This is a possible scenario but statistically not a very likely one

If we assume that a certain Venezuelan had bought bitcoins at 10k, which is a lot more plausible given the short span of time that Bitcoin was trading above that mark, he would have had his purchasing power halved by now (a little more than that but for simplicity's sake let it be so). Then the real question is, how much would he have lost if he had kept the local currency, i.e. the Venezuelan bolivar, all that time?

And we are not taking into account the fact that there is virtually no chance for his bolivar stash to regain its purchasing power in the future, while Bitcoin stash definitely can, and with a vengeance at that

You can always borrow more with the coins you already have using them as a collateral

That's likely the most important piece that many people who are trying to analyze the current market are missing, that you can sell Bitcoin with borrowed money as easily as you can buy it with your own dough. Without taking into account the possibility of shorting any analysis will be incomplete and misleading. Without shorts the price might not have been able to fall this low, but, on the other hand, shorts are also preventing the price from falling lower (however counterintuitive or paradoxical it may look or sound)

To me, it is six of one and half a dozen of the other

If "decreasing" interest causes the price to fall 6 times, it pretty much cuts as interest lost. Or that it decreased 6 times if you please and now we have 1/6 of the former interest. Indeed, there is some interest left, as otherwise the prices would have crashed a lot lower. But that doesn't mean that this interest won't decrease further with prices crashing lower. It's all a matter of naming conventions and mostly irrelevant to the point of this topic


But that doesn't explain why prices are stagnating as in the circumstances you describe, the price should go lower. In other words, it is not possible for traders to exit and price to remain the same

Bottoms definitely happen but not like that

They are not like a flat bottom at all (as the word suggests) since they are more like the Mariana Trench with a long, lonely red stick piecing support for a few minutes, maybe hours (this is how capitulation looks). If we see a bottom like this (and like the one we saw in September and October), it may prove to be a false bottom. Anyway, if your estimations were correct, we wouldn't be stuck in the current range of 3-4k for so many days. As much as I hope to be wrong, I have a feeling that these prices are to stay for longer than we expect

Actually, it perfectly well works in reverse too

Or who do you think is driving prices down these days, sharks or small fish? Without whales we would be trading in a very narrow range at whatever price, though at higher prices, as I explained in this topic, the market becomes a lot more volatile and basically anyone with a couple of bitcoins in their pockets can easily move the price in either direction (or start an avalanche of sell-offs). So any way you look at it, it is the whales who are responsible for any big price action, and as we are going downhill most of the time now, it is them at work as well

It is called the first mover advantage

But it is not only that, of course. If we cut the crap, the price of all crypto (Bitcoin included) is determined by speculation, and in these circumstances it doesn't really matter how many transactions Bitcoin can actually process daily, hourly, or whatever. What matters is how reliable and secure a coin is, and this is exactly where the first mover advantage comes and shines. Technical metrics like the number of transactions per second and similar stuff are important only as much as they can contribute to hype, not actual application because there is no such application

I'd been there (and here) in 2015

And the market was far from boring back then. In the first months of that year the price had crashed below 200 dollars, then rose to almost 300 and plummeted again to 200 in August. Since September Bitcoin started to rise and reached 400 dollars by the end of the year. The market was never boring back in the day as the price had been changing every other day in the range of 5-10%. Now compare this to what we see now

Apart from that, it is not necessarily an accumulation phase before the surge. It may in fact be a dissipation phase before the purge. Remember how it happened in November last year? We were also in a sideways market for a few months in the 6-7k range, and I guess the market was looking boring to many as well, with people thinking Bitcoin had been gaining momentum before rising to new local highs. It never came to be

Well, there are different views on this matter

For example, if we assume that cryptocurrency trading is in fact a zero-sum game (which is true for most altcoins aka shitcoins), it will be gambling for the total majority of traders as you can't defeat the house. The house in this case will be institutions (e.g. exchanges) as well as particular individuals (e.g. developers) who are either earning or not trading, as simple as it gets. But this necessarily means that the odds are not in favor of simple traders and they are set to lose at the end of the day as you can't beat the house. It is kinda accounting identity which you can't overcome unless you can milk the market somehow

So it is the only poker room out there which allows private tournaments, right?

Or at least claims so. Well, the site looks pretty bleak if not to say primitive. I wouldn't even bother to register there if I played poker (in fact, I wanted to try my luck at it with free points promised). I'm not even sure that you will be able to play anything there, not speaking of withdrawing your winnings, as the site seems to consist only of a landing page and a registration form. It looks like scammers now don't even care to make it look like a real thing. What are they all hoping for because it takes time and effort to create even a home page?

That largely depends on what asset is being traded. If this asset is entirely speculative, i.e. it doesn't have any use value in real life (read, it is a shitcoin), then it is definitely a zero-sum game. However, if the asset traded has a certain application in real life which requires this asset to be actually employed for something other than trading (for example, Bitcoin as a value transfer device), then it can't be a zero-sum game as some people would be buying it for purposes which have nothing to do with the "buy low, sell high" mantra (the speculation epitome)

Hope this helps with better understanding of trading as a zero-sum game

But do you understand people who are buying Bitcoin?

As essentially everything you say about Bitcoin Cash can be said about Bitcoin itself. The majority of Bitcoin users are using it for speculation or hold it in hope of selling it later at a higher price (which is the same speculation). So how is Bitcoin particularly different from Bitcoin Cash in this department? Note that I don't mean to say that Bitcoin Cash is better or even on par with Bitcoin, it is just what you say is equally applicable to any other cryptocurrency out there

It is not about transaction costs at all

Though they certainly matter a lot, especially when you are forced to pay something like 50 dollars to have your transaction confirmed in a reasonable amount of time. That's an outrage if you ask me. So it is not as much about transaction costs as it is about keeping Bitcoin properly decentralized. If it actually aims to become anything other than a purely speculative asset with a rather narrow range of application, the current model of reaching network consensus should be replaced with something more scalable, reliable and accountable. I don't know what it could be but it should definitely be

In fact, the chaotic things you mentioned were a lot less scary than this "boring" market. Anyone familiar with Bitcoin in particular and trading in general knows that prices don't change slowly and gradually, either way. It is almost always an abrupt rise or fall, totally unexpected most of the time. From this perspective, the longer the market remains boring, the scarier it becomes as it should be clear as day that the next breakout will be cataclysmic, mind-boggling and earth-shattering, with fortunes lost and made

In other words, beware of still waters, silent dogs and boring markets

I'm afraid these dudes are late to the party

Nevertheless, if they think that they do have something valuable to offer, why not join Bitcoin's developers (or developers of some other respectable altcoin)? If they consider their idea too radical to be included directly in Bitcoin (which is understandable), they can easily create a sort of "spin-off" project (not to be confused with a hard fork) in the same way as other Bitcoin-based or coin agnostic projects did like RSK, TumbleBit, Schnorr Signatures, and even the already mentioned Lightning Network itself

That doesn't explain why the price action is so restricted for so long

If you look at Bitcoin's volatility in 2013-2018, you will see that while there were periods when the price didn't change much, it still wasn't stagnant. And now we have Bitcoin's price which we hadn't seen till the fall of 2017, i.e. most of Bitcoin's history, and it is basically stuck in a very narrow range, which raises eyebrows. And there is a reason for that. The current situation may be called a "potential well" of sorts, so whenever there is a hint on a strong price movement, either strong resistance or strong support instantly builds up

So if you ask me, that can be explained only if you admit or take into account there is a massive amount of shorts at play, which limit the price action in both directions. Indeed, there is still a possibility of a breakout, either via extreme manipulation aimed at wiping away these shorts or via somebody actually having an intention to buy or sell enough bitcoins that no buying or selling wall will be able to hold back

There is an implicit assumption in the cryptocurrency trading circles that when people lose interest in a cryptocurrency, its price is bound to fall. And this assumption has solid grounds and is often proved correct. Wtf, it is proved true in almost all cases at nearly all times. But things turn out to be different with Bitcoin these days and in this topic you will find an answer why exactly

You may think that lack of interest would lead at first to a price crash, and then to a strong reversal. You may even hope for that and make your trading decisions based on such assumption. But it doesn't look like this anymore. Why so and how come? Basically because you can earn on the falling Bitcoin as easily as on the rising one, and at a certain price tag long orders become firmly balanced out with short orders

Such type of a market is possible when the interest in an asset is on the wane overall but the price is supported by the massive amount of shorts. It can be said that in these circumstances shorts take the place of the long term interest, but it is still an interest whichever way you look at it, even if it is a negative one. And ironically, it looks like it is able to support prices even though it can't drive them up (apart from short squeezes)

And the end result is stagnating prices, which is what we mostly see these days

That's the whole point about trollboxes

When in February 2017 the Chinese central bank cracked down on local exchanges forcing them to disable both cryptocurrency withdrawals and deposits, the news first emerged in the BTC-e trollbox as some Russian traders had been using Chinese exchanges too and they were told in private by the staff of these exchanges about this attack on crypto. On the next day the prices crashed like 20% with Bitcoin going below 950 dollars (though not for a long time). In this manner, I agree with you that trollboxes can be a valuable source of information (as well as disinformation, for that matter)

You don't get it

It is one thing for simple gamblers to attack each other with whatever strong language they want to use (though even this should not be tolerated but moderated). And it is a totally different thing for the staff to use such language at all in a public chatbox, not even speaking of the site owner himself (as it turned out to be). Anyway, let's hope this lesson serves them right and they will refrain from this stuff in the future. Just don't try to make it look like it was not a big deal and nothing happened

Personally, I don't think things are all that simple

From my perspective, it is a wrong approach as such, or wrong frame of reference if you please, to think in terms of "capitulation". As I wrote in one of my previous posts, if this market is to stay with us for long, say, like 2-3 years (or even if for just a few months), the terms like capitulation, bottom, major reversal are all going to lose any useful meaning. Basically, it is going to turn into nonstop bloodbath, with no regular bears or bulls but only with dogs in the pit

Apart from that, I don't say that a few weak hands couldn't and didn't in fact turn into strong ones over time as some certainly did. I'm talking about a bigger picture, obviously, where many common people lost their money and left for good. But I agree either it is the departure of weak hands or weak hands turning into strong ones, the competition became stronger while the market as a whole more ruthless and less forgiving (let's call it more "professional")

I see your point and I can't say that I strongly disagree with it

People that buy on the rise and sell on the fall can be called market conformists or even opportunists (actually, it is a good profit earning strategy), so they are definitely not the ones who start or change trends. But while they are not, they still add momentum, power and force to the trend, so, at the end of the day, it is exactly these people that make a trend reversal more difficult when the time has come. And from this point of view, they do affect market direction just by supporting it, thereby preventing its change


In fact, the answer to your question is pretty simple and straightforward

Bitcoin was and for the most part still is a vehicle for speculation, but when the jig is up and it no longer brings profits, speculators lose interest in it