Supposing that this pause at $96 turns downward within a couple of hours, there could be enough high-volume hours remaining today so that a wall-busting panic-selling spike down to $70 might just happen, e.g. in the blind due to goxlag. Otherwise, I think your assessment is likely.

In trader talk, you meant resistance at 97, right?

The previous pause was six hours long and the one before that was 12 hours long. I recommend patience - or maybe limit buy orders.

I have a most likely price target in mind beforehand. For example, a couple of days ago I obtained a price target for this capitulation by way of comparison with the first and greatest capitulation of bubble 1. That one had a 55% drop from the top. This one started at $145 and my price target was therefore $65. I created pre-positioned buy limit orders at Mt. Gox for $95, $87, $80, $76, and $65. Based upon the relentless selling pressure today, I split the lowest bid and created a new bid at $60. Regarding order size, I use a rough gaussian distribution, i.e. bell curve, that heavily weights the orders in the center of the spread. In a sort of monte carlo analysis, I expect the majority of my orders to get filled, but not necessarily the lowest one(s).

My buy points illustrated above are in whole numbers, the actual orders are positioned according to the nearby bid walls, i.e. my orders are relatively small and I want them filled before the 1000+ BTC orders commonly placed at whole numbers as walls.

These execution tactics are new to me. I vowed during the last bitcoin bubble to learn - and to profit accordingly.

Are not especially powerful price movements often characterized by extensions in EW analysis?

What we have here is a great capitulation in the wake of the biggest bitcoin bubble collapse to date. Above $110, sellers may be motivated by profit-taking, but below $110 nearly everyone who bought BTC between April 1 and May 2 is not taking profits when they sell, they are staunching a loss, and potentially very big losses. And on the other hand, smart money that sold above current levels is strongly motivated by bargain hunting. These two forces, distressed sellers and bargain-hunting buyers, oscillate in initiative thus causing the wave patterns - right?

The next several hours will reveal whether the price movement stays in the channel.

If there indeed is another leg down, and it has similar dimensions, then we could see an approach down to $70 in about 24 hours.

However volume typically drops off on Friday afternoon and over the weekend. The bottom of the capitulation may not therefore occur until Monday. Back in August 2011, the bottom of the first and greatest capitulation was a massive, high volume sell off, dropping the last 15% in two hours - which is the sort of volume one could expect on Monday.

Indeed this is fun - so, so much better than back in bubble 1.

Not necessarily, see what the official explanation is. Domain hacking affects domain name servers, not the web server hosting the forum - right?

Yes, I think lack of information motivates selling - or otherwise a retreat to safety, whereas sufficient information bolsters confidence, e.g. to bargain hunt in this situation.

Yep.

Then lower I believe.

I could not sleep without pre-positioned limit orders. Two of mine filled while I was asleep a couple of hours ago and I am very satisfied. We could get goxlag again today and you might not be able to reach the exchange to place a realtime order.

Yay! Should be a lot of attention paid to the bid wall at $70 by hungry fiat-laden traders today.

23 days after the April 10 peak



I believe that we are in the third day of the Great Capitulation of 2013. Recall that the corresponding capitulation back in 2011 dropped 55% from $13 to $6 during a six-day fall to the bottom of that capitulation.

The region between $110 and $60, I have dubbed the Bagholder's Ball, as nearly all the bitcoin purchases on Mt. Gox from April 1 to May 2 are nominal losers below $110 - and will be strongly motivated to sell.

I have a spread but not nearly as low as you. Hopefully I will be completely back in bitcoin in a couple of days. The first, and greatest capitulation, of bubble 1 took six days to reach bottom. In this corresponding capitulation we have been dropping for only three days from $145 ...

Hmmm. I have not adjusted my remaining sleep-at-night bids, as I expected this capitulation to unfold almost exactly as did the first capitulation from the 2011 bubble. That one dropped 55% from the start, and this one has only gone down 45% from $145. I may split my lowest bid and issue an additional buy limit order even lower. I will not feel really comfortable with my handling of this capitulation unless I miss a bit on the downside of it.

I followed advice on Reddit to add this domain to my /etc/hosts file. It worked.

Yes, and best wishes on your attempts, and those who you influence, to overcome the barriers that prevent big money investors, traders and merchants from smoothly accessing and using bitcoins. There are many win-win situations to be found and exploited.

I believe that this is huge but not immediate.

From the article ...

It is huge because Mt. Gox will react to the suit instead of spending all their time fighting DDoS attacks.