Bitcoin Forum

It looks as if the two main markets, bitcoinmarket and mtgox, are stabilizing around 5.5-6.5 USC/BTC.  The outliers and quartiles have been tightening for days now, and now the values are centering in that range.  Thoughts?  Could it be that we've established a market value?  That would be a major step toward currency confidence and widespread public use.

It does seem pretty steady lately. I think with volume so low compared to the total supply we are likely to get some swings for a while yet though.

I think it means that the market is now maturing since we now have lot of bitcoin volumes to work with. However, a big bitcoin "killer business" will cause a sudden growth spurts, thus wide oscillation in the bitcoin economy. This just mean we have established ourselves a working economy. Now people will need to to work toward a killer business that will encourage major growth.

The stability is, at least temporarily at an end.

Starting in the early hours (US time) mtgox.com began to surge, so far reaching 0.0735 USD/BTC.  Temporary surge?  Probably, but how long will it last and how high will it go?

Now, I am 3 dollars in profit since the beginning of the bitcoin spectulation career. Now, I can spend some of new profits into black swans bet. ;D

It's been stable the whole time I have been involved in bitcoins, with some fluctuations.  However right before I got involved it increased in value, relative to the USD by about tenfold.  As far as I can tell it had been relatively stable prior to that.

Considering how tiny the market is currently of goods and services available for bitcoins I expect the value to shoot up again if there is a sudden influx, or to crawl up slowly if there is a gradual trickle.

Agree!

One route to broaden bitcoins is to increase activity and have more people sell stuff at BIDDINGPOND.COM

Currently, there are too few sellers. If some folks start selling there, this could change the game.

Too few buyers! People are selling money over there and it's going way under value.

Selling money on biddingpond is silly.  Well, I guess not if it is money that isn't traded through one of the exchanges, but selling dollars or euros there is silly.

I am kind of surprised there is not a Russian exchange, considering how many Russian members the baord has.

There already is a Russian exchange. Look in the marketplace forum.

So there is, I missed it.

         The best way to get greater adoption is to find a way to let people earn them for doing things ie working for them. When people could earn them easily for generating there was a lot more buzz around the idea.Now that its not easy to earn them other than selling goods its died off a bit. Even clicking on an offer to earn a few coins is a lower barrier to entry than trying to come up with a product to sell.

There are quite lot of opinions on how to increase adoption of bitcoin, here and elsewhere.

But anyway, creating a way of doing bitcoin jobs like Mechanical Turks is a neat idea. I put it down in my list of niches to fill. (http://bitcointalk.org/index.php?topic=1268.msg13828#msg13828)

I second the Mechanical Turk idea. I was planning to start a thread about that.

It could probably be a sinister way to do guerrilla marketing.

Thanks kiba. I was thinking more of a system like freelancer or odesk.

In any case, the price for bitcoin is stubbornly stable.

The market has determined that is exactly what btc is worth. Its quite impressive it has remained stable for so long.

the exchange rate will never be stable for long periods. There will always be fluctuations depending on supply & demand and on herding/psychologie (see elliottwave.com)
currently in my pov we are set for a breakout soon
i think it will be on the upside based on technical factors

A stable exchange rate will be a good thing in the long run.  It will mean less upkeep for businesses.  Any period of sudden inflation or deflation means price instabilities and confusion because not only is the current price different but the seller and buyer cannot be sure that the price will be the same tomorrow. 

I do expect bitcoins to continue upward for a while.  I don't know what their equilibrium level will be and I also expect them to act as a hedge against dollar inflation and move upwards relative to dollars at a fairly slow rate, however I do hope that they settle at a relatively stable spot relative to standard goods and services because that will give them more utility as a medium of exchange.

One of the reasons Dollar's are useful as a medium of exchange is because their worth, while continually slowly decreasing, is decreasing at a relatively known rate.  If I agree on a price I know what that price means as far as opportunity cost, both now and later.

A fluctuating currency has unknown opportunity costs which makes commerce much less certain.

It is an illusion to believe that any exchange rate will be stable. There will always be fluctuations.

I agree with you that there are some exchange rates that will be less unstable than others, and that bitcoin may be one that is more stable relative to real values.

Life has unknown opportunity costs. The exchange rate is a piece of knowledge that can help us learn a bit about what those opportunity costs are. A sudden change in rates simply means that a lot of people just revalued at least one of the things being compared.

I expect the rate to go down on the medium-term (3-6 months). Only a small percentage of the bitcoins in existence are being actively traded, and a great number are known to be owned by people (not lost). I also suspect that the rate of inflation is greater than what the market can absorb.

we will see what happens, the market will tell us :-)

Agree, media coverage it a factor that can significantly impact the bitcoin economy, to the positive or to the negative.

From a bitcoin trading perspective  , the only thing that counts is the price action resembled by the price charts.

The chart can already be used well for technical analysis, and this in my p.o.v is poised for a breakout on the upside towards 0.08-0.09

I would argued that mainstream media is not just one of the factor. One possibility is that the booming amount of web services that accept bitcoin will drive the price of bitcoin up. If the media noticed the growing number of web services accepting bitcoins, than it goes to reason that media are compounding factors.

It's a chicken and the egg thing.

Just seen that in the bitcoinwatch.com (http://bitcoinwatch.com) site we have Russian Rubles included.

Great progress!

Where is EUR and JPY?

Where is an open market for EUR and JPY?

I have not seen any open market for EUR or JPY

By the way, the difficulty for block generation just increased from 917 to 1318.

This should boost the BTC/USD rate, all other things being equal.

The relationship between the difficulty and the exchange rate is complex.  Probably too complex to even define.  I doubt that it will have a noticable effect on the exchange rate.

I don't think the difficulty will affect the exchange rate.

7200 BTC will be created daily (on average) no matter what. Whoever gets this is generating, which means they find the current difficulty to be profitable for them. They might bet that the value of BTC will increase in the future, but they can't force an increased rate on the market right now -- no one would accept their offer.

So we are one month into an astonishing stable exchange rate period despite high inflation rate.

But we all know that stability cannot last forever....

agree that it won't last forever.

We will get a breakout soon. IMO it will be on the upside. But clearly, downside is also possible.
if we could trade options, a strangle would work brilliantly in this point, because volatility is so low.

And by the way, over the last month, BTC value has dropped -10 to -20% vs most currencies. It held up in dollar terms, but at the same time the dollar fell against most other currencies.

Volatility is only low because volume is low.  Volatility will go through the roof the instant we get any amount of volume.

So 10,000 of bitcoin getting sold no longer have a great effect on the volatility of bitcoins?

Volume used to be lower and volatility was higher, this is what I would expect. Why do you think the opposite? Something to do with bitcoin in particular?

No, just comparing relative to just about any other global market :)  The average bitcoin USD-equivalent daily transaction volume (150000 BTC * 0.07 USD, rounding up generously) is less than $10,000/day.  That's all bitcoin transactions, including maintenance transactions such as moving bitcoins from one wallet to another.  Even compared to the smallest pink sheet stock, BTC dollar volume is tiny.

That's a drop in the bucket, for anyone who calls themselves an investor :)

I consider the current BTC volume quite low.  Market prices would be easy to manipulate, as its current, tiny, size.

Is there some way of manipulating that does not reduce to paying more than you need to to buy bitcoins or getting less than you could for selling them? Those two sound like gifts to me.

A guy brought lot of bitcoins on mtgox and it didn't exactly goes as planned.

define "lot"?

34209.3 bitcoins lot.

volatility is low predominantly because psychology is balanced. Market participants are split between the belief of a rally or a decline.
volume is only a consequence of the former.
like with any other global market we are in a consolidation/ sideways pattern which is almost always accompanied by low volume.
only if expecation balance changes in any direction, volume will pick up substantially.

Example:
more people think BTC will increase in value. Some of them want to anticipate that and buy coins. To get the amount they want the bid prices up above last weeks high. Others see that and jump on the boat, driving prices further up. Some others whi did not trade for a while find out later and are worried to miss the rally and bid prices further up... Volume rises a lot..

The inverse happens to the downside.

..and the low volatility and stable exchange rate helps increasing the stake .. :-)

How do you know what his plans were? Maybe it went exactly as planned. Maybe he knew that 30,000 BTC wasn't enough to crash the market and he was only trying to lull traders into a false sense of security.

Or maybe those 30,000 were a weather balloon.

Maybe next time he will dump 1 million bitcoins.

--> foreeverdamaged
You are right that with 1 million bitcoins the market would crash, but to do that, he would get less than 0.02 for his remaining 960,000 bitcoins and for most of them even less..

And there is no certainty that even that even such a hard crash would keep the market price down.

Agree, if psychology and confidence in bitcoins would still be good during this crash, traders and BTC investors would step in big time and buy at cheap prices, similar to the May 6 flash crahs

The bitcoin market has picked up in volume massively over the past 48 hours. We are almost at an all time high volume.

Let's see that sign this will bring...

https://mtgox.com/trade/history (https://mtgox.com/trade/history)

High volume! Not much fluctuation in price, for now.

Correct.

Biggest resistance is at 0.062. There is a 10,000 BTC+ sell order at that level. If this can be broken, then there is little resistance (=few sell orders) until 0.064

I agree that the automated trading helps providing liquidity.

At the same time, there is accumulation happening overall in the btc market , with a breakout to the upside more likely than a decline.

On by the way, idont hold large positions, I am not talking the market up. I just offer my technical analyst experience for perspective.

Does anybody know of open source software that performs automated trading?

I found http://www.geniustrader.org/ but perhaps there are others.

How do you interface your auto trading program with MtGox? Do you simulate keyboard input or is there  a less clumsy way of doing it?

MtGox is easy:  it's all JavaScript, which means the code that handles login, buy, sell, add, withdraw is publicly visible, available for inspection and study.  It uses HTML form values, HTTP cookies and JSON data.  Any web programmer worth his salt knows how to use those.

Massive quantity of volumes are exchanged in a few days in a row. Possible slight movement in price.

I also noticed the high activity rate for the last 5 days or so and the appearance of a few new highly active users. Perhaps bitcoin community growth has fueled the volume? Or not, we can't be sure anyway.