore.  I hope bitcoin succeeds, I really do.  But I'm no longer willing to sit around passively and I'm willing to miss the astronomical adoption and price increase that so many think is on the horizon for a higher measure of security with what I've already accumulated USD wise.  When I can spend BTCs easily and securely on the things I want and need without it costing more than using USD, then I'll stay in BTC.  Right now, as I said, it's all USD for me and I only swap in and out to increase USD.

I would sell immediately if I saw a possibility of this because it would allow me to increase my BTC position significantly. However with the current level of Bitcoin usage that would be way off any correlation thus far and the market cap would be way too small to make any sense. I give this prediction less than 0,1% possibility, it can only happen if there is a fundamental decline for Bitcoin in general, and right now there are no signs of that.

I'm worried about some things related to Bitcoin but the sustainability of the price around $5 is definitely not one of them. It will be if these other things I'm worried about become more serious issues than they are now, but that is another day and I'll reconsider things then.

My only worry is the effect these threads have on sheep. The price movements right now are of no concern. My one and only reason to post here right now is to give the sheep another point of view. If the price is destined to fall it will fall, but less panicking will lead to a more stable Bitcoin price which is a good thing in my book. :)

I had a similar "epiphany" when I lost a few hundred BTC trading and made them back plus a few hundred more, proudhon. I can never gain any USD if I’m not willing to lose them, but the very same is true for Bitcoins!

What a long time it has taken me to understand something as simple as that.

Technomage, what kind of "fundamental decline" happened from June to November, then? And what has suddenly changed since the 2 dollar low in November?

indeed somebody crossing the speculation forum for the first time will have a pretty bearish view on bitcoin caused by all the madness on both sides..

Mmmm ... I think I rarely wrong, and "gut feeling" tells me - if these trends are a few lines are not broken down (I think they will not be broken down) then it will launch another rocket is above and beyond  :D it does not seem to signal a trend downward ... it looks like the end of the correction ...

You are giving Bitcoin a >99.9% survival chance? Sorry, but even as an enthusiast, I'd call this delusional. Trading on this is not a good idea, and would probably cause catastrophic problems in risk management. I'd probably not sign a paper giving USD or EUR >98% survival chance in the next year. You're a factor 20 off from there, and those are well-established globally used currencies.

Remind yourself, if your statement is true, you would accept a 1:1000 asymmetric bet on this. Are you sure that would be a good idea?

Just a reminder: be careful when assuming something like 99.9% probability. That's a whole lot of room for improbable events.

i am not a trader experienced enougth to identify 'the end of a correction', but i also share your bullish position: the slow uptrend-line formed about 2-3 months ago will likely hold, i think.

+1

Exactly. This is why most of these threads are made. People who hold mostly USD positions make these type of threads and they hope to increase their profits that way. The same sometimes applies for people holding BTC positions as well, but I definitely feel that people in this community trading BTC mainly for gaining more BTC genuinely care much more for Bitcoin than do the traders who trade for increasing USD only.

makes sense

Do you really think I believe I could manipulate the Bitcoin market via a forum thread? Don’t be ridiculous.

I want to discuss an absurd idea I had, and the feedback I’m getting from eternal bulls seems to support the bag holding that is possibly repeating from summer.

I have SHARED ARGUMENTS based on my analysis in my posting: https://bitcointalk.org/index.php?topic=62696.msg732366#msg732366

You haven’t answered them but instead come up with your typical "blah blah fundamentals; no reason to sell 1 single Bitcoin because UP UP UP".

I overshot with the 0,1%, the prediction is not that far off. I completely agree with you. My point was that I think these predictions are pointless until there is actually something real to support such a decline. I can't see anything like that right now which is why I give it such a low probability.

The overall probability of a disastrous scenario is course much higher just like you explained. We could see a technical breakdown or a successful attack against the network, or we could see BTC/USD trade made illegal. Anything can happen that would justify a very significant drop in price. But I won't even entertain such predictions until something actually happens.

Everyone knows Bitcoin is a risky investment in general, I'm prepared to lose everything. But to be completely honest, I give EUR a lower survival chance in 2012 than I give for Bitcoin. Euro could completely die, it's very unlikely that Bitcoin completely dies.

Euro will survive.

Part of the problem I have with this sort of claim is that all the chatter during the months long correction from $32 tells me that there is no set of conditions bitcoin enthusiasts would count as bitcoin-death short of worldwide nuclear extinction or something.

Euro will survive. bitcoin will thrive!  :D

Mainly three things have changed.

1) The core 3rd party services have improved and we have not seen the kind of issues we saw from June to November, such as the MyBitcoin incident and the Mt. Gox hack etc. Nothing of this magnitude has happened which has increased the overall confidence in Bitcoin.

2) Bitcoin has proven over the last few months that it's not a fluke. It's not going anywhere. The longer Bitcoin stays alive and well the better its momentum long term will be. It can't easily be dismissed as nothing anymore and in a year or two nobody can say that anymore (if it continues to stay alive and well for a few more years).

3) This is something more tangible which is the actual usage of Bitcoin, based on the transaction count. Unlike the node count, which is entirely irrelevant due to the ever increasing usage of light clients and web wallets, transaction count actually matters. That graph is looking healthy to me, especially when taking into account that the price of $2 was clearly a major overshoot.

http://blockchain.info/charts/n-transactions
http://blockchain.info/charts/n-transactions?showDataPoints=false&timespan=&daysAverageString=7&scale=0

I admit it's not looking like we're going to the moon just now, but I'm not claiming anything like that. I'm simply saying that things are not as bad as some want to believe.

The sad fact is that there are tons of really good things going on in bitcoin development right now.  Infrastructure security has improved remarkably since June.  The client is getting better and better.  There was a fucking TV show devoted entirely to BTC, and there's a nice looking bitcoin magazine on the horizon, and yet the market simply does not care.  What this tells me is that the damage done to public perception by all the 2011 shit was severe.  Quite honestly, I think it's the well established bitcoin community responsible for the upswing since $2 and holding prices at these levels on the hopeful anticipation that the rest of the world will come around.  That can't go on forever.

1) I still see scams and hacks, but yes, it’s much smaller scale.

2) Yes, it’s really not going anywhere. WHAT has Bitcoin "unlocked" since Silk Road came out in February 2011? I’m serious, there hasn’t been anything significant since SR. I immediately bought Bitcoins when Silk Road came out.

3) Transaction count is meaningless because it can be manipulated with "fake" transactions.

And … Has any fundamental data helped you come to a decision where you could sell Bitcoins high and rebuy lower? The price is usually the leading indicator for fundamentals. For example, the MtGox hack happened AFTER Bitcoin topped out. The hacks and scams and shitty atmosphere happened AFTER, WHILE and BECAUSE Bitcoin was "consolidating" 94%.

your post is a good example of why i think you are a benefit for this forum :)

..it can't go on forever, but it has enough time left. patience.

+1

I actually agree with this 100%. Even though I'm a long term thinker, long term doesn't mean forever. Eventually Bitcoin has to pick up some real speed, as a starting Bitcoin enterpreneur I certainly hope it happens in the next 2 years and I'm actually going to spend majority of my time trying to help with that.

The great thing about the economic model of Bitcoin is the fact that there is a major extra incentive to develop Bitcoin. If you hold bitcoins and create something of value to the Bitcoin economy, price will increase and your BTC is worth more. This is one of those things I like about Bitcoin.

I agree.  Bitcoin so far is a horrible currency.

It’s not a currency at all. There is not a single community which would accept Bitcoins because they are Bitcoins, and not because they are worth xyz Dollars according to some Magic the Gathering exchange, where the exchange rate is decided by speculators and Bitcoinica casino players.

It’s evident when you see the system Silk Road has in place. The prices are even given in USD.

You also buy Bitcoins. Obviously, you buy them with money. When you sell them, you get money. The fiat is the money and BTC is the asset.

this will change

in a few years thebitcoinreview.com will offer bitcoin spending insurance, are policy will be so long as you spend your coins from one of the sites listed we will guarantee your satisfaction or your bitcoins back. this service will be free.

i need a few years to get to know all the truly reputable merchants

I've seen no evidence of this, until I see proof that this is actually being done I still see that count as one of the most reliable indicators of actual Bitcoin usage.

The relevant factor here is that Bitcoin would've never "consolidated" to $2 if these hacks had not happened. That was a major overshoot which was helped by these events.

i dont know about you but i dont like to do a transaction for no reason...

faking one seem kinda pointless

I understand that you guys are bearish if you truly see Silk Road as the only usage for Bitcoin. I find that sad and I hope you give up on Bitcoin because spreading all this FUD isn't helping anything.

What you're talking about is a fundamental issue and I respect that. But I see Bitcoin as a long term project, it will take years until it is a convenient and safe payment method accepted in many places.

My own experience is very different as far as using Bitcoin is concerned. I've never used Silk Road and I never used Bitcoin during the summer. Now I've actually used Bitcoin many times and it seems that my average usage of Bitcoin is increasing on average every month. I've always wanted to use Bitcoin and it's becoming more usable slowly but surely.

I still expect it to take many years until I can call my Bitcoin usage significant compared to my fiat usage, but there has been improvement. I find the Android wallets especially convenient and I tend to use them a lot among my friends these days, mainly to settle small debts.

Quite possible.

Makes it all the sadder is that just a few well-placed buys/sells can transform Bitcoin dollars into pennies overnight.

To be fair though... so far, they were right.  $2 was hardly "death".

should we go down to $3 people will buy again. many are only waiting for an opportunity.

the bitcoin story is just too good, maybe even too good to come true quickly.

ITT:
http://imgs.xkcd.com/comics/extrapolating.png

'chart analysis' is just looking at price and volume data presented in graphical form. do you ever glance at the price at bitcoincharts or mtgoxlive? do you use the information you thusly glean to inform your trades? congratulations! you are an analyst. now stop bitching.

+1

pattern analysis != reading goat entrails

How you could think otherwise baffles me.

Back in September, the price stopped its decline and even went through a few rallies.  We saw all the bulls pontificating on fundamentals.
Now, the price has stopped its rise and has gone down a bit.  All the bears are talking about fundamentals.

;)

edit: I still think the price will go to $4 soon.

While it's undoubtedly usefull the way in which analysis of charts has often been used here is somewhat arbitary at best and dangerous at worst, Eliot waves, guessing at trend lines where hundreds of lines could apply in some way, triangles, (to some extent wedges) etc... The entrails comment is a valid one.

i can agree that none of the above methods have much more validity than entrails.

I also concur.

Thanks for the lesson.  It's a common theme you will find.  Everybody thinks they need to teach us this sub-forum is no more than a playground, and the market is more like a battle ground.

But, keep preaching the lesson, it would suck for the newbies need miss the lesson and hand over all their money based on some clowning around.

Update http://www.sierrachart.com/userimages/upload_2/1328494454347.png

Price has bounced off the mid term trendline for the second time now. We may have done a double bottom, but there has also been a kind of double top at 5.8.

Interesting stuff going on for sure.

It's the Batman trend (https://bitcointalk.org/index.php?topic=56025.msg666745#msg666745)!

Sometime I feel like ignoring everyone in speculations threads,

How can you spew up so much non-sense,  Bitcoin market is based much more on fundamentals than any other penny stock.

I don't know what the F you're you're talking about,   How can btc get to 50c without any major news ???

they were thinking, they could bring down the price with their thoughts! hahaha

scary thing is, they had these thoughts and then the price went down just a little bit more.

why would you assume any of that?

[Early June 2011]

See it?

Why the hell not? There’s been a rally from November to January, so if we consider it over, it’s interesting to extrapolate how much downside we had last time a 3 months rally ended.

You shouldn’t take it seriously. I don’t think it would go that far. It’s just a provoking thought experiment. :)

with the possible outcome of killing bitcoin. congratulations!

think about it out-of-the-box: bitcoin trades for >5.3$ since one month, and you come here and tell us seriously you are doing a "provoking thought experiment" when you spread FUD about bitcoin droping 94% to 0.5$?!

its like doing a fire insurance on your neighbours house and then starting to play with fire at his place, tell him that you really think his house burns already, and if he says "no, it doesnt" you say "well! that is just a provoking thouhgt experiment, what IF your house burns to the ground like the house of my other neighbor did (where i also had a fire insurance and played alot with those neat lighters)?<insert trollface>" ..

 >:(

u mad bro? I think you need to adjust your risk management regarding Bitcoin, clearly you have too much at stake. ;D

So someone makes a bearish thread and then suddenly everyone sells and Bitcoin dies? If so, I think it deserves to die.

Interestingly enough, if you compare the magnitudes of each rally and assume that they will drop as much as the first rally as a magnitude of the percentage, you get a "perfect" estimate of a 33% drop from our high of $7.22, bringing us down to $4.81.

...God damn 33% percent retracement rule.

+1
We all have to bear the burden of socializing Bitcoin in order for it to succeed.  This is not such an easy task for the introverted, and it could well serve to change some individuals for the better in rather unexpected ways.

Ok, so now I'm convinced that somebody just in principle wants the price to go down.

And he is doing it right now !  :(

Wat do, proudhon? Wat do? :(

Patiently awaiting yesterday morning prices to get some coins :)

The trendline I have drawn seems to be violated now. I was wrong about the 5.45 bottom.

http://www.sierrachart.com/userimages/upload_2/1328702815301.png

I see this as a manipulation attempt based on the predictions of what will happen if $5.4 breaks. It doesn't make any sense otherwise, someone who simply wanted to exit the market with 40k BTC would've sold smaller amounts at a time, not all 40k at once. The market had no signs of crashing so the seller would've got a much better price by selling in smaller amounts. That dump was very intentional, the question is will people fall for it. I'm not falling for it.

Yes exactly. I haven't yet myself. Panic doesn't appear to have been started yet. Watching things.

It’s good to see how well Bitcoins are distributed so that people can just dump 40k, really.

What a relief! I am thankful for our early adopters. Makes it awesome to hold Bitcoins.

What makes you think it's an early adopter?

Just three months ago they could've got 40k coins for $20,000 $80,000... which is not outside the grasp of an average person.


(edited to fix my stupidity)

They never got far below 2 dollars each, which makes 80k $ for 40k coins.

Duh.  Sorry; that's what I meant.  Pillock that I am.

Humanity had a similar consolidation 70000 years ago when we went down to less than 10000. Extrapolating with your method means we died out about 65000 years ago. Sounds entirely reasonable. Thanks for pointing that out. How stupid to think that we're now at 7 Billion.

Maybe they know something.
https://i.imgur.com/kQRn0.jpg

edit: I am not sure it is a loosing operation. thinking....

Just like this?: https://bitcointalk.org/index.php?topic=52336.0 :)

Zhoutong, could you let us know if any or what role Bitcoinica is playing here?

http://bitcoinx.com/pics/dump.png

MOST OF IT!!!!!!

Nothing. The total forced liquidations today is less than 500 ฿.

Just glancing at the daily bitcoincharts chart something like 75-90k bitcoins have been dumped today.  Does somebody know something?

Not exactly - there was a dump - then  someone was buying up, and now there was another dump.  It all looks like someone with really big money was just playing and checking our reactions.

Looks like those dumps have lesser impact on the price these days. Some time ago this amount would cause crash and panic, and today price hardly moving.

Your favorite chart, the total bid depth is down about $200,000 in the last 24hrs also.

What do you mean? Do you think the sellers know something we don’t yet?

So are we going to hell or not?

Everything seems to be in stasis... somehow...

edit: typo fixed

So now someone rash who likes big movements has a ton of money sitting in Gox?

Free money?

thanks for the info!

so there are other players at work... quite interesting

Ah well, let’s bump it, then.

http://www.sierrachart.com/userimages/upload_2/1329182327128.png

You have served me well, uptrend. Thanks. See you next time. :)

Damn I'm good. Let's see if this holds...

Damn you're good :o

VERY good!  :o

That's also the first level bottom S5032 predicted. Just sayin'  ::)

I am a big fan of the 33% retracement, I don't fully understand it but it seems  very real to me.

When we get to 4.81, how can we see the up "retracement"?

I wonder what will happen if we go below 4.8

42% correction so far. I will edit the title every time it does a new low.

I have a feeling that will be soon.

Yup, set phasers to short.

No, you say it backwards in front of a mirror......

Elgan... Elgan... Elgan...

OH SHI....

http://ofrecord.com/economy/chart-off-computer-screen.jpg

I'm starting to think what will ultimately destroy bitcoin is the concentration of coins from the early days.

Or... alternatively, there will be an uber crash which eventually will lead to stablization.

IF that is the case, there should be diminishing volatility as coin distribution involves market movements instead of hoarding...

Maybe.

OK, time for an update. 46% correction.

Can we go further? We will see.

This is why the distribution process of Litecoin was done in a fairer manner. But then again there are arguments for and against litecoin.

Litecoin does not solve this problem, it just does the same thing on a different time scale. It's a misconception to think the price swings are a property of the coins or initial distribution; it's a property of the traders we have. The volume causing all this is massive, even compared to the total amount of Bitcoins out there. It's caused by strange behavior of speculators, and heavy fluctuations in the inflow of money.

We need more time. Speculators that stabilize price will slowly accumulate a part of the coins and dollars on the market, slowing down the rough ride we're seeing. But that isn't achieved in just a few months, as I've been saying for almost a year now. One year of the trading chaos is not a long time considering Bitcoins have been minted for more than three.

Does anyone actually want a stable flat and level line price?

I'd love a much flatter graph than the current one. A normal currency or commodity graph would do.

That would be enough. As hot as silver has been for the last few years, you won't see a 40% swing in 3 days.