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81  Economy / Speculation / Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion on: March 28, 2014, 12:57:23 AM
A good bull-trap actually functions like a Ponzi, the first ones that get in will be rewarded when they leave at the right time.  Cheesy

Edit: 1h chart actually looks like a waterfall Smiley

this is how all trading works Tongue it's identical to a game where there are two rooms, A and B, and players move from one, to the hallway in between, to the other. each player's reward is proportional to the number of people who enter room A after him, minus the number of people who leave room A before him, as well as the number of people who enter room B after him, minus the number of people who leave room B before him.

imagine actually playing that game. seems silly, doesn't it? Cheesy that's what we're doing here, all of us!

--arepo
82  Economy / Speculation / Re: Arepo's Weekly Newsletter Discussion and Analysis on: March 27, 2014, 09:02:29 PM
Quote from: arepo
while i still don't see us retesting $400, there is little price action between these two price points to help determine what kinds of supports we can expect. i have to say this took me a little by surprise. do you think that the "china ban panic" on the forums contributed to the severity of this movement?

Good observation on the smaller bearish flag.

I'd say the 'china ban' panic helped trigger what we see now, but is not the cause. I still see a severe lack of consistent buying pressure at this price level. Sure, there are short bursts when we touch the lower levels of support, but in between volume and price action is nothing that inspires confidence in this level (>500) in my opinion. Daily CMF confirms that view, I'd say, it's not comparably at all to mid July 2013 when we turned around for good last time... actually, it starts looking like June 2013, right before the final leg down.

i figured that the recent bullish action was a "bulltrap", for what it was worth, because we did not have the necessary volume to overcome the askwalls on bitstamp, and FIGURE 1 from this week's issue still showed a little bit more of consolidation space before a breakout, but to move nearly straight down from the upper resistance straight through an important month-scale support, all within 18 or so hours!

the daily-scale CMF and MACD do both look pretty grim now. i expect more downward movement from here, possibly to as low as $400. i'm not too sure about your comparison to June 2013, though, as the "factor 3" model still suggests that the final capitulation is far off, but we'll see.

--arepo
83  Economy / Speculation / Re: Arepo's Weekly Newsletter Discussion and Analysis on: March 27, 2014, 08:32:16 PM

I would say there's more and more evidence now that we have to look into the larger triangle for support from now. Which would also mean, another month (approximately) of sideways/downwards movement.


i'd mostly agree. what is most troubling is that we broke under the $530 support, and are now consolidating in a very bearish flag pattern directly below it:


http://i.imgur.com/n5Th6u4.png

while i still don't see us retesting $400, there is little price action between these two price points to help determine what kinds of supports we can expect. i have to say this took me a little by surprise. do you think that the "china ban panic" on the forums contributed to the severity of this movement?
84  Economy / Speculation / Re: 20 Day Price Forecast (8.2% error) on: March 26, 2014, 08:22:24 PM
10 Hours ago, it was predicting ~535 for 9-10pm Eastern time, now it's 2 hours away and it's over 7% higher at ~575.

I want to see this thing be great, but that's a huge difference.

Yeah it did mess that up - that was a pretty big change. A 7% change in the 24 hour prediction is pretty rare and I think that's the first change that far outside the average margin of error that I've seen. That will happen sometimes though, and trading based on these predictions may cause people to lose money sometimes. However, I believe it is correct more often than incorrect and that in the long run, if someone were to trade based on these charts they would end up earning money. That's why I'm testing the trade simulator project I describe in the Coming Soon page - so far it's earned a small amount of money but it hasn't had a lot of opportunities yet since prices have been pretty stable.

i'm not sure trading based on this alone is a very good idea. using it to inform trading decisions along with other inputs is probably a safer strategy. an obvious weakness is that although the average error may be single-digits, there could be individual instances where the actual error is quite large, though these are rare enough that the average error remains low. depending on the size of your margin, one such instance could easily destroy your trading profitability.

--arepo
85  Economy / Speculation / Re: Bitcoin Is Dying, And why it is different this time. on: March 26, 2014, 08:04:23 PM
Where is why?

The answer is in there and can never be direct. The human Psyche strives to not be told what is black and what is white.
"Why" is always a direct, black and white question. You have a cause, and you have an effect. If you don't have that, you don't have an answer to "why". Do you have an answer to "why" or not? That's also a direct, black and white question, by the way.

Dad,


Why do people scream in opera?


Son, they are singing.


i like this guy Cheesy
86  Economy / Speculation / Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion on: March 25, 2014, 05:29:07 PM

Ya, there's kind of a which came first, the chicken or the egg.  To get more adoption we need the price to go up, but for the price to go up we need more adoption.

The Chicken.
(always the chicken)

The mutation happened during the "reception" of the animal (the first "chicken"), a animal that happened to lay eggs.
not-chicken-DNS + not chicken-DNS + randomized mutation-> chicken  ---> first egg.

Please do not use "chicken and egg", because it can easily be answered.

OT, but it's not that easy Wink

the egg came first if we're talking any old egg. there were plenty of egg-laying creatures long before there were ever any birds at all! if we're discussing chicken vs chicken-egg, we still run into a problem: is a chicken-egg an egg laid by a chicken, or an egg that contains a chicken? many are familiar with the evolutionary story of something not-chicken laying an egg that contains a chicken. but you seem to take for granted that a chicken egg must be laid by a chicken. the egg that contained the chicken does not count as the egg that preceded the chicken?

also, don't tell people not to use idiomatic phrases because they're not scientifically accurate Tongue that's not how language works at all.
87  Economy / Speculation / Re: Arepo's Weekly Newsletter Discussion and Analysis on: March 25, 2014, 11:13:47 AM
Thank you very much for your analysis! I enjoyed a lot the first two newsletters, especially the non-standard approach to market analysis using oscillators etc...
This last one is excellent, in particularly the RSI correction concept is just brilliant - I suppose it's an original idea of yours, since I've never seen such a methodology applied to explain the exponential adoption dynamics in a classical TA framework.
Still, I'm looking at that looming triangle in figure 1 and I can't help feeling the bear is still alive Smiley
Also it seems to me right now a consistent part of the analysts out there (especially EW people) are calling for "at least" a major retest of the lows, if not a lower low, with quite convincing technical arguments.
Could be very well a contrarian indicator of course... I guess we will see, the next few weeks are going to be exciting to say the least!! Cheesy


thanks very much for the kind words! the "bias function" derivation is original, yes, and still quite rough. i'm glad you enjoy my alternative methodologies -- my academic background is primarily in physics and mathematics, and i have relied on research, insight and empiricism, and hypothesis and test, to form the foundation of my technical knowledge and interpretations. whether or not the price action follows through as projected will be the real test of that particular hypothesis Wink

i know i have been the odd one out in maintaining a cautious bullish stance, but there are quite a few factors that are simply inconsistent with the doom and gloom that seems to be the consensus. that said, there is some data that fully supports a retest of the established supports, but it's been difficult for me to find evidence for the kind of paradigm shift necessary to bring us to lower lows -- it simply has never occurred after the kind of pattern we've been tracing out in the past four months. in the very first issue of the newsletter, the opening argument was one which compared the shape of the present pattern to that of the price behavior after the April bubble, and the proportionality is significant. this suggests, to me, that we should not expect anything out of the ordinary, and certainly not a new-paradigm bear market.

i will be continuing to collect data, and price behavior this week will hopefully tip the balance decisively in favor of a clear model for breakout direction, which will be featured in the next issue.

--arepo

88  Economy / Speculation / Re: Arepo's Weekly Newsletter Discussion and Analysis on: March 25, 2014, 03:29:32 AM

edit: to my two new subscribers, i'd just like to remind you that if you have any questions or comments feel free to post them here in this thread. i want to make this service as comprehensive as possible, and i know that this issue contains some math and/or technicals that some may not be familiar with.


In fact, that was much clearer and understandable than I first thought it would be. You keep it straight and limpid. So far so good.

I particularly liked your all-time RSI analysis. Keep up the good work!

i'm glad you received it well! Smiley thanks for posting your feedback.

i'd like to announce that, since we added quite a handful of new subscribers last week, i'm going to start to republish past issues of the newsletter by request. since the publication is meant not only to provide price projections and analysis, but also generally inform your trading and analytic skills, past issues may be of value to the newer subscribers. please PM me if you did not, but would like to receive any of the following issues:

AWN -- Week of 10 March
AWN -- Week of 17 March
AWN -- Week of 24 March

the backlog will also be available to all new subscribers! simply sign up for a subscription, and you will unlock access to as many past issues of Arepo's Weekly Newsletter as you have paid in advance for. currently, there are 13 issues left, with the publication set to run up to and including the week of 23 June.

--arepo
89  Economy / Speculation / Re: Arepo's Weekly Newsletter Discussion and Analysis on: March 24, 2014, 09:35:41 PM
this week's issue was just sent out to the following users:

oda.krell
docile
John999
kramerc
iron77
kwest
jlin
CoinBurner
Aquatic
Blue
Ultros
Roger_Murdock
rushthatspeaks

enjoy! Wink

edit: to my two new subscribers, i'd just like to remind you that if you have any questions or comments feel free to post them here in this thread. i want to make this service as comprehensive as possible, and i know that this issue contains some math and/or technicals that some may not be familiar with.

--arepo
90  Economy / Speculation / Re: URGENT, Bitcoin is on the verge of collapse !!! on: March 24, 2014, 01:09:03 AM


 Grin

Remember this post.
I claim there is almost zero chance that BTC will closely follow the paths you have in red.
We are talking about Billions of $$$ in value being wiped out, and I say 0% chance that the path will be like you say.

i agree. this is simply not how the price function behaves. although instead of 0% i must substitute the strongest statistical negative: that scenario is almost surely not to occur Tongue
91  Economy / Economics / Re: Economic Devastation on: March 23, 2014, 03:39:40 PM
Quote
Central bank was invented a the end of the Middle Ages, but it wasn't ubiquitous until the 20th century. In addition to the $223 trillion debt which is 313% of global GDP,

Translation: on average, a debt takes a whopping 3.13 years to repay. A contrary argument could be that thanks to all the technology, interconnectedness, and trust between groups of people, millions of friendly IOUs are lasting longer than ever before.

that's not what this means at all. it would take 3.13 years to repay only if every profit made globally was applied to the debt for that entire period of time. which is impossible because everybody would starve and/or freeze to death in about a month...

[snip]

As for the amount of money vs global GDP, since when does an anarchist care about aggregate government statistics? It's like being enthralled by the World Weather Report despite not planning to do any travelling. Its relevance is minuscule at worst.

this is an obvious deflection after i pointed out that the bolded statement is not only decidedly false, but also completely absurd. i'm not sure if you were simply trying to downplay the point, but if you actually believe what you said then that alone shows a lack of understanding of the situation.
92  Economy / Speculation / Re: How can collapse of USD affect bitcoin? on: March 23, 2014, 02:23:56 PM
Hi all,

It seems collapse of USD in mathematically unavoidable, I wonder how could it affect bitcoin.

Guess there is going to be a massive dollar inflation wave, would this skyrocket the BTC value or would it collapse it too?

it would skyrocket the BTCUSD rate simply because the USD would rapidly lose purchasing power. but i don't think that's what you're asking.

would capital flood into BTC as a safe haven? or would the BTC price crash as well, as it is irrevocably tied to global financial health?

this has been an active debate lately. many on these forums believe that BTC is a good hedge against the global economy, but some posit that in the event of a real financial catastrophe like hyperinflation of the world's reserve currency, BTC would suffer. i am undecided.

--arepo
93  Economy / Speculation / Re: Is Overstock.com slowly draining the price? on: March 23, 2014, 02:11:23 PM
The way I see it, the ecosystem cycles through buying Bitcoin to be spent at Overstock, and Overstock selling it back to someone else, and then someone buying or using Bitcoin to spend it back on the site again. Overstock's circulation is very good for Bitcoin, and I highly doubt its hurting it. Its causing more buys than hurtful sell pressure.

Like others said, it is certainly speculative by the looks of what is currently draining the price.

I'm curious what makes you think this is happening?  It doesn't really make sense for the lay person to buy goods on Overstock.com in this manner.   Why bother converting your dollars to bitcoin, then buy them back once you've spent them? That item will now have cost more after the bitcoin exchange fees.  It's just a more expensive hassle that most people don't want to fool with.

I think the majority, if not all, sales at Overstock are from the early adopters who acquired a lot of coins.

it seems you're missing the point a little bit so i'll attempt to clarify.

even if Overstock sales come from "old coins" and therefore are associated with large bitcoin-days-destroyed, as long as there is nonzero demand this can be a good thing for bitcoin by increasing liquidity. for instance, the fact that litecoin has a larger trading volume than bitcoin is one reason i've begun to take it seriously. most bitcoins must be traded off-exchange or not traded at all, and this kind of hoarding does many things, including hurting the general liquidity of bitcoin at the exchange. anything that gets these old coins available for sale is a good thing, as the small demand that is necessary to keep this "exchange inflation" from driving down the price results in a more equitable bitcoin distribution. this process also stress-tests the ticker price against the actually present demand (bitcoin hoarding results in hyperdeflationary events that distort the ticker price).

in other words, it's not the same people who are continuously buying BTC to use at Overstock, but because the demand is present to soak up the "Overstock-inflation", it is still a closed loop that shouldn't affect the ticker price negatively, and generally contributes positively to the health of the bitcoin economy.
94  Economy / Speculation / Re: Lyth0s Bitcoin Price Trending and Speculation on: March 23, 2014, 02:01:23 PM
Well that trendline that I posted has a R squared of greater than 0.9 meaning that the bitcoin price has an overall close association with time in an exponential equation. How would one use that info? Buy bitcoin when it is below the trend and sell when its above. And if we could retrospectively go back and buy/sell according to my graph, you would have always bought bitcoin cheap and sold it during each bubble. My graph by no means can predict lows and bubbles, only what the average price should be. So as the market continues from here on out, I'm personally going to buy below the trendline and sell somewhere (maybe 10-15%) above the trendline, rinse and repeat. People can speculate and try to sell higher before a bubble crashes, but I like playing the safer and more predictable way while still earning good revenue.

this makes sense. buy below, sell above is a decent strategy if you think that the best-fit line in question is predictive of a mean value. i was merely commenting on the posts you made which seemed to suggest that it should be predictive of the actual ticker price in any significant way.
95  Economy / Speculation / Re: Arepo's Weekly Newsletter Discussion and Analysis -- UPDATE on: March 23, 2014, 01:52:23 PM
so far, we've been following scenario b from my last post. the daily-scale Chaikin Oscillator has continued to flatten. the 12-hour Chaikin Money Flow has peaked. the 12-hour red ADX line has peaked. and the daily William's Oscillator is tracing out the inverted head-and-shoulders.

however, the daily RSI has decisively dipped below the 40-line, and the daily MACD shows a definitive bearish crossover.

all things considered, bid support looks strong again, and price action since the $541 low has been bullish, with a micro-scale bullish breakout up to $570 after the initial consolidation. i still have confidence in scenario b, and i'm pleased at the accuracy and precision of the 3rd target from page 10 ($540!). predictions become more and more divorced from the data set from which they were derived as the week goes on, so to see corroborating price action to such precision on Saturday is very satisfying. anyway, as it is already Sunday i'm going to save all of the juicy details of our current situation for tomorrow Wink

@oda.krell -- i see what you mean about our differing styles. both can be quite effective if done properly. because my techniques produce falsifiable models, i like to make a solid prediction, get into position, close the position with minimal loss in the case of a falsifying signal, or close the position at my leisure as the market follows through. although sometimes i front-run the market too much and there is some non-falsifying counter-prediction behavior that incurs a loss that i am forced to hold for uncomfortable periods of time before becoming profitable Tongue

trend-following is the opposite. you wait for a clear signal from the indicators instead of attempting to extrapolate, but the indicator data, as a rule, lags price and volume data. in this way, you run the risk of being too slow to get into position, and you are forced to determine whether or not you have missed the trend or if there remains profitable price action to be seen after already getting into position. in other words, you assume your position at a point of price instability by design, which is not something i'm comfortable with. by front-running the market, i usually can manage to assume my positions during periods of stability, and exit them as volatility and risk start to climb.

seeing price behavior in terms of trends is also a little problematic, IMHO. you talk about how downtrends are visible on many scales in the price data right now, but they are punctuated with periods of large price gains. the real "shape" of the price data in the past 4 months is an oscillation pattern, bounded by a support and resistance, not just a handful on interrelated downtrends. also, we're getting very close to the narrow part of this shape, which is precisely when price action historically diverges from these bounds, or "breaks trend". anyway, i tend not to focus on possible "trends" and when i notice a roughly linear increasing support, for instance, i call it a "moving support", as i'm sure you know from the newsletter. this pattern is more generalizeable than a trend as it also appears in indicator data.

---

also, Blue just signed on to the subscription service! thanks for supporting my work, and i hope others may see this thread and judge the quality and accuracy for themselves. PM me if you're interested in signing on before tomorrow's newsletter gets sent out!

--arepo
96  Economy / Speculation / Re: Arepo's Weekly Newsletter Discussion and Analysis - UPDATE on: March 21, 2014, 05:24:42 PM

Thanks for the update!

Perhaps I'm leaning a bit more towards a bearish scenario than you at the moment, with ~550 (EMA trend), or even 518 (fibo level) as possible targets for the coming days, mainly because I see clear signs we're gathering momentum to the downside (e.g. the daily MACD you mentioned, or looking at a Fisher transform indicator), and the divergences you see on the oscillators might not have the strength to counter that momentum.

So this is maybe one suggestion I have: your analysis is rigorous, and plausible, and it might well come true (and it'll turn out my more bearish view is wrong). But I also think to be profitable as a trader in the long run it is more important (and more likely) to be *prepared* than to be *right*... what I mean is that several options/scenarios should always be available to a trader, and he/she should pick the most likely one based on what he sees as time progresses.

So maybe you could look into the possibility of a continued (and gathering momentum) downward move, and what signs would point to that one playing out. To be clear: I'm not saying you should change your view, just that it'd be interesting to see your rigor applied to a (maybe less likely, in your eyes) scenario that diverges from the view you presented above.


you make good points. your call of $550 is plausible, and corresponds to the scenario where we move down to the 3rd target from page 10 and bounce. i have compiled some charts to further explore what a more bearish turn of events will look like.

right now we're looking at a standard triangle consolidation after the last move down that could very well be a bearish flag:

---
1-hour scale


http://i.imgur.com/vmIZl7A.png

---

we have three possible scenarios from this point:

a: we break upward -- very bullish, less likely.

b: we break downward and retest the last low or make a new low no lower than the 3rd target -- neutral, most likely.

c: we break downward and promptly break under the last low, continuing past the 3rd target -- bearish, least likely.

the data does not support a, and b will look like the bounce off of the flat support in the MFI as explored in my previous post. the scenario that you're mainly concerned with is c. what would that look like?

---
4-month daily scale


http://i.imgur.com/TDNqPfD.png

---

the Accumulation/Distribution data is trending down. this looks worrisome. however, the Chaikin Oscillator, which generally tracks the slope of the Acc/Dis line, is flattening, which suggests a weakening of downward momentum. if this figure continues to flatten, it would support the bullish case, b. if the trend changes from the increasing negative slope approaching zero to a decreasing slope, it would suggest case c.

---
4-month 12-hour scale


http://i.imgur.com/XRjAnXp.png

---

the daily scale Chaikin Money Flow shows solid support throughout the entire consolidation period after the last ATH, only briefly going negative during the largest volume capitulation events. the 12-hour scale, pictured above, tells a different story, and is another solid piece of evidence for the bearish case. we definitely need to see a peak in this data to be sure of scenario b. scenario c would see a continuation of the current trend with larger and larger negative values in this data.

the ADX is also looking bearish. we need the RED directional line to form a peak and then retrace under the past high at around 25. a continued increase in this indicator also supports c.

---
4-month daily scale
annotated with projection in red


http://i.imgur.com/CkGDhd8.png

---

for scenario b, we should see some support from the 40-line on the daily RSI. this provided serious resistance during the last set of lows, and today's immature daily candle has dipped us below. however, if we can hover around this point, this strengthens the case for scenario b. a decisive break below this low suggests scenario c.

the William's Oscillator is deep in oversold territory. a reversal here would look like the inverted head&shoulders shape as annotated. moving lower than the figure marked would suggest scenario c.

--- ---

i hope i have provided an exhaustive picture of each scenario: b, the bullish one i consider more likely, and c, the bearish one you asked me to explore.

thanks for the challenge! it's always important to stay impartial in price projections and be aware of all contingencies.

--arepo




97  Economy / Exchanges / Re: [OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading on: March 21, 2014, 01:19:51 PM
been trading BFX for awhile now, through TorBrowser. recently i noticed that the site would return a "security error" every now and again, citing my IP and forcing me to reconnect with a different identity. why is this?

also, i know some traders who are being offered 4:1 leverage. why is my highest option 2.5:1?

thanks

i know the new KYC/AML implementations are forefront right now, but could someone comment on the above? i would really appreciate some clarification.

--arepo

1) nobody is being offered 4:1 leverage as far as I know.
2) this is not due to us, we use Incapsula antiddos attack software and this can be the cause.

have a good day

Giancarlo
Bitfinex Team

thanks for the clear response. i really appreciate the service you provide Smiley
98  Economy / Speculation / Re: What is it this time? do the whales know something we dont? on: March 21, 2014, 12:52:34 PM
Sounds like pure TA junkie talk.  At the least, news can serve as a catalyst for the direction it was already drifting; increasing the speed and degree the market acts.

if this was a reference to my post, i actually intentionally left out the TA aspect besides the word "overbought". all that really means is that trader consensus is that the price is "too high", anyway.

and what you say makes sense. news influences price, but each dip and spike is not attributable to some news somewhere, as many newbies here seem to take for granted.

a weeklong slide is cause for concern, newbie or vet.

not so sure about that. it's best to limit how your emotions affect your trading and make a plan for all possible contingencies and simply follow through. the moment you start getting concerned is the moment you sell at a market bottom, and the moment you start getting excited is the moment you buy at a top Wink

--arepo
99  Economy / Speculation / Re: What is it this time? do the whales know something we dont? on: March 21, 2014, 12:40:35 PM
Sounds like pure TA junkie talk.  At the least, news can serve as a catalyst for the direction it was already drifting; increasing the speed and degree the market acts.

if this was a reference to my post, i actually intentionally left out the TA aspect besides the word "overbought". all that really means is that trader consensus is that the price is "too high", anyway.

and what you say makes sense. news influences price, but each dip and spike is not attributable to some news somewhere, as many newbies here seem to take for granted.
100  Economy / Speculation / Re: why does the price keep falling? on: March 21, 2014, 12:37:08 PM
It went too high in 2013 and then the trend diverged and then major market sectors got cut off and then the trend diverged even more.

+1 for elegance in simplicity, and overall accuracy
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