The 'silk road effect' has nothing to do with the stashes and I'm not sure if we even knew the size of the stash when it first happened. Here is the silk road effect:
1) Huge black swan event happens and something shuts down
2) Investors perceive that this accounted for XX% of all bitcoin business and the death will severely damage bitcoin.
3) Investors panic and sell everything.
4) Sneaky whales who have been lurking waiting for 'some black swan event' for months and months don't give a shit and start buying like crazy.
5) All the coins that were panic sold are suddenly accumulated, with no traders or shorts getting re-filled as they should have. There is a huge imbalance in the force.
6) Investors see the gigantic buying and think 'holy shit the whales are buying. things are as bad as they can possibly get and they are BUYING. This is BOTTOM. This has suddenly turned from bearish to extremely BULLISH'
7) Investors and traders race to rebuy their coins.
8 ) A massive short squeeze happens as shorts compete against traders to fill the void in the force, compounding the effect.
9) a full recovery is completed as if nothing happened.
9) Prices CONTINUE to rally above the original point as investors who were holding off for a trend reversal are given renewed confidence and continue to pile in. The media exposure from the black swan event and the crash helps also.
wow, this is a pretty good description of the process, hat tip to you, sir. ...meanwhile the price is stealthily making its retraction? So far the retracement is not unusual. Remember that silk road consolidated an entire week or so before finally going into a full breakout. Also, the difference between now and silk road is we were just in a bear market in the middle of final capitulation, while silk road was during an uptrend. Prices attempted to rally here with a lot of force but were opposed by the large bear market counterforces that existed before the gox crash. This was a rather odd way to end a capitulation and there might be more work to do to buy out all the capitulation coins. |
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i played the daytrading game during the april 2013 bubble. put in a measly $2k, convinced my parents to put in $2k, and proceeded to daytrade like a madman and turned that $4k into $20k. it was the damnest thing: i woke up the morning of the crash, looked at the price which was trying to eat through $260 and thought to myself, "self, it went exponential compared to yesterday, i should sell and buy the dip." but it was 6 am and i'd just woken up. went downstairs and ate a bowl of cereal. came back upstairs and the price was $140 and gox was completely frozen. so sad...i promised myself i'd just buy and go long from then on, and i made a hell of a lot more holding my coins for half a year and selling at 900 than i ever did day trading  now time to do it all again! I've discovered a 'best of both worlds' strategy you can use during bull markets. You keep some coins on bitfinex - keep them as coins at all times (not usd), in your margin trading wallet. Then whenever there is a sharp movement downwards, you take an additional 2-1 margin trading position briefly during the volatility to make profits. Then convert your profits to bitcoins and add them to your stash. This way you have the ability to take advantage of volatility and downswings while still being able to keep all of your funds long in coins - it makes you much more able to commit to being long. I used this strategy during the october/november rally and used it to make a 50x gain rather than the 8x gain that everyone else was making. Of course this strategy also requires that you trust Bitfinex with those coins, and that you're not keeping them in cold storage, so it's not really "the best of both worlds". Could you explain how that 2-1 margin trade actually works? You hold a balance bitcoins which are used as collateral to borrow usd to buy additional bitcoins. The additional bitcoins isn't like holding actual bitcoins - Rather you are holding a "position" which shows in a table with a profit/loss amount. The borrowed usd is contantly charging you interest so you want to close the position as soon as possible (on top of mitigating leverage risk). |
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I bought at 450, then sold at 480 to rebuy at 400.
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Should I be following Chinese chart or Bitstamp chart? It seems all the action still happens on Chinese time.
http://hypron.net/bitcoinwisdom.htmlYou can follow Chinese and Western exchanges at the same time. But if there are conflicting signals on each or signals that happen at different times, which chart takes priority? |
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Paul Buitink @paulbuitink · 1m
Additional info: the 3 companies bidding on Gox are well-known in the #bitcoin industry. Hope the community can solve the Gox problem asap.
What gox problem? gox is perfectly fine as it is - the best it has been in years. Look how well prices are doing on bitstamp now. |
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You are comparing the demise of an tor drug market to the demise of one of the biggest exchanges with the biggest holdings?
looking at the seized btc stash from DPR I think it is a fair comparison The 'silk road effect' has nothing to do with the stashes and I'm not sure if we even knew the size of the stash when it first happened. Here is the silk road effect: 1) Huge black swan event happens and something shuts down 2) Investors perceive that this accounted for XX% of all bitcoin business and the death will severely damage bitcoin. 3) Investors panic and sell everything. 4) Sneaky whales who have been lurking waiting for 'some black swan event' for months and months don't give a shit and start buying like crazy. 5) All the coins that were panic sold are suddenly accumulated, with no traders or shorts getting re-filled as they should have. There is a huge imbalance in the force. 6) Investors see the gigantic buying and think 'holy shit the whales are buying. things are as bad as they can possibly get and they are BUYING. This is BOTTOM. This has suddenly turned from bearish to extremely BULLISH' 7) Investors and traders race to rebuy their coins. 8 ) A massive short squeeze happens as shorts compete against traders to fill the void in the force, compounding the effect. 9) a full recovery is completed as if nothing happened. 9) Prices CONTINUE to rally above the original point as investors who were holding off for a trend reversal are given renewed confidence and continue to pile in. The media exposure from the black swan event and the crash helps also. |
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Should I be following Chinese chart or Bitstamp chart? It seems all the action still happens on Chinese time.
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It is going down - 500 to be tested soon.
Reason: we are not that much below the long-term trend, so given the sentiment, we are "hanging in the air" when the solid ground is in 400-500, below that is a steal and above that is hopes.
what is currently the long term trend?? around $680 right? Everyone's trendline is different. Mine says $350. $500 is not unreasonable - it would represent a 50% retracement for a move which has not retraced at all yet. |
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This is another reason why I'm always "quitting trading". - All the stress and disturbance of my sleep and life in general. I am basically noctural, and everyone I know HATES it. My head is so fried I cannot even do quick daytrading anymore like I used to. I cannot wait till I am in cold storage.
Back when I first started in Bitcoin and I made my first 500% profit one week, it wasn't from TA and following charts. It was from doing ninja warrior cowboy daytrading during crashes with the orderbooks, catching every high and every low on every little wave. It was FUN and REWARDING. I'd spend a couple hours, make my 200%, and then when the big movement was over I'd turn the trading stuff off and go away and live. I'd look at a slow chart that wasn't volatile and think "wtf am I supposed to do here. use ESP? No way. I'm outta here". Nowadays I do all this 'charting' and 'technical analysis' and stress out over long term trends that are nearly impossible to predict and there's always some black swan event to throw everything off from predictions. I am following news and staring at charts and screens and alerts nearly 24/7. The charts are in my DREAMS. It has ruined my life. When I finally get into cold storage, I am taking a big break.
You know why it makes you nocturnal in the US, and me nocturnal in the UK? Because all the main market making n breaking action is coming from those of a Far East time zone persuasion. What does that tell ya? That's a good point. Here we are looking at Bitstamp's order book/chart and being grateful for how strong it is now that it has taken over from gox. But meanwhile all the action is still happening on China's watch, and Chinese exchanges are doing 5x more volume (though some of that may be fake). This makes me a little concerned. Anyone else have thoughts on this? |
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i played the daytrading game during the april 2013 bubble. put in a measly $2k, convinced my parents to put in $2k, and proceeded to daytrade like a madman and turned that $4k into $20k. it was the damnest thing: i woke up the morning of the crash, looked at the price which was trying to eat through $260 and thought to myself, "self, it went exponential compared to yesterday, i should sell and buy the dip." but it was 6 am and i'd just woken up. went downstairs and ate a bowl of cereal. came back upstairs and the price was $140 and gox was completely frozen. so sad...i promised myself i'd just buy and go long from then on, and i made a hell of a lot more holding my coins for half a year and selling at 900 than i ever did day trading now time to do it all again! I've discovered a 'best of both worlds' strategy you can use during bull markets. You keep some coins on bitfinex - keep them as coins at all times (not usd), in your margin trading wallet. Then whenever there is a sharp movement downwards, you take an additional 2-1 margin trading position briefly during the volatility to make profits. Then convert your profits to bitcoins and add them to your stash. This way you have the ability to take advantage of volatility and downswings while still being able to keep all of your funds long in coins - it makes you much more able to commit to being long. I used this strategy during the october/november rally and used it to make a 50x gain rather than the 8x gain that everyone else was making. Of course this strategy also requires that you trust Bitfinex with those coins, and that you're not keeping them in cold storage, so it's not really "the best of both worlds". |
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Well, I live in CST timezone and also am a graduate student...I've pulled probably 8 all-nighters over the past 2 weeks watching bitcoin, attempting to average down and ride waves, etc. Seems like the spikes down always come between 3 and 4 am my time, its to the point where i can very comfortably pull an all-nighter without coffee or energy drinks. Now I'm completely bought in for an average of $475/coin. I'm putting my coins in a cold wallet and will report back in April (seems like a month a lot of speculators enjoy referencing for some reason?) Looking forward to returning to a normal sleep schedule, and quite proud of my work! Gonna be paying off all my student loans with these ones  This is another reason why I'm always "quitting trading". - All the stress and disturbance of my sleep and life in general. I am basically noctural, and everyone I know HATES it. My head is so fried I cannot even do quick daytrading anymore like I used to. I cannot wait till I am in cold storage. Back when I first started in Bitcoin and I made my first 500% profit one week, it wasn't from TA and following charts. It was from doing ninja warrior cowboy daytrading during crashes with the orderbooks, catching every high and every low on every little wave. It was FUN and REWARDING. I'd spend a couple hours, make my 200%, and then when the big movement was over I'd turn the trading stuff off and go away and live. I'd look at a slow chart that wasn't volatile and think "wtf am I supposed to do here. use ESP? No way. I'm outta here". Nowadays I do all this 'charting' and 'technical analysis' and stress out over long term trends that are nearly impossible to predict and there's always some black swan event to throw everything off from predictions. I am following news and staring at charts and screens and alerts nearly 24/7. The charts are in my DREAMS. It has ruined my life. When I finally get into cold storage, I am taking a big break. |
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Liberty reserve: A centralized banking and payments processor institution which held your cash and other currencies.
E-gold: A centralized banking and payments processor institution which held your funds in 'gold' - supposedly it was all backed up with real gold locked up in their vault overseas.
Bitcoin: A decentralized commodity on a peer to peer network, given value only by people when traded with other people or on markets.
The business models of these have no similarity at all. There is no way to make a comparison.
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Pardon me if I haven't been paying attention, but what is your take on the market from here?
Maybe you should do some reading...let's see TERA called 450 a 'natural bottom' and 520 unbreakable resistance...oh and he quit trading... again. You guys should get a room. 450: I thought that was going to be a local bottom during a multistep downtrend before a further drop. I didn't realize this entire drop was going to be all in one leg. 520: I called that 520 was going to be a short term resistance based on 4 hour charts and that it wouldn't proceed past that until 4 hour macd crossed. That area did serve as a level of resistance for an entire 12 hours but ended up prempting the MACD by a few hours. I believe you still had the chance to buy at 535 when it finally crossed. Quit trading: I said I was going to quit trading AFTER REVERSALS (in bull markets). This not only has a trading purpose behind it but also allows me to keep my coins in cold storage away from the dangers of exchanges which I shouldn't take if I'm going to be in coins most of the time. |
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What? That rise took 8 days. This took less than one day.
Pardon me if I haven't been paying attention, but what is your take on the market from here? I have buy-ins in low $500s and I am short since just recently $575 (after suffering a little bit of slippage transferring BTC around). What sort of a retraction would you personally be looking at here? Would you consider the possibility that the 'recovery' has occurred so sharply, that it may actually represent a dramatic counter trend reaction. Afterall, it could be argued that we have fallen short of the last crest at $640, and looking at the longer term chart and forgetting the astronomical nominal values involved, it could be argued we are staying right on track for lower lows:  I am not saying that I necessarily subscribe to this viewpoint at this point in time, but this recovery has been insane and very much in keeping with the sharp price spikes consistent with bear market counter trend rallies. Also, there is far too much relief and euphoria around here........perhaps that this psychology exists cos it isn't really yet the bottom? Here's the evidence I have so far that 400 was (probably) bottom: 1. The VOLUME: Bitstamp did 118K BTC of volume in a day. This type of volume hasn't been seen since the bottom in December. Huobi also did a record volume of >300K but Huobi might be irrelevant. 2. The trends support this being possible bottom: including the horizontal support at 380 and the long term logarithmic support somewhere between 300 and 500 (each of us have a different opinion about where this trend is). 3. The order book: The bitstamp order book now looks like a monster of giant continuous bidwalls against a tiny ask. Everything is consistent and there are no more 'cliffs' for the price to fall off of. The amount of fiat on there increased from 8M to 22M (an ATH) overnight. 4. The hammer candle on the daily chart. 5. The recovery right back above the 530 low that took two weeks to break. 6. The amount of overextended short interest that was on bitfinex. 7. The weekly chart pattern consistency with all previous bitcoin rallies (except 2011 bubble) |
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If buying bitcoin against the log trendline and 200EMA isn't a safe time to buy then I can't imagine when would be. I'd have to give up bitcoin trading because there would be no strategy to follow.
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Where did all that dirty FIAT come from? we were around 15million the whole time, now 20+?
Former MtGox users who want to get back into the market? Not sure whether deposits clear that fast though, there might be a LOT more coming. No. The sudden fiat on stamp effect usually comes from bitfinex. When an investor/trader/short-cover/etc from bitfinex buys from a trader from bitstamp, the coins are removed from bitstamp and sent to bitfinex and the fiat is sent to the trader on bitstamp. The trader on bitstamp is then left with a bunch of fiat which is replaced on the order book to make his next bid and rebuy, hence there is more fiat on the book. So in essence bitfinex serves the purpose of accumulating coins away from and injecting fiat into bitstamp during these crashes. The sudden huge amount of fiat today could be attributed to massive short squeeze on bitfinex as bitcoin hit bottom and bounced 55%. Short interest on there was extended extremely high before this. Some of the whales accumulating in the 400s were probably Bitfinex also. |
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If only he applied his skills to calling tops instead.
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The move has been stunted for the night. capped by 610, I think we will test the 500 level again. this little bull run was too steep.
I actually did sell some, hard to believe it has steam to raise above 600 now. The train is not leaving anybody, but the tide has turned. 500 here we come! just make sure to not ignore the 1d chart... ...this could turn out to a long bull market in few days Same happened on June 19th 2013, where the drop from $105 to $66 (daily average) started. Don't place your bets on a single indicator.  What? That rise took 8 days. This took less than one day. |
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The move has been stunted for the night. capped by 610, I think we will test the 500 level again. this little bull run was too steep.
I actually did sell some, hard to believe it has steam to raise above 600 now. The train is not leaving anybody, but the tide has turned. 500 here we come! Any theories on why such a crazy bounce occurred? There are no 55% surges out of capitulation in the history of bitcoin. And look at the stamp order book. Wow! |
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