I second that. If BTC is EVER going to be a currency (instead of a commodity that it is right now) we are in desperate need of TRUE spreading amoung a vast amount of exchanges. I'd like to see  more than 50 exchanges (at least) in order to be able to talk about an independent price formation.

YET...

For the time being, a Mt.Gox assault by either / and US/Japanese authorities WILL pose a major setback to BTC. As long as it lasts, I know, but IT WILL. There is NO way ordinary people are going to adopt BTC when exchanges are either unreliable, filing fraudulent bank enrollment forms, closing after some months, etc. etc.

Bitcoin deserves better than what we've seen over the past weeks. But let's be honest: it will fail in an epic way if the problems don't get addressed. And let's be honest once more: that is a problem when having such a decentralized currency... All we can hope for is enterpreneurs willing to setup competing exchanges, and to conduct their business in a moral & lawful way. I just can HOPE for the better. Meanwhile, I would not be surprised to pick up BTC at a WAY lower price before the dust settles... And meanwhile, I am partially positioning myself into Ripple as well (now don't laugh - it IS legitimate, and it is a BUSINESS, contrary to the fukcing-up by Mt.Gox)

All things considered, all of the rumbling when it comes to MtGox does not bode well for Bitcoin in the short term as it relies way too much upon the MtGox exchange.

Long term, BTC will definitely survive IMHO, but short term I would not be surprised to see a scenario being worked out by authorities to bring MtGox to its knees. Tomorrow another headline, stating the Japanese Government closed down all Japanese bank accounts of Mt.Gox? I mean: what's next?? It doesn't matter how you twist this thing: if we want mass adoption for Bitcoin, such a fucking up by Mt.Gox  or any other exchange won't bring it... (What on earth were they thinking on completing the bank forms??)

So if this continues any longer I would expect to see BTC prices collapse once more, be it temporarily.  The reason being: trust is currently FAR from present in the market - on the slightest hickup we see heavy price drops in BTC. Yes, it then rebounds, just waiting for the next "negative news". That's not a vote of confidence. I wouldn't be surprised to see double digits within a week if this shit keeps going on.

All things considered, all of the rumbling when it comes to MtGox does not bode well for Bitcoin in the short term since it relies way too much upon MtGox.

Long term, BTC will survive IMHO, but short term I would not be surprised to see such a scenario being worked out by authorities, only to see BTC prices collapse once more, be it temporarily.  The reason being: trust is currently far from present in the market - on the slightest hickup BTC sees heavy drops. Yes, it then rebounds, just waiting for the next "negative news". That's not a vote of confidence. I wouldn't be surprised to see double digits within a week.

I'm not going to say the long term picture is looking great to me.
No, it is not. See https://bitcointalk.org/index.php?topic=197014.0 for some thoughts.

Yet - the BTC seems resilient. It actually managed to improve a bit. Short term, that is.
I went long, after staying on the sidelines. Since the reward/risk trade-off is now better.
(In fact, I re-entered the market at about the same price after fees as the price at which I left).

What to expect then? Well, I am looking for a short leg up now that the short term downward sloping trendline has been broken.

See the chart:
1. Notice how it bounced off the $123 level today. This is the 50% correction level from the last $166->$79 leg down. We've also got a level of resitance at $125. Looking for symmetry in the market, taking the 0.618 x up-leg 1 would produce $126 as a target. Pretty much near one another... So expect tough "work" at that level.
2. Going forward, if the level breaks (most likely IMHO) the next level sits at $132-133: the two fibonacci-levels from the previous decline converge there. (Meaning: the two fib-retracement levels from the leg $266->$50 and $166->$79). Interesting. Not a point of symmetry, though, so once $125 is cleared I would just expect some temporary resitance here.
3. 100% symmetry for the legs 1 / legs 2 would get us around $143. Intererting level, since it coincides with the starting point orf the recent violent downturn ($147 -> $79).
4. Coul we go higher? Yes, of course, BTC always can    but I suspect we'd be getting into parabolic events by that time. Maximum (on extension 1.382) would get us to $ 161,- and former resistance sits at $166.





So my best guess would be to see $143/$147. From a market symmetry standpoint of view.

Yet, the market may decide otherwise, and at each of the levels the market will provide you more info. So let's just see what happens at each of these levels. As of writing this, I see a small pop-down towards 117.6 (after hitting the first level). Looks like a normal retracement to me.

Once the targets are met (max $166) I would be looking for downward scenarios within the bigger picture I outlined.

"And hey... let's be careful out there..." 

There is no way of telling. It may happen, or it may not happen for 10 years. Actually, after fiercly hitting $80 once more (a re-test, and not breaking it) we MIGHT just go back to a second parabolic event right away. I'm not looking at that as my no.1 scenario though, but it could still happen. These are the levels I am watching  within the big picture: https://bitcointalk.org/index.php?topic=197820.0   .

In all: there is just no way of telling which side this market will break out to, and certainly no way of telling when the next bubble will come around.
I will just look at what the charts are telling me.

Yes, I've seen the price improvement happening as well on the hourly chart. Volume characteristics on the hourly chart also improved a bit, in line with the earlier positive divergence in the RSI. That short term downward trendline was broken, now price is creeping towards the downward sloping trendline of a higher degree. I'm watching the price action closely, as the price moves towards that more important downward trendline.

Yet, on the daily chart, the internals are still not positive, to turn me around.  Markets like these (and especially BTC  ) can take you by surprise indeed. Either to the upside (though still don't expect it) or to the downside in a nasty and swift move. Either way - too risky for me at the moment, so I'm still out.

You are welcome.

And well, I don't think I would be kept out - I'd just need to re-enter the market at a higher price. By that time I could be banging my head, but instead of doing so    I should by then recognize that my risk/reward trade-off would be much more favorable.


You are not missing anything. You are right that I might end up at the wrong side of the stick. However, for that very reason -to avoid such a mess- I am closely looking at lower time frames (see also my update on https://bitcointalk.org/index.php?topic=197014.40 ) to avoid getting into such a situation.

But in the end you're right - 100% guarantee on this I cannot give myself, so I shouldn't be expecting it from the market either.
Entering again at a far lower BTC price, though, is what I still expect I will be able to do.

For those that might be interested: here's a quick update on how I look at the current market, after we got the decline I anticipated.

Are we done yet? I suspect we are not, and expect we're heading for the 80-ies instead. At this point in time, almost all signs point to much further selling, and boy... there is indeed selling going on. The only "positive" might be a positive divergence that sets up in the RSI. However it is NOT confirmed. Only if the downward sloping short term trendline is taken out, things may turn a bit for the better. BTC has room to $108/$107 in the coming hours while still remaining in the down trend.

First the proof, then the action. So I remain out of this market.




_{A penny for my thoughts? Then drop me one  at 15S4zBMzP23hHWZNFndYaM3KYeLRUkZ8Qs}

Hi all,

Though some might like to be bashing the OP    here's a chart that I keep long term.

NO - I do NOT know where the market will be.
YES - I just look at what the market is telling me.
Right now, short term, I am wary of the market (see my post at http://bitcointalk.org/index.php?topic=197014.0

This is for informational purposes. A weekly chart with technical analysis. Logarithmic scale.
Do with it, as you like. You're  a free person   Just don't blame me for posting, should things go "really bad". (But what is bad?  )

I am watching those weekly levels (these are the values of the green upward sloping intermediate trend line).
Everything I want to remark is noted in the chart, just notice how stuff converges, also with the recent $79 level !!).
Based on this weekly chart, my best "guess" at this moment would be a re-test of $80. THAT will be the main level to check upon. To see whether the intermediate trend line will break, after we've already seen a negative RSI-crossing (which, beware, just by itself does not mean the sky will fall...)

SHOULD the support levels break, then brace yourselves, as we may be heading all the way down to $30 per BTC. (All the way down to the yellow upward sloping long term trendline)
SHOULD the support levels hold, however, then we're in for (far?) more price appreciation.

Keep looking what the market is telling you at those levels. That's basically my point.

I understand what you're saying, but I cannot think of a way for that to hold true. You see, the sellers are actually NOT reluctant to sell. They are willing to sell at much lower prices. Big time. That constitutes the legs down. During those declines the buyers are not powerful enought to stop it. During those relief rallies that you are referring to, the price is indeed bid up on light volume. As such, I read that as luring buyers into the markets (well, granted: the buyers decide for themselves that "the worst is over"  ) . Only to see the market crack once the heavier volume (selling orders) come in again.  You would need much higher market participation of buyers in order to really be able to reverse the down trend. Otherwise, the relief rally will fail.

In essence it is about this: the basic universal law of supply & demand apply to this BTC market.

Yes, in the long run volume is higher, that is correct. But that would be reasoning from a "buy and hold" long position only. Yet, the chart is confirming my chart and point of view: the intermediate swings that you see show higher volume on falling prices, and lower volume (compared to the previous price drop) on price appreciation. Just look at it in a bit more detail. Otherwise, I just rest my case, but had hoped to point you to the "internals"  

The China news has been out since May 3rd (CCTV broadcast). I, too, think that -in the end- a China participation will be beneficial. Yet, I look at the market itself instead of hyping TV stuff. It should be noticeable in the market. The market is up since May 3rd, hitting resistance. On low volume.

The fact you call tech analysis BS is up to you. Voodoo I leave up to others.
But obviously, this isn't for you. Let's be polite and leave it at "everyone is entitled to his/her own reading of reality", shall we?

As said, I am not into gloom & doom. But I'd expect to see prices dropping to $102 - $97 - $80 (for a re-test) or maybe even a re-test of the panic low at $50. You see, I tend to disagree with you on the fact that I am reading too much into volume. In the long run, volume is everything. To a long time holder, and even to a speculator. There will simply not be a sustainable price advance if volume (=people wanting the freakin' bitcoin) is not there. AAPL is not bidded upwards if there are no buyers, Gold is not bidded upwards if  there are no buyers. Etc. etc. etc. The same goes for BTC in my opinion. Market laws apply to BTC as well.

That is a correct understanding of my words: if a trend is supposed to be sustainable, it DOES need proper volume. Even BTC  cannot defy those market rules. You can see this happening in different time frames - 60 minute, hourly, daily. Therefore, I simply don't trust this market under current conditions. Also price action itself (should BTC crazily enough not adhere to any volume laws) is not giving me confidence enough to "stay in". (See second chart, please)

Here is some extra analysis - mainly using PRICE action as a starting point.
However I twist this thing, I just happen to see red flags everywhere. Until they are resolved, I'm out.

I definitely expect you will be able to get into BTC at a more favorable rate.
I'm not in for doom & gloom, but I will be re-evaluating my stance at these levels $102 - $97 - $80 - or beyond

Thanks for that, will keep it in mind for next time!

Yes, I am fully aware of its ups & downs. The only question is: will it start moving up again from current $120 or from a far lower point? It's all about perspective. Price wise, and BTC-holder wise. If you're one of those very early adopters buying in at $1, $5 or so I hail thee for having a better and early insight into BTC than I ever had. Then that's definitely good for you & thumbs up  

Errr... sorry if I posted this in the wrong place.
You mean the "market" forum or so?

I don't know that and neither am I claiming BTC will die. I'm not a BTC basher. On the contrary. But when it comes to be "in" or "out" of a market, I am not willing to take unnecessary risk.

Currently, the risk vs. reward to hold on to your BTC is not good at all IMHO.


(BTW, a falling BTC price would by nature be more likely than a falling sky    )

Hi all,

I'm anxious about current price formation. For one, MtGox is once again showing tremendous lag (about 1 minute, that's just insane). Something seems to be fucking up their systems again. Even though big orders came through just during the last minutes, those participants were not able to push the price above $123 / $124 per BTC.  [edit : I see the lag is now back to normal, but clearly something was going on around the $123 level ]





NOTE: this happens at an inflection point in the chart (the downward sloping trend line).

But most important of all, what I'd like to point at, are the volume characteristics of recent. These volume characteristics are definitely NOT healthy. For if a trend remains in tact, VOLUME should always support PRICE movement. After the initial crash ($266->$50) we've seen a wild rally back to $160. That was on decreasing volume compared to the volume during the preceding shake-out (but OK, it was a shake out). The 2nd part of the rise to $166 acutally showed an increase in volume, a peak, and falling volume on the price decline $166 -> $120. That would have been a positive, if only... the price would not have broken down again (all the way to $79) on an increase in volume.

That latest increase in volume (on a price decline) was already a negative for any price appreciation.  To make things worse, however, the recent upturn, from $79 to $124 today, is happening on considerable smaller volume. In other words, volume does not support the recent price appreciation either.





Given all of these circumstances, the most likely thing to happen is another leg down (full disclosure: for that reason I bailed out of my entire position).
If the new leg down materializes, it can easily set BTC back into the range of $50 - $80. That would hurt.

Expect massive selling (and unreachable exchanges  ) if that happens. Should all this not materialize, I'll be happy to buy me my bitcoins once the markets looks healthy again. Be it at a higher price, I'm perfectly okay with that since that would greatly reduce my risk. Right now, the market simply does not look healthy.

"And hey, listen... be careful out there"