It's surprising how stable the price has become.  Lack of interest?

Volume is about $150K a day, which is tiny.  Some of that is 'bots trading the same funds back and forth.  It's not clear how much money is flowing in and out of the Bitcoin system.  But the stability is clearly not an effect of large transaction volume.

Also, Dwolla is not a "large company". Dwolla is a few people in a hacker space in Des Moines, Iowa.

It's sometimes worthwhile buying up the stock of a company whose stock has tanked, to sell off the assets.

Bitcoin isn't a stock.  With Bitcoin, there are no assets to liquidate.

Maybe they're going to get out of the Bitcoin business.

That's a lame excuse. Mt. Gox should have no trouble dealing with the current low volume and barely moving price.

I've been saying "long slow slide" for months.  That happened. Now we're seeing the endgame, which looks like the endgame for most penny stocks. The volume is low, around $50,000 per day.  Some of that is 'bots running the same money back and forth; the actual volume out of the market is smaller. The price moves around whenever anybody makes a sizable transaction. I'm not expecting a big drop, just random noise with a long-term downtrend.

Bitcoin is now useless as a currency, because liquidating the day's receipts for one reasonably sized store would crash the market.

The end is coming not with a bang, but with a whimper.

When the exchanges shut down, Bitcoin is effectively dead. You can sell coins on eBay or Craigslist, but with no liquidity, nobody will accept them for routine transactions.

If I could buy a 3-month option (from someone who would reliably pay up if they lost), I would have bought one months ago. That's a straight bet that, 3 months later, the price will be lower. I wouldn't short Bitcoin, though. You're too vulnerable to a short-term swing.

I'd like to see a digital currency that works well enough to compete with Paypal. I've seen Digicash, Beenz, and Flooz tank.  Bitcoin isn't going to do much better.

What seems to be happening lately is - not much. Volume (in currency) is way down, and the price isn't changing much.  That may be the shape of the endgame. It's zombie mode, the fate of many startups. They're not going anywhere, they can't pay back their investors, but they generate just enough activity to keep alive.

Bitcoin, last 4 months, with 30 day trailing moving average.

We've had slow periods before, but for the last 4 months, the 30 day moving average has consistently gone down in almost a straight line. That has not changed.

The rate of decline has slowed a bit; the price dropped $3 in September, but only $2 in October. Of course, we're at $3 now. Not much further down to go.

It's not at all clear how the endgame plays out. The market is so much smaller now, and any big transaction yanks the price around briefly.

There's always a bottom at zero.

Bitcoin/USD, last 5 days.

Not as upbeat as a one-day chart for October 29th.

We're seeing more volatility as the price declines. It takes less money now to move the market. Welcome to penny stock land.

With the price so low and the volume in dollars down, any significant trades now yank the price around by a substantial percentage.  That encourages manipulation. There's only about $250K of volume per day on Mt. Gox now, and much of that is 'bots running the same money back and forth.

Pink Sheet penny stocks show similar volatility when someone is playing them.

No, the price is not slowly climbing.

At this point, the only remaining question is how the end game plays out.

As I've been saying for a while, if you're not out, get out. Especially get any cash and Bitcoins out of the "exchanges" if you're not trading them in the next 24 hours.

Has to be a Ponzi scheme.

There are already people running 'bots for Bitcoin arbitrage. That's why the remaining exchanges track each other so closely. That window has closed.

Usually because their business plan is "take the money and run". Bitcoin has had quite a few of those "exchanges" already.

Bitcoin's innovation is not that it prevents double-spending.  That was invented by David Chaum in the 1990s and formed the basis of DigiCash. Nor is "mining" new; that's from Hashcash in the 1990s. Bitcoin combines the two concepts. The end result is a lot like Digicash, but distributed. 

Exactly. As I pointed out months ago, MtGox should be licensed as a money transfer firm in Japan, and audited by the Financial Services Agency. The regulations aren't that severe; they were revised a few years ago to encourage Internet and phone-based payment systems.  However, they do require that customer funds be kept in a separate account, and that gets audited.  They also require identity checks of key employees, which means that taking the money and disappearing is no longer an option.

MtGox is subject to Financial Services Agency regulation even if they didn't register.  At some point, this will probably bite them.

This is why trading options is better than shorting. With option trading, your loss is limited and you don't get margin calls.

Bitcoin is so volatile that some random spike is likely to wipe out a leveraged short position.  With an option, you only care what the price is when the option matures.

Bitcoin doesn't have options, of course. 

As usual, we had a recovery after a big drop, and, as usual, it lasted about 3 days max. (Well, this time we had a fourth day, a Sunday when the price didn't change much, before the drop).

We now resume our regularly scheduled long, slow slide.

Mt. Gox, last 4 months, with 30 day trailing moving average (brown line)

The trend is rather obvious. It's a trailing moving average, so it's useful to shift it 15 days to the left to line it up with the actual prices.

 I starting pointing this out about two months back, and the trend has been quite consistent since then.  It may be leveling off a little as we approach zero. The moving average has been dropping by $4 per month since the end of June.  This month, it might only drop $3. 

Not much longer to go.