Bitcoin Forum

Economy => Economics => Topic started by: kiwiasian on June 12, 2011, 04:11:09 AM



Title: Why the rapid decline in price?
Post by: kiwiasian on June 12, 2011, 04:11:09 AM
Everyone is saying "oh, it's alright, it's just because the $30 was unsustainable and the market is just stabilizing itself"

...Alright.

Seriously, it's dropped from $32 to $10. Wtf.

What's going on? I'm seriously getting concerned now. I've lost over $100.


Title: Re: Why the rapid decline in price?
Post by: demonofelru on June 12, 2011, 04:14:25 AM
IMO all these "why did the price go up xx%" or "why did the price go down xx%" can all be answered with the same one word "Speculation"


Title: Re: Why the rapid decline in price?
Post by: kiwiasian on June 12, 2011, 04:18:43 AM
IMO all these "why did the price go up xx%" or "why did the price go down xx%" can all be answered with the same one word "Speculation"

That doesn't explain anything.


Title: Re: Why the rapid decline in price?
Post by: Babylon on June 12, 2011, 04:33:21 AM
For people getting into bitcoin this is a good thing.

This gives you a chance to buy more bitcoin at a lower price.

If you were looking for quick profits then not so good, but this is a very risky investment with big potential profits, that risk includes rapid drops.


Title: Re: Why the rapid decline in price?
Post by: Reikoku on June 12, 2011, 04:47:41 AM
You must have understood that you stood to lose money on your investment.

I've just bought mining rigs which were designed to make 40 bucks a day and they're now making 13, that's how investments pan out sometimes.

Hopefully it'll go back up and its just because people were selling too much.


Title: Re: Why the rapid decline in price?
Post by: Jack of Diamonds on June 12, 2011, 10:17:47 AM
Because a bunch of down's syndrome panickers in their moms basement kept pushing the price lower and lower because they had a compulsion to get rid of all their BTC.

That, and it's weekend so Dwolla and wire transfers are tacky at best. On Monday-Friday there is slightly less variance of this kind IMO.

If you want to profit from these swings, buy when price goes extremely low. I did so yesterday at $13, and again today at $11.9 (didn't expect it to go as low as 10.25 though).
Then either keep it all & withdraw to your BTC wallet, or sell at the current high.


Title: Re: Why the rapid decline in price?
Post by: Cluster2k on June 12, 2011, 11:51:47 AM
If we all can see the price falls on weekends and rises on weekdays, why aren't we all making money by riding the trend?  I don't really know what makes weekends so special.  Is it because people are away from their computers and not monitoring the market?  Mobile phones and wireless internet make it easy. 

The next difficulty increase is going to be enormous.  Maybe people getting back into the market are paying attention to that and the easy money it should yield.  Big emphasis on "should".


Title: Re: Why the rapid decline in price?
Post by: Man From The Future on June 12, 2011, 12:13:57 PM
People can't get funds in on weekends. Simple as that, is it not?

(In reply to post above, not saying a loss of 2/3s value is normal for a weekend :P)

Also, yey, $17 :)


Title: Re: Why the rapid decline in price?
Post by: claw on June 12, 2011, 12:15:42 PM
If we all can see the price falls on weekends and rises on weekdays, why aren't we all making money by riding the trend?
Indeed.  Why aren't you?

Prices fluctuate.  This isn't a problem.  The problem is that you see it happening and your mind tricks you into believing that it's going to keep happening.  You have to override that with reason and the best knowledge you can get.  It's at 17 right now.  Every BTC you bought at 11 has nearly doubled.  That's freaking awesome!  Unless you were tricked into thinking it was going to sink without end and didn't buy.


Title: Re: Why the rapid decline in price?
Post by: stick_theman on June 12, 2011, 02:58:48 PM
If it comes up so quickly, it would have to come down/correct.  That's the law of Gravity, my friend.


Title: Re: Why the rapid decline in price?
Post by: Jack of Diamonds on June 12, 2011, 03:09:59 PM
If it comes up so quickly, it would have to come down/correct.  That's the law of Gravity, my friend.

No, gravity is a physical theory. Physical theories have nothing to do with economical theory.

Take Berkshire's stock for example. It has been steadily climbing from ~$200 to $150,000 over the past 20 years while other companies have gone up and down.


Title: Re: Why the rapid decline in price?
Post by: stick_theman on June 12, 2011, 03:18:51 PM
If it comes up so quickly, it would have to come down/correct.  That's the law of Gravity, my friend.

No, gravity is a physical theory. Physical theories have nothing to do with economical theory.

Take Berkshire's stock for example. It has been steadily climbing from ~$200 to $150,000 over the past 20 years while other companies have gone up and down.

My man, these ticker prices are driven by human emotions.  If you have violent uptrend, you will get violent correction.  There's no two ways about it.

As for Berkshire's example, it does look like it's a huge gain, but if you look at it, it's over 20 years, long term.  BTC's had a good run for the past couple days/weeks!  That's just unsustainable.

I'm glad it came down again, taking a breath around this support level. 


Title: Re: Why the rapid decline in price?
Post by: xlcus on June 12, 2011, 04:02:40 PM
It's at 17 right now.  Every BTC you bought at 11 has nearly doubled
Nearly doubled? 11 to 17 = 54.5% increase


Title: Re: Why the rapid decline in price?
Post by: Jack of Diamonds on June 12, 2011, 04:07:42 PM
As for Berkshire's example, it does look like it's a huge gain, but if you look at it, it's over 20 years, long term.  BTC's had a good run for the past couple days/weeks!  That's just unsustainable.

I'm glad it came down again, taking a breath around this support level. 

Not implying BTC has a long enough history to be compared to BH.  I'm saying sharp spikes up or down are not a 'law of nature'. They only happen as a result of market conditions.
A ball that you throw in the air has no recourse but to fall back down.

Hell, I hope the price goes down every weekend as it has done in the past 3 weeks. It's the easiest few grand you'll make in a while.

I'm saying it's not set in stone and thus I'm not counting on it to make constant profits; Hence ultimately relying on mining.


Title: Re: Why the rapid decline in price?
Post by: FlyingFlapjack on June 12, 2011, 05:38:16 PM
People can't get funds in on weekends. Simple as that, is it not?

Not entirely. After all, why didn't the market crash every weekend if it was only because it was the weekend?

There was also the attention from the US Senators over online drug exchanges, and that one of them closed to new members temporarily and was offline a bit this weekend.

MTGOX also had recent issues with dwolla.

So...those recent issues...the weekend issue you've noted...the psychological hurdle that $30 turned out to be this time around...and maybe a few others?

...

Still...MTGOX should have 'circuit breakers'(I'd guess virtual ones) like the NYSE to shut down trading when there are huge drops.

They might also consider freezing currency fluctuation over the weekends and enforce a 'retail' price for any transactions that would take place.


Title: Re: Why the rapid decline in price?
Post by: kiba on June 12, 2011, 06:14:29 PM
I don't get the idea of circuit breaker. Other markets would just open up and benefit from the period of circuit breaking.


Title: Re: Why the rapid decline in price?
Post by: mmortal03 on June 13, 2011, 12:25:15 AM
For people getting into bitcoin this is a good thing.

This gives you a chance to buy more bitcoin at a lower price.

If you were looking for quick profits then not so good, but this is a very risky investment with big potential profits, that risk includes rapid drops.

I would have bought some somewhere around 10 if my transfer from Dwolla into Mt. Gox wasn't sitting in limbo since Wednesday night.  >:(


Title: Re: Why the rapid decline in price?
Post by: Valalvax on June 13, 2011, 12:48:11 AM
Price was 8.60

Price went to 30

Price went to 10

OMFG THE MARKET CRASHED OMG!!! (sure price stopped at other prices between)


Title: Re: Why the rapid decline in price?
Post by: AyeYo on June 13, 2011, 01:09:53 AM
I don't get the idea of circuit breaker. Other markets would just open up and benefit from the period of circuit breaking.

Circuit breakers only work if the exchange is centralized and/or all exchanges agree to impliment them.

They're a joke anyway.  As I said in another thread, if people are going to be concerned with parabolic moves down, then they need to be concerned with parabolic moves up as well.  Where are the circuit breakers in the upward direction?



What Bitcoin trading needs more than anything else is the ability to short sell.  That would balance markets out a little.


Title: Re: Why the rapid decline in price?
Post by: tomcollins on June 13, 2011, 01:43:18 AM
Everyone is saying "oh, it's alright, it's just because the $30 was unsustainable and the market is just stabilizing itself"

...Alright.

Seriously, it's dropped from $32 to $10. Wtf.

What's going on? I'm seriously getting concerned now. I've lost over $100.

100 whole dollars?  Shiiiiit!  Start looking for bridges to jump off of.

The market dropped to $10 because no one wanted to buy something that was falling.  Lots of sellers, few buyers = prices going down.


Title: Re: Why the rapid decline in price?
Post by: claw on June 13, 2011, 01:54:04 AM
It's at 17 right now.  Every BTC you bought at 11 has nearly doubled
Nearly doubled? 11 to 17 = 54.5% increase
Yeah, fair enough.  OTOH, it did end up doubling.  And 54% is a nice gain for nine hours or whatever.  I've been giddy all day.  :)


Title: Re: Why the rapid decline in price?
Post by: Fakeman on June 13, 2011, 03:45:27 PM
Seriously, it's dropped from $32 to $10. Wtf.

What's going on? I'm seriously getting concerned now. I've lost over $100.
What, so you bought ~5 BTC at $32 and sold them at $10? Maybe this just isn't your thing, nothing wrong with that.


Title: Re: Why the rapid decline in price?
Post by: kiwiasian on June 14, 2011, 03:01:14 AM
Seriously, it's dropped from $32 to $10. Wtf.

What's going on? I'm seriously getting concerned now. I've lost over $100.
What, so you bought ~5 BTC at $32 and sold them at $10? Maybe this just isn't your thing, nothing wrong with that.

It's called mining, hurp durp.

I mined 10 BTC, which would have been worth $300 but it was then worth $100. So that's actually a $200 loss for me.


Title: Re: Why the rapid decline in price?
Post by: bcpokey on June 14, 2011, 03:16:35 AM
Seriously, it's dropped from $32 to $10. Wtf.

What's going on? I'm seriously getting concerned now. I've lost over $100.
What, so you bought ~5 BTC at $32 and sold them at $10? Maybe this just isn't your thing, nothing wrong with that.

It's called mining, hurp durp.

I mined 10 BTC, which would have been worth $300 but it was then worth $100. So that's actually a $200 loss for me.

Uhm, no you didn't lose jack except for potential USD. So yeah, if I had had money in mtgox and managed to buy when the price dipped to $10 and then sold again when the price was at $24 I would have made $14xhowever much I potentially would have had in the market, so I lost 14 x ?? amount of dollars, that sucks!

On the other side of things, you GAINED $100 for the cost of perhaps $10, so your actual loss was negative $90. Probably even bigger now that its back to $20.


Title: Re: Why the rapid decline in price?
Post by: Bit_Happy on June 14, 2011, 04:23:47 AM
Everyone is saying "oh, it's alright, it's just because the $30 was unsustainable and the market is just stabilizing itself"

...Alright.

Seriously, it's dropped from $32 to $10. Wtf.

What's going on? I'm seriously getting concerned now. I've lost over $100.

100 whole dollars?  Shiiiiit!  Start looking for bridges to jump off of.

The market dropped to $10 because no one wanted to buy something that was falling.  Lots of sellers, few buyers = prices going down.

I was surprised we got to $10.25. the rebound was pretty strong.
The charts are looking sick now, IMO sell now before the panic starts.


Title: Re: Why the rapid decline in price?
Post by: stic.man on June 14, 2011, 05:16:36 AM
what about the charts have you worried?


Title: Re: Why the rapid decline in price?
Post by: Alik on June 14, 2011, 09:00:03 AM
Seems too many of you playing this out emotionally. You have to put your emotions aside to be successfully making money especially a youngster like bitcoin. Successful traders on ForEx know they can't trade based on emotion.

All of this "omg i lost money! i baught at 8usd, went up to 30usd and now it's 10usd!" is nonsense. It's very natural and i'm glad to see bitcoin following the organic laws.

The 2, or 5 day average values are higher then ever. Keep mining and keep searching for ways to make your bitcoins useful in every day trading of goods and services.


Title: Re: Why the rapid decline in price?
Post by: Cluster2k on June 14, 2011, 09:26:32 AM
The 2, or 5 day average values are higher then ever. Keep mining and keep searching for ways to make your bitcoins useful in every day trading of goods and services.

That's a very good point: search for ways to make BTC useful (ie. trade for good and services).  So far we have seen one place where it really makes sense to use BTC, and where traditional credit card based facilities fail: Silk Road.  Without BTCs being useful for real good and services there is very little to support the current BTC/USD exchange rate.  The rarity of BTCs doesn't matter to anyone who does not need them.