the problem is that there is little difference, but this time around, we see the effect bolded above. during the first bubble, the prices were not sustainable because the irrational bulls converted all of their fiat to btc and there reached a point where the influx suddenly stopped. this caused a panic and a huge correction, which left many, many bag-holders in its wake.

this time around, the influx of new buyers isn't slowing. people with little to no exposure of bitcoin are rushing to buy simply because the price has been going up, up, up. it's the same psychology, except the scale is much larger and the price is much higher for many more coins. smart money pulls its asks because it sees that the fundamentals are different this time around, and there won't be a huge crash. selloffs are immediately absorbed by new buyers who don't understand the risk of purchasing an asset whose price has made 500% gains in the last year.

this is going to lead perhaps not to a bubble as it did before, but a massive deflationary event that pushes the purchasing power of bitcoin far above its track for healthy growth (see the height above the SMAs that the price is at right now) and will inevitably lead to massive profit-taking, predatory speculation, and price volatility. many new investors who thought they were going to be rich will find themselves in the same position as those who bought coins at $30. the growth of the userbase is good and should be encouraged not by predatory speculative behavior where earlier adopters laugh as the new users line their pockets, but lower-risk lower-price-point profit-taking that won't introduce massive volatility into the market. the former will help the bitcoin community grow in the long run. the latter will hurt the adoption of btc in the short run.

in other words, it's short-sighted and introduces systemic risk into the community. this is an example of a nash equilibrium that leaves players worse off than if they played in a pre-coordinated manner, like the Prisoner's Dilemma. everyone would be better off if the price of the coins were growing but with less risk of suddenly crashing. at this point purchasing coins is again a very high-risk investment because users have decided to distribute risk amongst the entire userbase while they continue to play musical chairs.


don't let them fool you. traders will point to good news during rallies and bad news during sell-offs but the cause and effect is less clear. i say it's very straightforward, positive-feedback loop deflation.


thanks for the bump. the responses in this thread made me more worried than when i first made the post because of the unchecked bullish sentiment.

not obsessed. candlestick patterns aren't very rigorous anyway, regardless of the possibilities of manipulation. but as you can see earlier in the year red candles pattern in a fairly consistent way. if a drop isn't timed properly to produce a red candle, it usually means the price didn't stay low enough long enough to be considered an actual correction. and we seem way overdue for one. that is all i meant to suggest.

sarcasm?


6-hr shows even momentum, still contradicting the rising price. and daily chart averages over the v-reversal price action completely. this is the second time you've accused me of cherry picking, and if you're going to trash my analysis so easily i'd appreciate it if you posted a chart yourself showing contradictory data or put any effort into the dialogue at all.

you're not even right. every chart, regardless of scale, shows the same exact data. i picked the largest interval i could without completely losing granularity. the only reason the daily chart doesn't match with my analysis is because it averages across the entire high volatility section of the price action, which is what im trying to comment on.

bearish divergence [in the Rate of Change] shows how the knife affected the price momentum, even though we reached new highs.

i see this. the mass index sometimes gives false reversal signals. it has to be confirmed by actual price data. the crossover on the 9th was invalidated by a later breakout. it is just a volatility-triggered warning.

also, will you post these charts? i am interested in counterdata.

we haven't seen a red candle in almost two months. so... how about now?

that knife was everyone who expected a serious correction. turns out a lot of people did. i imagine the buyers who brought us back up to trend so quickly don't even understand why we might need such a thing and expect continued exponential growth forever (totally sustainable right? just find ten more people, and you get 10% of their earnings, and each of those people find ten people, etc...)

we are easily in bubble territory, and the knife was an exit sign. bulls, you may be right, but tread with caution. we haven't had a red candle on the weekly scale in almost two months.

markets are also anti-inductive. if everyone expects one behavior, it will do the opposite so as to minimize profits.

you guys are so silly. just as bad as the first irrational bulls on the way up the 2011 bubble. do you think you all are going to be rich? do you really think that an exponentially increasing number of people will pour money into your pockets every day? pyramidal hierarchies are unsustainable and we haven't had a red candle on the weekly scale for almost two months.

in two words: zero-sum

i see what you did there

but the market exhibits frequency-dependent selection for individual profit. the first bears to wake up from hibernation win.

the knife says at least one of us, if not many, do.

the market always tops during the peak of bullish sentiment. hope you like holding bags.

you don't understand. price moves of this magnitude in this short of a time frame are not sustainable. as the price climbs higher and higher, all of those coins bought at $5 and below (less than a year ago, mind you) become REALLY REALLY tempting to take profit on. the price is so high now because as this rally gained steam, asks were pulled higher and higher, skewing the supply. the price is inflated; the huge sell-off is proof of this. $26 was someone's price-point and going higher will continue to trigger more and more of these kinds of sell-offs. the fact that we moved three bucks down and back so quickly indicates to me that there are amateur bulls who will buy at any price, as long as it was lower than what bitcoin was worth yesterday. this is not sound trading. no wonder the price is bubbling up.

the knife was the smart money exiting the stage in response to the growing risk of holding the bag when another big player cashes out. we've reached a top, and smart money will continue to leave, while transferring coins from 'weak' hands to 'strong hands'. this is a good thing, as we need a real correction to this insanity, but it won't leave the BTCUSD rate unscathed. expect a midterm downtrend.

4-MONTH DAILY MID-TERM



other timescales indicate reversal territory as well. so no, not cherry-picking.

you and all of the other irrational bulls. ready for the squeeeeeze

price is not the only piece of data. we'd already be sliding into the downtrend if it weren't for the irrational bulls who pushed it up to new highs. the speed of the recovery simply goes to show how hot the flames expanding this balloon are. it's all hot air though. just wait, the knife was the sign...

1-MONTH 6-HOUR SHORT-TERM



mass index giving a reversal signal on the slightly longer term scale as well, although still has yet to settle.

mass index just now touching threshold on the micro term, which should allow the noise from the movement to dissipate and the new trend to take shape. if prices continue to rise, that invalidates the reversal signal. if prices move within a range or down, that is a validation.

also, a nice bearish divergence forming in the stochastic oscillator.