Bitcoin Forum

Some traders have tried to compare the current BTC bear market to the 2013 BTC bear market (the downtrend from the peak of the first 2013 bubble at $250) in the past. Turns out that the 2014 bear market looks nothing like the 2013 bear market, as I think everybody realised by now.

In fact, I am arguing that this current bear market played out very similarly to the 2011 bear market (after the peak of the bubble at $32). A time when BTC could only be traded at MtGox.


Here are the pics:



http://i59.tinypic.com/357r9ev.png






http://i57.tinypic.com/2d9d282.png





I am not saying BTC will double bottom at $275 and it will be up from there nor that the bear market is over.
I am just pointing out striking similarities between the two bear markets. For all I know we could break the current bottom.
I leave the conclusions to you.
The time frames are different and the 2011 bear market went progressively lower each time, but the moves are the same.


What do you think? Can the two bear markets be considered similar? Not at all? Does that imply something?

or maybe it is similar to the 2014 bear market  ???


these comparisons are asinine. the dynamics and structure of the Bitcoin ecosystem are so entirely different from 2011 there is no way you can compare it to the present situation

Good catch! I agree they looking very similar. We can only hope they have similar end results  :)

The 2011 bear market began after the golden age of GPU mining, the 2014 bear began after the golden age of ASIC mining.

The bottom happened about the same time as the electric cost exceeded the trade value, the period was quite brief. In order for that to happen at current difficulty price would have to tank to ~100-120.

The 2011 bear market double bottomed after six months, then went up. However, the 2014 bear market kept going down for ten months until October,so it's not quite the same.

Nothing new, I have the same opinion, except that the seller pressure is now much lower than in 2011, and IMO that's why it takes so much longer.
My guesstimate of the corresponding position in the 2011 bear market is about the 22nd September (but back then the EW were more distorted).
Here are the charts from October until 2015 January 30th (but it may last longer than that) and 2011 last part of wave C.
The indicators are shown in times frames that allow easy identification of the EW sub-sub-waves.

http://bitcoincharts.com/charts/chart.png?width=940&m=bitstampUSD&SubmitButton=Draw&r=120&i=Daily&c=1&s=2014-10-03&e=2015-01-30&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=MACD&i3=MFI&i4=StochRSI&v=1&cv=0&ps=0&l=0&p=0&

http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=60&i=6-hour&c=1&s=2011-09-08&e=2011-10-21&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=MFI&i3=MACD&i4=StochRSI&v=1&cv=0&ps=0&l=0&p=0&

The market was much smaller back then. Hence, why it crashed much faster. Larger markets generally take longer to find a bottom. Just look at the pace BTC crashes vs gold/silver.

Yes, as I said, they are different in this respect, but the shapes are the same. They are fractals.

It's possible that news of the auction could push the price down to a double bottom. If that happened the moves would be the same, but we'll have to wait to find out.

Interesting.
Yes in fact it would be perfectly possible that the price right now is in the equivalent of the 22nd September in 2011...

Interesting too, but are you sure it's at 100-200? I am not an expert in this but I've heard some folks talk about the low 300s high 200s as the underwater point.

It depends on whenever you have a recent miner or cheap electricity. IIRC at the $2 bottom electricity costs exceeded trading costs even with fairly cheap electricity ($0.1 per kW/h) and a recent GPU. To determine that I used the Bitcoinwisdom calculator with 0% difficulty increase and tweaked the price till about every ROI was at infinity.
It may be lower still because the calculator should take the block reward reduction into account but it's just a ballpark figure anyway.

Where I live I would already be underwater for most ASICs (I pay  €0.2 per kW/h).

Reversal at that point makes even sense from a supply demand perspective: People who are looking for the cheapest way to obtain as many Bitcoins as possible are mining most of the time and once it's not longer the cheapest way they should rationally resort to buying. The thesis is that this makes a significant difference because they are new market participants at that point.

This bear market is by far the longest one so far. Not like 2011 or any others.

https://bitcointalk.org/index.php?topic=676333.0

Nice analysis, we may get a double bottom, especially after the latest US marshal auction announcement. However, there are much larger forces operating off the exchanges now than before, which will likely reduce the similarities. 

I feel this is a great match frankly.... but while we are months longer than the 2011 bubble already, we are really only about 2/3 through the cycle.

from your chart we go down to $125 in the next three months. Then trickle back up to $300 before moving on from this malaise.

I think we are 9 months from true uptick. October 2015 we break $500 again, Dec 2015 we break $1000.

Really interesting. Thanks!

I'm thinking roughly the same. May 2015 we break $500, we break $1000 in Sept and we rally to a new ATH around Jan 2016

In 2011 the market was indeed much smaller. This leads to much more volatility and faster progression through cycles. Also when you consider that with the reluctance to sell (likely due to dreams of bubble after bubble on the road to riches) this makes for a much slower progression this time around.
In 2011 it was also much more risky because the future of Bitcoin was uncertain (still is, but not like it was back then), and people were a lot more willing to offload on a whim. Also there were a lot more highly emotional/panicky traders (nearly all of them). This adds to the volatility and the speed in which corrections complete.

Aside from that, the two corrections are following a very similar path and the 4th wave of a cycle tends to be twice as long (or longer) as the 2nd wave. The bear market that led from $31.9099 to $1.994 was the wave-2 of the same degree as this correction where this correction is likely wave-4.

The only other option is that this correction is one degree larger than the one from 2011, in which case it will be even longer than the scenario I laid out above, but is in agreement with EM's reply about cost of mining/possible bottom price and it also explains why they are so similar. After all, the guide line of variation says that if 2 is steep, 4 will be sideways. But if this correction follows a similar path then it may not be of the same degree. This would agree with lucs' "historical 2" statement.

While BTC proves that it can survive the auction; at the same time, whale that wants to get in will try their luck with the auction.  This will probably depress the prices for the next 2 weeks as fund are drying.

That would represent a roughly 75% drop from current prices and roughly a 90% drop from the 2013 peak prices. Although it would certainly not be "fun" for most bitcoin hodlers it would not be unheard of for the price to fall that much temporarily

thign is there was 1k then and now due to all merchants or top is 500 ;)

In this scenario, the rise to $1200 was wave 5 of III, correct? (I don't know the exact nomenclature; I'm using the rise to $32 as "I" here.)  Some E-wavers are expecting another rise above $1200 to be 5, which doesn't make any sense because this current phase is so long, it should correlate to "II", the previous bear market, with the current wave being IV.

It's a Gox chart, but I think I have it set up so everyone can tell where I'm going with this
Red count is a completed cycle and can end anywhere above $0.05 (deal with it :P )
Green is where we are still in (4) of III.
https://i.imgur.com/qaoNdiV.png

In my quoted post, I misspoke on the count I was referring to. This isn't IV to 2011's II. It's either [II] where 2011 peak was I of [ I ], OR we are in (4) of III of [ I ]. In both cases, the time spent in this correction is consistent for the wave that it is. This (4) is a little over 2x the (2) in time. Typical for a wave-4. If it's the [II], then there is no precedent to even compare it to since it's of a larger degree than Bitcoin has seen in it's short history, and can be expected to last anywhere from 38.2%-100%+ of the time it took to complete the entire rise to the $1163 top.

It's not a bear market at all. It's a larger Rule of Thirds megacycle between 300 and 600 and a Rule of Thirds cycle between 330 and 360. Given that volatility is growing at the low end puts pressure upwards to break into the next 430-460 cycle after going through some superstitious points in CNY currency with triple matching digits.

Great, thank you.  I'd been asking around for a long term count, and this helps a lot.

1) In the [II] situation, the bear market could go on a long time, and we could drop pretty far yet.  But the upshot is that we still have the powerful [III] yet to come.

2) In the (4) of III of [1] situation, we should be near the end of (4) given what you said.  Since (5) are typically small, we might have a IV that's similarly long (a year, since II was 6 months), and that would result in two years of essentially sideways action before V starts.

You are correct!
A 2nd wave can retrace up to 100% of the wave-1, so yes it technically could go on for quite some time yet. But I highly doubt we would see double digits. The (5) of III can be larger than you think. Remember when I was showing you that the large time frame 5ths are often larger than the wave-3's of the same degree, so we could be talking of a few $1000's for the top. Then, since wave-4's usually fall to the 4 of one lesser degree, we would end up back in this area again once the III is complete. Maybe not this low, but below $1163.

For the record, I have indicators that say this is not the [II], so I'm of the belief that this is indeed (4) of III.

Yes, I remember.  Wave 3 in this case went from $5 to $1163.  In % terms, that's huge.  Though in absolute terms, not so much.

Brilliant!

Note that the first is a question, and the second is a statement.  In between was a clarification.

Nothing personal, it's just that they seem like very different patterns and would be difficult to confuse. I am more confused than ever how this system makes any sense.

Great thread OP. Also, started one of the best discussion in ages in here :)

Just to summarize what I believe is a widely held sentiment: yes, there is a striking similarity, but with the crucial difference that 2011 was a correction in price, while 2014 seems to be a correction in time.

Both have the same effect in the end, that "expected price" (like the well known loglinear extrapolations) and actual price are wide apart, just the way it gets to this point is slightly different.

maybe we should have a contest on:
1. whether this is a terminal decline and price never recovers
2. If the price recovers what would be the bottom in price and time

personally, I am with scenario #2, but looking at Japan stock market makes me shudder: they had a 40 year unstoppable bull market, peaked at 39K, then 25 year bear market, which is still technically ongoing even with the recovery from 7K to 17K in the last 5-6 years.

I am following many threads, but had yet to seen a prediction of a low that looks valid. In fact, $280 prediction in the first post could easily be $140 if you compare with 2011 scenario.

Google: Bitcoin is dead
returns About 853,000 results (0.63 seconds)

I'm not completely convinced myself that we saw the final bottom of this bear market, but I'm also not quite as sure as some other posters that we're pretty much certain to make another lower low. I personally find retest of, say, 320, then continued crawl up, quite plausible as well.

To latch onto OP's comparison to the 2011 correction, I'm personally starting to wonder if we're in a similar state as in March 2012: final bottom was in (2$), the first serious bull run (to 7$) was utterly destroyed by dumps, and there was still a long way ahead before even that 7$ local peak was reached again. Yet, no more lower low came in, and in the end that was good enough.

Like this, you are searching for the separate words.

Use " ... " instead, which leads to the below conclusion that the dollar is more dead ::)

"Bitcoin is dead" -> 507 results
"Dollar is dead" -> 1960 results

I really don't know what the final bottom is going to look like, but I'm fairly certain that we will find one and will then continue going up big time! Things do look a lot like 2011/2012, in fact. I believe shorting now may give you some minor gains, but could potentially be dangerous, as well!

I think we will touch this trend line, not with a large drop but just dragging out the current 300-400 range. We may dip below $300 again but I think sub $200 is completely unlikely unless a major bitcoin failure event happens.

In two years Bitcoin will be worth $1000 again unless it is destroyed by hackers and competition(which includes govt).

I am holding Bitcoin and the only thing I am watching for is an Alt coin that will be there to take over if/when Bitcoin hits some unforeseen disasters.

a battle between the 2013 and 2012 trend lines... will the 2013 hold? will the 2012 hold? are we doomed?  ;D

https://www.tradingview.com/x/TSDLwMNF/