Bitcoin Forum

I know many expect a break out (to 9 or to 4) just around the corner - but in the past after monthly scale rallies there were also monthly scale corrections and I would not expect one of them instead of a quick down or up spike.  For example see the first monthly scale wave in October-November 2010:
http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=&i=Daily&c=1&s=2010-09-01&e=2011-04-01&Prev=&Next=&t=S&b=&a1=WMA&m1=10&a2=&m2=30&x=0&i1=&i2=&i3=&i4=&v=0&cv=0&ps=0&l=1&p=0&
After the about month long rally there was about month long correction.  If someone subscribes to the Elliot Waves theory - this was the first sub wave of the first main (yearly) wave - we are now in the first subwave of the second main wave so this one can be quite similar.  But even if we look at the other monthly scale waves - they too had corrections that took about the same amount of time.

it's funny, that graph looks peculiarly like the chicken entrails i was looking at yesterday...

This was when Gox opened and a few geeks threw coins around. The average WEEKLY volume was something like 40k USD. This is looking at noise. Even if I were to believe in whatever wave theory, which I don't, I would not use this data as a reference.

Personally, my current best guess would be a change of attitude and a few hurt speculators some time soon, resulting in maybe one or two months of correction. But this is not something I can bet on, we might as well see a huge chaos unleashed due to the excessive margin trading. I wasn't expecting this, so I'm nut sure I got all the scenarios right on this one.

I can just say that this time, enough factors to allow a sudden hard crash have accumulated, so I strongly recommend to not go all-in! Especially not on margin! Better safe than sorry when one isn't sure what's going on. This goes both ways, look at how quickly the order book changes these days.

Agreed.

It's a hard lesson to learn. :(

What? Are you kidding me? Bitcoinica is on maximum leveraged long positions now, with bids for only roughly 50k BTC in the vicinity?

I take that as an attempt to make me hit the "sell all remaining" button. This can't be right, or they somehow adjust maximum leverage to the order book -- which is a wild wager in itself due to manipulation possibilities.

so what are you implying? 

Temthaw: well, it would be unacceptable to not allow liquidating shorts, that does not necessarily mean anything. And even if they're below maximum now, that can still be way too much.


That margin traders might have to execute liquidation sells the size of the order book bids down to below 6. Double that up over stop losses or panicking people, and you might get a flash crash.

I think we're above 10% probability for a sudden strike below 4 or something on that level of insanity. Such a configuration should normally never happen. Or I'm just not understanding something here.

Lol,

Yes, because the market ALWAYS crashes when bitcoin is exposed to millions of people..  ::)

It crashed hard in june 2011, really hard..

Well, yes, yes it did.

Proudhon and his NEW maths...

I'm serious.  Didn't the market crash in June?  Am I missing something?

I will agree that Bitcoinica is hurting the community as a whole, yes..

But if you cant gather how Bitcoin entering the psyche of the people will help, I have little to say to you.

I know its hard, but try the real world math..  Take the first day of june btc to usd price...  then look at the last day of june btc price..
Where is the crash ? are you refering to the correction from the peek ? 

Proudhon is back! and SHORT!

I see your point.  I guess I'm referring to the correction from the peak.

Yes, Im quiet as a mouse in church!  ???

i disagree strongly, i came to conclusion that bitcoinica provides fair balance and stability which is more important to healthy growth then wild roller-coasters, it also offers opportunity for new comers to enter at decent rates.   and it's not bitcoinica as much as the players on that boat.  thing is there is no yet much of new funds
the slower you go - further you get

When bitcoinica is about 75 percent of mtgox volume and its mostly on margin, for such a small market, and routinely runs out of head room in whatever direction the market is going, explain to us all in detail how you think it helps..

Dont get me wrong, I love the "idea" of Bitcoinica, and I have immense respect for Zhou, hes a hard worker, and a professional.

Personally I would not have an issue with bitcoinica if it was its OWN exchange.. not parle to mtgox.

currently it helps to keep the rate at sane levels and more importantly STABLE rates

if you all leverage in one direction and there are 75% of you of all mtgox volume of course things will slowdown
i don't know much about trading so i'm not playing that game and by looking how you guys play that game someone moving in opissite direction can take all your leverages or profits to themselves
how is it bitcoinica's fault that most traders bet in one direction?  you play high risk game you should assume high risk of losing just the same as you multiply your gains

Correction of 1/3 of the value - in current scale that would be correction to 5.

Ok, your not far off from my train of thought..

But consider this..

It delays the inevitable, and causes wild swings when the dam finally breaks, thus liquidating positions for these momentary wild swings..

It dosent so much stem the tide, but band-aids it up with a very very thin wall temporarily Then! you have no btc or USD availbility in the appropriate direction.

Now if he had the over head, the market will move where it wants to go. Good or bad..

Its like market procrastination so to speak.

And on top of that the mtgox traders moving to bitcoinica makes this worse..

The best thing Zhou can do is be his own exchange with leveraging, to compete with Mtgox, once they have it too, THIS will be helpful in the ways you are talking..  2 exchanges with margins.

The problem isn't the idea of leverage. The problem is that it is used excessively in the most unfitting situations. This will go wrong eventually, and that will help repair the problem by punishing overconfident trading, weakening those who do it and strengthening conservative speculators.

Yes, that coupled with it all being on mtgox, this is the problem.  It dosent buffer the market at all in my eyes, until there is compitition with mtgox on a scale(volume) that is near mtgox..

i may not know much about trading, i may not be well versed with trading lingvo
but looking at the following graph i'm seeing a very healthy growth.  with bitcoinica or without there is no more btc and usd than there currently exist and inevitable can't be stopped either way :) so i see the delays as a good amortization mechanism so we won't spiral out of control

http://bitcoincharts.com/charts/chart.png?m=mtgoxUSD&v=1&t=S&noheader=1&height=80&width=750&r=60

Yes, Im very shallow in my thoughts, dont mind me, I have little to no thought at all.. :)

Temthaw, how about you follow all my posts and grade them, then I will feel the nostalgia of 15 years ago when I was in university, and I will strive to keep you happy.

Im much more of a "lead a horse to water" type then spelling it out and drowning the horse.

People need to reach their own conclusions...  :)  





Grade - (        )

Congrads! You've discovered we BOTH have opinions, you'll fit right in here.

And Im sure you have enough water, never thought otherwise..

Welcome aboard.. :)




Grade - (    )

Bitcoinica was usually ~10% of MtGox volume until Jan 14th, the day Zhou offered a no-fee day.  This was like a banker yelling, "Free money, one day only, come and get it!".  The expected happened: he ran out of reserves.  I hope he learned his lesson.

As others have pointed out, the problem isn't leveraging, it's excessive leveraging.  And by offering 5:1 and 10:1 leveraging, Zhou does a disservice to his community.

Im not saying leveraging is the problem, Im saying that ALL the leveraging is done on bitcoinica, which is essentially, when it gets down to it, goes onto mtgox, when bitcoinica gets to a point that it needs to change its position, this causes the wild spikes, which is made worse by the excessive leveraging like you said..  No offense to Zhou, but you guys realize hes making the most when these momentary spikes causes liquidation. (Zhoutounged)

Mtgox price being the defacto standard in the community is the problem, and bitcoinica is just adding to the volatility of mtgox. We need another exchange with high volume, bitcoinica has the potential to do this, I hope they do this someday soon.

Then and only then will we have the starting of a buffer for the market.

In other words, the excessive leveraging on bitcoinica that all transposes down  to mtgox is making things worse.

Edit - I should note also, I have never been liquidated, and actually have made 22 dollars from bitcoinica in the few times I've used it So Im not biased because I've been hit hard ..

Q: how long will this correction take?
A: i don't know for sure :D (whow does?) but i think it is likely to take another dip down to 6, before it finally will start to go up again.

Bitcoinica has added an exchange -- Gox needs to step it up and implement margin trading to balance things.

FTFY

Not the exchange type I was thinking of.  I meant the trading exchange, with depth chart, and so forth.. :)

What, that's it's going to crash?  I'd hardly call that little dip a crash.  The fact is you're being uppity and it's annoying.  If you were referring to another prediction (maybe one with some actual targets), please quote it instead of referring to "what I posted".

He's new, cut him some slack, plus he grades on a curve... :)

Looks like there is * at the buy button at bitcoinica again - so maybe this was not the bottom yet.

Ohhhhh that was sarcasm, I think we all missed that... sorry brother..  My bad...

now that exactly what I have been talking about happened...


Any questions as to why bitcoinica is not doing us any good ?

it's very good =) keep using it ))

Why do you think that swing was bad? People who had buy orders at 4.6 disagree :)

Hey rape away, I just want to see some stability.

Stability comes with more educated speculators / more money in the system. I guess today was a good lesson.

I think it suffices to transfer the money to the more sane speculators.

The bottom peak order that got the last Bitcoinica liquidations was mine. Om nom nom. I'm selling the coins again right now lol. Already got over 2k through, instant profit is instant.

And it was just so predictable. I was laying out the pieces in the forum, am I supposed to tell people where to place orders for free money now? Pff.

After I saw the depth shift dramatically yesterday, I got out fast...

bitcoinica was a ticking time bomb...

Yes, the depth rearrangement was a clear signal to me.

OK - I think now is a good time to revive my question.  So far it does look like a prolonged correction.

People getting anxious with no movement, that's all

It’s possible that the move to 7.2 was just a bear market retracement. If that’s the case, we should be seeing new lows as we resume the downtrend.

Saying "it's possible" is so dangerous when trying to explain something. Anything is possible, so it's like picking from a set of possibilities  to explain something..... with anything. It's possible that that bear market retracement is itself a retracement of a retracement of an upwards trend. c wut i did thar?

Ok, let me rephrase: I believe there is a good probability … I hope it won’t happen though. I really hated this bear market.

C'est la vie!

What correction?...
Oh, you mean this https://bitcointalk.org/index.php?topic=61101.0

What sort of re-arrangement did you see?

At the time a large number of bids were taken down and huge number of asks went up, effectively reversing the look of the order book.

Even so, they still create effects throughout the market and lots of money redistribution.

Holy Cow...

The depth chart on bitcoincharts froze before the big sell off.. I'm starting to suspect them of manipulating the charts.

That was coincidentally very inconvenient, yes.

It's been frozen for several days now.

3 weeks of correction - are we midway?

Probably.

This chart seems to have worked for me right along through the price decline, the values it has shown seem consistent with the activity.

Is there a better chart I'm missing?

http://bitcoincharts.com/markets/mtgoxUSD_depth.html

Now I am suspicious that there is someone intentionally burning lots of money *just* to make Bitcoin look bad. Screw them. Soldier on, Bitcoin Army!

Not sure how long the correction is going to take but at least a temporary bottom has been found. In fact when I look at the current situation it seems that all the movement from $6 to $5 looks like a strong bear market panic move and at least temporarily the fuel has run out. With a bear market I refer to the short term of course.

I believe $5 must break before there can be another wave of selling, otherwise this will be the bottom.