Let me get this right... You have, by hand, *estimated* the pre-mtgox prices, and then boast that the regression analysis of those made-up prices gives you excellent results for the 2011 bubble?

You've got to be kidding, right? That's not how statistical modeling works.

In case you seriously need an answer to this: if you don't have data for some period, and you have no way to systematically extrapolate data for that period, you don't model that period. The End.

And about the glaring difference between your model and that of jl2012: you're correct that you recalculate the regression as well each month, but you don't *present* it that way. You keep posting the latest regression trend line, and then the discussion is always about that one, and how accurate it is, completely forgetting all the preceding ones.

jl2012's presentation on the other hand is much more "honest" if you want: it shows, in one graph, exactly what his model predicted at time step n, and what the actual price was at time n.

That way, everyone can see, at a glance, where a loglinear regression model was spot on, and where it missed the mark.

Which brings me to the second point...



This is just too easy... I only need to go your post history of yesterday or so to find the following:


In other words, because we are drastically below the trendline right now, in your words "rock bottom", now is a good time to buy.

What this claim completely ignores however, and which is beautifully visible in jl2012's presentation, is that around October 2011 we hit "rock bottom" as well, but in reality we had about another halving (or more) of price ahead of us, i.e. it would have been well ahead of time to buy back.

It all runs down to the same criticism that applies to all log-linear price based methods:

They are an interesting tool to get an idea of what order of magnitude of price to expect for a given time, but they are *way* off at times, and trading advice of the form "we can only go up now, because: rock bottom" is in no way justified by the accuracy of the model.

Most obvious change that could be an improvement I can see right now would be using a 30d EMA to get the ratio for the predicted price instead of the all-time average.

About my "crude observation", I just noticed you made it basically yourself in your last post  A simple "cross over" method, similar to pure price based momentum trading, would have outperformed b&h (I say this from eyeballing it ). Some form of treshold is probably necessary, some whipsawing is visible, but what is interesting is that, as opposed to price-derived momentum trading, this one seems to be less lagging, in some cases even anticipating price changes. Example 1: in 2011, the exp. price shot through price, well before the actual price turnaround. example 2: 2013. the bearish CO happened rather late, but the "buy back" signal seems to have preceded the reversal in July by about 3 weeks. THat's a pretty good signal, seriously.

There are problems, obviously, in the sense that a downwards CO would have made you lose parts of the uptrend that happened between July 2013 and December 2013. And, of course, the million dollar question is now, how we price develops now. There's a very clear CO in the past week(s), well above any reasonable treshold, so unless the bear market we're in ends now, that would be a pretty clear bad signal.

Not enough people, apparently.

Don't think so. "Apathy" is more like it, imo.

Today something dawned on me:

We can actually start seeing signs of "sellers' exhaustion" in volume and price action, but what is fascinating is that, different from the previous cycle, there is no sign yet of "buyers' appetite" re-appearing correspondingly.

Very cool, Eurotrash. Thanks for posting this.

To clarify: transaction volume = total amount BTC transfered on-chain (per day?) times USD per BTC at time of transfer. Yes?

Also, for 'expected price', do you use the all-time average calculated at the end of the series? Or a moving average?


I guess blockchaininfo does a similar calculation on their site, but I like your better because the view is more detailed, and we can discuss it here There's already one (relatively crude) observation I could add after I see that I understood your model correctly.

That only makes sense from the perspective of a certain type of investor: a) unwilling to trade often (i.e. mostly buy & hold style), and b) completely convinced of the long-term success of Bitcoin.

I'm relatively agnostic right now about whether that was the final bottom or not (although I'm leaning towards 'not'), but to answer your question, "how could anyone pass up such an opportunity": those who believe BTC/USD is still in for a longer decline before it can go up again, and who are at the same time not interested in making a quick profit by trading the immediate retracement after the (local) bottom.

You should probably load the latest bars...



Or, as the labeling says,

:(

How? It's a triangle. It broke to the downside. That means it's solved. What that means for further price action is another question, but at least in the immediate aftermath of the downwards breakout, we saw a new low, so waiting for the triangle to resolve was the right choice.

Okay, I understand now. I still see a decline in volume (good view imo via short volume MA on tradingview) , but I guess time will tell

Question to the Bitfinex pros (I'm an on/off trader there myself, but not much lately)...

Is there a way to see "pure" finex volume anywhere? I.e. only those trades not routed to stamp?

Because, unless I'm mistaken, pages like http://bitcoincharts.com/markets/ show the combined volume of internal and external volume under Bitfinex.

"300k BTC changed hands"?

"Higher volume than previous bottom"?

Oh, you're counting Chinese volume 1:1. I wouldn't do that. Here's what I think matters, volume wise:

Lack of volume, lack of clarity on the China situation, and not breaking through 430 decisively.

As always, I'm open to new information, but for now, I'll pass.

Which is precisely why you will (as I predicted a few pages ago) continue whining all the way upwards during the next rally.*

For the record, there are people in here who I buy their % gains from (tera, even billy).

Yours, not one second.


* This is not an endorsement of the current upward swing. I think it's a bull trap.

Don't forget to vote, please.

The idea is to get a quantitative snapshot of forum sentiment for posterity, not so much a qualitative one (i.e. stuff your arguments for why it's over or not ), according to my half-arsed idea of a longer running experiment.

See, but that'll be the fun part. In 3 years from now, when we drop from 9k to 4k, I will ask again "did we hit rock bottom". Then I'll dig up this thread as well and... won't be able to conclude anything... damn. I must have missed a step

You just made up an entirely meaningless definition of "FUD". Your list defines "bearish rumors", which are as likely (and justified) driving price down as "bullish rumors" are justified in driving it up.

'FUD proper' is the concerted effort by group of market participants to drive down price by a disinformation campaign (which did in fact take place, at least in this forum -- hard to say how much it mattered though).

If you really can't see the difference between what I describe above, and the (justifiable) concern that volume in Chinese exchanges will dry up and trading upon that concern, you've lost your empirically motivated view, and replaced it with one that is dictated by wishful thinking.

Don't worry. You're not the only one who feels that way :)

Top was 32, I think. But agreed, I'd be very surprised if we would see a corresponding decline of (1/2)^4 like back then, considering that the run-up to 1200 saw a much smaller increase. For comparison, I like to think of the 2013 decline as (approximately) halving twice 260, 130, ~65.

They are cutting the (by volume) most /relevant/ links.

Happy now?