Alternatively, both views are post-hoc justifications of processes that are nearly completely unrelated to individual actions anyway, and the circumstances that produce those different rationalizations are emergent properties, complex enough to be not well understood (probably though: institutions and a bit of geography), which makes post hoc rationalization so damn tempting.

[tinfoil time]

Sometimes I imagine I'm a billionaire / head of investment of a major bank / king of the Jewish space lizards.

I'm morally bankrupt, command fantastic wealth, and not so completely comfortable in my position that I cannot even see the potential of Bitcoin at least. And perhaps its danger to my position.

Here's what I most certainly wouldn't do: transition from fiat wealth to crypto wealth in the obvious way (by buying, on a public market). At least one perspective of what personal wealth is is that it is a 'ranking' among humans. Why would I take the risk of decreasing my own ranking by increasing that of early crypto adopters.

Here's what I would maybe do:

1) Try to destroy crypto

2) Try to get a decent piece of crypto without rocking the previous balance (see paragraph above).

How? Buy coins directly from miners, at market price, and at the same time, "invest" some of those newly bought coins to keep market price low.

The difference between 1) and 2) is whether you plan to end up with a net loss (but a long term success, because crypto is dead), or a net gain. The amount of coins sold publically vs. those held distinguishes 1) from 2).

Not an entirely new thought, I know. As others have pointed out, this can only work for so long before public interest overwhelms any such manipulations.

Perhaps. In fact, I think so too. But I am not entirely sure about. At the very least, the above scenario is on my list of crypto investment risk factors. Not at the top, perhaps, but it's on there.

[/tinfoil]

I find the susceptibility to ressentiment fairly evenly distributed in this forum. It almost reminds me of a school yard sometimes, with all its childish intrigue.

The rest of what you say sounds a bit too new age-ish for me. "Weakness of character" related to likeliness of long-term success. Really? Might be a different perspective on things across the pond (assuming you're from the US) ... I remember reading a survey in which a significantly higher number of EU respondents felt that the major developments in their life were not under their direct control compared to US respondents.

Interesting observation. Didn't see it, but I'll try if I can find that view by looking at it myself.

Let me change my point a bit: by volume alone, China, and China alone should matter (cue Jorge). Bitfinex played a crucial role today. Bitstamp does as well (the mini recovery right now is mainly driven by stamp and finex, to my eyes).

So the old method, look at the highest volume exchange, and ignore all others, doesn't work anymore. Agreed with that statement?

Thanks, devin. I like your style too. No homo. (a bit homo.)

Trade - or hold - safely.


EDIT avatar from genius webcomic PBF,  http://pbfcomics.com/253/

Not the worst advice. Listen to OP, especially the newcomers.


That said (and believe me, I'm not gloating/trying to rub it in), now is also the time to repeat what has been said so many times before:


Don't invest more than you can afford to lose.


There. In bold, 14pt and red.

If you kept that rule in mind, you're safe to ride this one out.

If you didn't, and you see your kid's college fund melting away, then this ride will be nauseating. I'm not going to suggest to sell now (see OP), but I do suggest that, at the next opportunity (i.e. when price has recovered) you reduce your exposure to a level that allows you to sit out swings like this without losing your lunch.

Best view:

http://www.bfxdata.com/swaphistory/totals.php

(scroll down for BTC)

I beg to disagree :) Casually dropping some info about your at-noon breakfast of roasted liver with wine, in the middle of a capitulation that'll cost quite a few investors dearly, is the real oil-on-fire. Which is why I got the Marie Antoinette association.

I avoid calling it "fake" volume, but I agree. The current (daily) leg of the capitulation is, in my opinion, mainly driven by Bitfinex - not really a surprise, given the huge built-up leveraged long positions that Blitz highlighted in his post ages ago. Despite their daily volume still being dwarfed by the Chinese exchanges.

So that's further evidence for those of us who believe that, while CNY volume might be "real", it is simply less relevant, per dollar, being largely automated, zero fee volume.

Correct. That's why I said, I'm sure they dedicate a lot of resources internally to model the market, their risk exposure, and let it guide their actions.

Two remarks:

1) as Fray pointed out, customers also take coins from them. I disagree however that this means they have little use for external markets. I do believe that, at least currently, they'll have more coins than they can "get rid off" internally.

2) Funny that, after a half year bear market, having to handle a  1.6M USD order in coins is suddenly considered  a liability unconditionally. Wanna bet people feel differently if we're in an uptrend? "Wooohooo, 1.6M USD *slippage free*. Jackpot baby!".

Note: I'm well aware it's a huge risk. But assuming they have capital (USD) reserves to remain liquid, they might chose not to liquidate a huge order like that, but instead sell it off slower, possibly even on higher prices than when they received it (and what they paid for). I really depends on their willingness to be exposed to an exchange rate risk, imo.

As a result of Bitfinex margin call cascade, ~$450 reached. Whether we go down further or not, I consider that deep enough to qualify as a "dramatic selloff" as predicted by masterluc.

Another plus point added to his already excellent record.

I figured that BBW graph wasn't supposed to be a (broken) triangle, but care to explain what you did do there? I'll freely admit, I have no idea what indicator/technique you're using there, and I'm on TV myself.

Not sure where you get the idea from that this will be so easy. I've seen a few accounts that very obviously are linked to a posting bot. Those posts seem to be reported (and deleted) rather quickly usually.

And if the automated approach should work, then what prevents them from using it to "farm" for high rank accounts directly (in a fixed requirement rank system).

All that said, the deviation defined rank idea looks very nice to me and has a certain nerdy appeal, but in reality, it's not really worth the effort probably. Introducing a new rank each 2 years with about twice the activity requirement is a hack, but an acceptable one imo.

Or maybe we did what we've been doing for the past 6 months: Overshooting the target (usually to the downside), reverting to the mean with some force, then going even higher than that based on momentum and then... wait to find out if buying support matches the level we reached. In May (mid 400s) the answer was a clear 'yes'. In July/August (600s, high 500s) the answer is not so clear imo.

Customer pays according to current market price, but at a rate fixed for the day, minus 1% fee. From their webpage:


To my understanding that means it is up to Coinbase to make a profit (or, if they fail, a loss) with the actual conversion on the market(s).

Keep in mind that payment processing through Bitpay allows the recipient to set a percentage (from 0 to 100) in how much of the value he wants to receive in Bitcoin, and how much in fiat currency.

Let's assume the payout was requested completely, or at least: mostly in fiat. It is then up to Bitpay how to process such an order. They need to be liquid enough (in fiat) to be able to serve the customer without delay, but they also need to be profitable. Imagine for a second they'd process an even larger order: if they pay out 10M USD to a customer, but drop the entire Bitcoin amount valued at 10M in one big dump, they'll never receive the full USD amount, through slippage and market panic. They'd incur a huge loss for themselves.

For that reason, I consider it extremely likely that Bitpay will have a number of quants doing nothing but optimizing the above process: how much to sell, when, and at which rate, to remain a) liquid, and b) profitable. Which, in practice, can very well mean that they wouldn't dump the coins at all for some period after a transaction - but I also agree: to limit their risk, the bias will be on selling. Just not in the form of big dumps.

Keep in mind, I'm just trying to give an explanation on why I don't see the swing of the last days as driven by "panic selling". Sure, if your trading horizon is daily, then selling today at $530 was a miss probably. And if your assumptions about Bitcoin are such that, in a year from now, you think it'll be worthless anyway, you should have sold long ago.

But if you, like a number of speculators/semi-holders/traders/whatever in here, are mostly opportunistic, and don't subscribe to the mantra that any price below the ATH (or some uber-optimistic regression trendline) is "cheap", then what's so irrational about selling now, expecting that you'll be able to buy back cheaper in a week (or a month) from now, when and if the market turns around again.

Time will show if it was indeed "panic selling" or not. If price goes further down from here, it wasn't. If we recover and never touch the mid-500s again, it was.

Works now

Any chance you could make the MA on the first chart optional? It's sometimes preferable to see price alone, without any overlaid indicators.

Why? There are two obvious candidate scenarios to take profits, i.e. exit a long position: early on after a rally, at a suspected peak (which requires a certain amount of predictive analysis), and comparably late, when it looks like the only way to go from here is down (momentum based analysis). To me it looks like the current move is driven mainly by the second factor.