Bitcoin Forum

You'll largely determine your ability to succeed at trading by properly evaluating market sentiment, turning off your computer and going outside. Put in your bids x% below market and walk away.

Yes, we have seen this diagram. Several times.

Btw, my personal feeling is that we are somewhere between panic and capitulation right now. We'll get a little more downside, and then there is only way - up :).

FTFY.

Also, you're welcome!

xD

The euphoria phase is also a great financial opportunity if you can go short.

Oh, desperation and optimism are good points if you can trade volatility.

Others positions are good if you trade trends with leverage...

Mr Obvious is back!

Post that chart again everybody!  I missed it

It's a viscous cycle. >:(

So if I'm thrilled right now does that make me bipolar or something  ???
I'll go ask Atlas.

Which everyone should have realized when the Mr. Bitcoin episode ran. Buy on hype, sell on news.

Capitulation incoming?

No, this is still denial that bitcoins are crashing.

yeah, this is true

 ;D

This concept has made me the most money so far.
Just by watching the emotions of people on this forum and investing accordingly.
Better than technical analysis.

That you very much.
 ;D

My emotion is one of regret.  Regret that I didn't double my money on the way to $7 and just sell up and stay out, waiting for a better price to buy back in.  Fortunately however bitcoin is almost back to the price where I reentered the market.  More money available now (courtesy of people who thought $7 was a screaming buy) so maybe I'll dabble in the market when it touches $3.40.

These forums are a great sentiment indicator: when people are shouting 'zomg, here comes $X (where X is current price plus $2)' it's a time to sell.  It's almost like the market knows how to punish hubris and avarice.  When everyone seems to be throwing in the towel and saying how lame bitcoin is, it's time to buy. 

I have to say that this recent cycle has taught me a lot of things about trading. It seems that for the short term and mid term fundamental real world events have actually very little effect, they simply either strengthen or weaken the current momentum. We had a downward momentum and then some bad news came, which accelerated that momentum and here we are.

This cycle and the emotions people go through is so spot on that I'm pissed that I didn't see this as clearly before. I still believe fundamentals have a say in the long term picture though and that is why I'm not worried, for example the usage of the Bitcoin network has been on a strong uptrend ever since the Good Wife episode. We have already recovered to the levels of August/September in transaction counts.

Another point is that the bad news we've recently experienced are best categorized as "reverse hype", meaning that there is really nothing to them. Paxum was not crucial to Bitcoin, nor was Tradehill. No one lost their money either. Nothing significant has happened lately on the negative side of things. Excluding the pain caused by the price crash itself, I'd say there is actually more reason to be happy about the state of Bitcoin than to be unhappy about it.

Finally, I would say that we are currently somewhere between capitulation and depression. The only thing I'm pissed about is that I missed the profit opportunities of this cycle. It was an important learning process though, in the future I will not talk about fundamentals when it's a question of predicting short or mid term market behaviour. They have very little say in it.

NO AVATAR you have?! .O

bad sign

This chart is meaningless if the underlying asset that you're speculating on is an inherently poor investment vehicle, cough bitcoin cough...

?

The chart does not describe the asset.  The chart describes the group of people.

The more you find ways to contribute to the project the more you find it a meaningfull asset.

Good thing it's an awesome transaction medium!

I have told you before, your "fundamentals" are completely meaningless. Your transaction numbers can be easily manipulated and provide nothing of value. They are not a leading indicator for price.

Price is the leading indicator for fundamentals, you have seen it now and you will see it everytime again. The bad news come out AFTER, and perhaps in some cases BECAUSE the price drops.

+1, I couldn't agree more

If the bad news is ABOUT the price drop: YES
Otherwise: NO

Any guesses as to where we are on the EmotionCoaster?

Capitulation / Despodency, I guess.

My guess is depression.

I'm at the "I'm brilliant" stage. But I just started trading (again) yesterday so I suppose I haven't synched with the board feelings yet.

Looks kind of like desperation

I thought about this. What if this is just one final rally attempt before a long crash down?

http://dl.dropbox.com/u/1127246/Screenshots/qolk.png

 ???

I think desperation happened on Jan 18th followed quickly by some panic 19th and 20th.  Capitulation was Feb 14th-ish and those rally threads are now a little bit of hope.  8)


EDIT: Still think this looks like desperation?

I think we are very clearly at "hope" right now. The market is correcting from the clear overshoot it did going down. We've also had some good news for a change, nothing explosive but Keiser starting to boost Bitcoin more (via piratemyfilm etc), Bitcoinica going to the Chinese market big time and a confirmation that a Reuters journalist is writing a Bitcoin article, is not too bad. Combined with the recent rally I'd say we're clearly at the hope phase.

Denial....

Denial doesn't make prices rise from a ~3.80 low to over 5. Denial is people screaming it's just a correction, and that it will go up soon, while the price plummets further and further.

Yeah denial was the fall from $7-$6

That is rather obvious. I was thinking that maybe he meant denial as in denial of price going up. I don't see how he can be serious otherwise. Denial goes both ways guys. You simply turn the picture from BTC/USD to USD/BTC and you have the exact same cycle but the other way around. ;D

So in that sense it is correct to say that we are in the denial phase if you look at it from the perspective of USD instead of BTC. It's the equivalent of hope.

Im not sure that thought had dawned on me...  ???  :P

It looks like hope to me now.

I'm starting to feel desperation now. Where is the volatility? Where is the liquidity?

Where is the liquidity?  You're joking right?  I assume you just sold.

Oops, meant to say volume.

I sure am relieved that we got out of the $4's.  Gosh you could say Im optimistic  8)

I'm long. I think I'm relieved, but maybe I'm really in denial. Either way, I guess we're going somewhere... or maybe that's hope.  ???

Can you feel it?

Haha specially cause adam and proudhon are bulls again

The problem is that despite having a rational understand of this, emotion still takes over - I sold all my bitcoins at $4.20 - I got up at 4 in the morning to do it because I couldn't sleep worrying about it.
Even though it was irrational and I should have been buying, the security of having my $,  would allow me to buy again when I felt confident again (I bought back at about $4.90) - I simply couldn't risk a further drop.
It very easy to look at a graph in a bull market - it's quite different when you are trying to stay in control of your money.

I think we are in the optimism phase....but then again we are moving slowly higher so it might be the Hope phase etc.

No way.....we are at "Thrill" 

Just listen to the people around here. 

I agree, I think we are at borderline excitement/Thrill.

This is my main strategy. Those who can control their emotions can exploit the emotional buying most people participate in. A good example recently was facebook's IPO. The prices people were paying were outrageous for a company with such limited growth potential.
I also see this all the time among entrepreneurs who start businesses. They pick something they want to do without doing any market research to see if it is feasible. Then they sink all their capitol into "Greg's pony petting service", and are shocked when no one responds.
When investing I try to only use the calculator function in my brain.

I think we're either at optimism or excitement.

I think there is still too much caution around for it to be thrill or higher.

I feel it now.

I feel it now.
[/quote]

What do you feel my friend?

I think we are at FEAR!  :P

short term: agreed

Medium: optimism

Long term: Hope

Wake me when we get to despondency.

Denial.  Over a month ago we went from above $15 to under $8 in just one day.  Now the forums are happy go lucky again because we moved up to $12...  get ready for Fear.