Bitcoin Forum

Let's talk about what's driving the action.  I think that the last few weeks have been all about whales getting in (and the few bitcointalk traders that were still short).  Whales and institutions have longer memories; they've been watching the situation since the last bubble.  I think that the general public has yet to move... not enough news stories to trigger the fever.

WRT recent action, that at 665 after a 4 hour run from 630 was NOT positioned for short term gains.  And it was way too close to the action to be an attempt to bolster the price.  Those coins are going into someone's cold wallet... it may have encouraged some subsequent selling action but the trend is that we are chomping thru supply, whether by buying ask walls or luring the sellers into a bid.

This one may or may not have something to do with apple terms of service.

correct.

What i think....Its heading summer, the stock exchange market gettin low volume during summer months. Share holders/ daytraders packed it up for holidays, trying to get most money out of the exchange so they dont have worry during holidays.
Perhaps the traders that are left still want to make money and join the bitcoin market because of the action

No that might have been the trigger to buy all at once but fiat had to be on exchange... a couple million.

So will negative ECB interest rates make consumers run to BTC?  Or it is too small to matter...

to small to matter

I missed it. Was there an apple news?

O think that the current pshycology is bullish everywhere, some people are triying to buy the btcs they can while others are acting like bears to see if they can turn the price down just to buy cheaper coins.

I think it's just this: https://bitcointalk.org/index.php?topic=632518.msg7042633#msg7042633

Again.

I'm confused by this comment.

Are you talking about people who trade on traditional stock markets or about Bitcoin day traders?

The news seems to small to matter right off the bat, but I think that we will slowly see price increases due to this...

traditional stock markets enter the bitcoin stock markets

we are now in purgatory.  Will the weekend whale strike?  Long interest on Bitfinex has been incredibly high and shorts extremely low this week.  These are weak hands and they are getting nervous at the triple-top-that-is-really-so-close-in-time-its-just-one-top.  And they are looking at the periodic bubble chart and noticing that after such an epic peak (10 to 1000 in a one year mega-bubble), minor bubbles occur -- minor bubbles like 450 to 680 perhaps?

At the same time TA followers are salivating at the long-term cup-and-handle currently drawn in the 4 month chart, and the accelerating march of adoption is telling people that these could be the last few $600 coins.

Who will flinch first?

I like the idea of a thread dedicated to market psychology. I'm working on a, still very crude, semi formal system to classify what I would call 'market narratives' to at least get some approximate idea of how my interpretation of market sentiment "performs" over time.

Looking away from the action of the last few days, I think the main driver of the market currently is "unwillingness to sell at current prices", low selling pressure, same thing I guess.

There was enough fiat sitting on the sidelines to turn the above into a +45% rally, but the biggest question to me right now is: will selling pressure return before buying pressure (mainly through new fiat, I believe) does, or will whatever fiat is /still/ sitting on the sidelines be convinced by the lack of selling pressure that it might as well enter the market now.

It is true to say that the leveraged longs on Bitfinex are very high at the moment, if indeed not maxed out going by the hike in the swap rate from 0.1% to a whopping 1% per day during one of the $680-$620 slides. Have you however been watching the wall action on Bitstamp over the past few days. On a few occasions it seemed as though Bitfienx and Huobi wanted to break out of the downtrend, but there was a 1500 BTC Ask wall on Bistamp at $675 that nobody seemed to want to bite into. I would suggest that this held the rest of the markets back. The resistance was tested at $670, and held, and then the selling pressure picked up and the massive wall was gradually moved down in increments of $5, decreasing in size a little each time, until it sat at $655 at around 1100 BTC strong. This wall sat there as impatient traders started to market sell into Bid wall. The bottom came with some 500 BTC being market sold into bid wall which caused test of pennant support trendline at $635. Then as was pretty predictable, buying pressure kicked in and took us back up to $655 1100 BTC wall. Perhaps the whale was asleep and wasn't trusting his wall dynamics to a bot, as around 300 BTC of buy-ins were taken out of the whales wall. The whale then removed his wall, and (probably) bought the 300 BTC or so of bid offers that were placed below his 1100 BTC wall, possibly in order to replenish his lost BTC.

A bit long winded perhaps, but what I make of this is a blatant whale market engineering attempt. The market has been intentionally corrected at $680 , where selling pressure has been tested, and supported at the 23% Fib retracement level ($610-$620). From the first correction from $680 to $614, the recovery came about as the result of some quite inexplicable buying patterns, whereby a whale made a 600 BTC market order on Bitstamp into such a thin market that the price rose by $30. This was followed by a 750 BTC Bid wall at $665. This strategically deployed buy-in pressure and all the rest of the organic to-ing and fro-ing of Bitcoins during this, provided the high volume required to form a seemingly bullish cup n handle formation on the Bitstamp chart. That failed, and Bitcoin has been converted to forming this current bullish pennant formation, which the 'Wall Guy' I describe above has clearly been trying to engineer.

What I am suggesting is that this market is to a large extent being stage managed by powerful market players. The activities of 'Wall Guy' that I described above, is perhaps evidence of someone wanting to push Bitcoin down to trendline, and then allow it to rise back up without him losing any Bitcoins in the process. He has adjusted the sizes of his strategic walls, and only moved it down so far as to push spot price to the pennant support trendline, but not beyond. His removal of his wall followed by the buying of a similar amount of coins that was taken out his wall prior to it's removal, is suggestive of attempts to coerce Bitcoin back up to resistance, whilst recovering any lost Bitcoins in the process, suggests that not only is this whale entity trying to shake out weak hands and engineer positive chart formations, but that he is also bullish on Bitcoin, at least for now.

My take on market psychology right now is that frustration prevails, but the weaker Bitfinex leveraged longs and other weak hands have mostly been squeezed for now, most participants believe Bitcoin will trend a bit higher yet, or may well even be on the cusp of another of it's famous bubbles and are not so willing to sell. The 'Market Engineers' have tested the markets resolve, and perhaps after allowing the market to thin out to a crisp, will attempt to ignite it with a bout of buying pressure, which if all goes to plan and enough capital in the market takes the bait, will result in another strong move up.

I see perhaps a retest of $640 (the lower limit of this bullish pennant). I no longer think that the market is going to break down the way, except perhaps for the sort of false break that Bitcoin is famous for, which happens nearly everytime Bitcoin leaves a consolidation zone.

I am confident in the market for the time being. With the pending crossover of the Weekly MACD, 10/21 SMA, and the 200 day SMA currently being tested, I would say that the Market Engineers must surely be thinking that now is as good a time as any to try and engineer a massive price surge in Bitcoin. Whether enough organic buying pressure can be whipped up to take out ATH remains to be seen, but with these strong indicators at their backs, they can surely get a much higher price than $650 to perform a mass sell off into.

The USD swap offer rates did indeed shoot way up during the most recent price surge. They have been slowly edging downward over the past few days, not all the way back to 0.1% yet, but they just crossed into the sub-0.2% range. (btw it's the 30 day rates that I am paying the most attention to.) I interpret this to mean that the recent market inactivity has given people enough time to deposit USD into bitfinex and take advantage of the high rates of return. This extra fiat and relatively lower rates will make it more appealing for people to go long on bitcoin when it makes its next move upward.

looks to me like some panic buying gripped the market today... could there be more in our near future?  ;D

The lending rate is a bullish sign.

My dad always said no! when I wanted ice cream ...

Most people satisfy rather than optimize.  If the water is fine here, why should I swim over there?  All the positive news is great preparation, but the next bubble won't happen without a kick -- some negative news in the fiat world -- that drives people to switch.

Lots of cash waiting for the right moment to buy in.
I think it's now, but I guess all those who never lived a bubble and are beginners with btc investment need more solid "proof" that it is here to stay (some sort of big news).
This means they will buy in a bit later that they should, but it's what happens in all bubbles. Then comes the snowball effect.

I'm not sure we need news to start anything. I tend to fall into the "price follows price" camp. There's so much money waiting to buy in right now, waiting for whales to show that the bottom is in. But I'm also not convinced that the time for bubble is now. :)

I think the market is feeling a "calm before the storm" type dynamic again.   We have had price stability for a good run now, and it is about that time where people start calling for the volatility to come back.   

  A lot of market analysts are looking at this thinking that it is a bullish sign, and that we may be headed up from here.   But the last time everyone started saying that the prices were "boring"   we went literally straight down.

I think the market now is set to left behind those people who are unpatient and are desperate of the current price, you can expect even a dump here.

This ^

The next time the world has a financial crisis, Bitcoin and other cryptos will soar to the heavens as central banks around the world print to oblivion.

Very clever, and it will happen for sure, better to the bitcoin infrastructure to stand up before that, if we had a 10x raise with Cyprous and another 10x raise with China (this one without having any financial crisis) what can we expect in a crisis scenario with a huge nation like USA? i think we could see a 100x raise in days  :D

I think we are in financial crisis. US debt is set to climb higher than 20 trillion and is not stopping.  Not to mention argentina, spain, etc. Its just not being acknowledged by everyone, its almost being kept quiet by the media under reporting.  I also remember a few months back a bunch of banker "suicides" that seemed awfully similar in manner and time frame.  Makes you wonder what is going on behind the scenes?

Corruption. But it'd have to be way higher than people thought for it to cause this much of a financial crisis.

Are we feeling the pain yet?  :D


This is what I think; its total speculation.  Miners have been holding a significant portion of their supply hoping for an upwards bounce.  But those coins eventually needed to be sold to make ends meet.  Essentially you can think of it like these miners were leveraged long (borrowing $ from their own bills that must be paid).  As the price slowly dropped, we approached the line where certain miners had to sell to make sure they could keep the electricity on.  This became a cascading effect, driving a rapid price descent.

I'm waiting for the hash rate graph to flinch.  This will indicate that some miners are shutting off units, which will tell me that we are approaching the marginal cost to produce a coin.  Shutting off miners will reduce supply, and likely indicate a bottom since utility (as measured by metrics like transactions to new addresses) is still increasing.

I like this theory! So you figure the cost is in the $300's somewhere for the more efficient mining setups?

Hmmm . . .  gotta chaw this over. However . . . it is a reasoned thesis; and that's what I came lookin' for.

Mark (IndiaMikeZulu), Australia

Idk it depends a lot on the cost of electricity and a little on the production cost of the HW.  Anyone have the latest stats?

I don't understand how would shutting down miners reduce supply as a whole. 3600btc/day will still be mined.

This is a common misconception, and requires a background in control theory to intuitively grasp.  But in essence the difficulty adjustment trails hash rate changes.  So for example for the past year or more 4000+ btc/day have been mined on average because lots of hashing power has been entering the network, but the difficulty only adjusts approx every 2 weeks.  So the transient extra hash power results in a faster block confirmation time.

The opposite will happen if mining capacity goes offline.