September 2012 so far in review

[dree12]

It's been a wild August, but a quiet September amidst press from east to west. Here are a few points (Mt. Gox USD market) I find noteworthy:

Consistently High Prices. Bitcoin has not traded below 10 $ since 2012-09-03. This makes 17 full days above 10 $. The only other streaks of over 10 $ that lasted longer than a full day were:

• 2011-06-03 thru 2011-08-02: 61 days
• 2012-09-03 thru 2012-09-19: 17 days (streak still active)
• 2012-08-03 thru 2012-08-18: 16 days
• 2011-08-15 thru 2012-08-24: 9 days
• 2012-08-25 thru 2012-08-30: 6 days

Consistently High Volume. Measured in USD, the volume has exceeded 100000 $ since 2012-05-27. Such a streak has never before occurred in the past, not even during the 2011 bubble.

Low Volatility. September 5^th, 2012-09-05, was the last day to have considerable volatility. Since then, volatility has been either normal or below normal. This volatility coincided with the Romney ransom.

Yearly Gains Continue. Compared to 365 days ago, 2012-09-19's weighted average was 103.11% higher. Prior to September, such an increase over one year was last seen in April 2012 (2012-04-27).

As we approach the North American holiday season, and with it the block halving shortly followed by mass selling for gift purchases, volatility is likely to move up again. A good time to speculate, indeed.

[Vandroiy]

I'd not call it "consistently high volume" like that. USD is a strange measure; put this way, the statement is redundant with the high prices.

It's more useful to look at BTC volume, and that one is rather low in September when you compare it with the rest of the year. Especially so when considering we normally have additional volume when there is price movement. Even most of the time with little price movements we had this year, volume was often higher than in the last two weeks.



Compare volume and movement here (logscale to put emphasis on the relative movements)

http://bitcoincharts.com/charts/mtgoxUSD#rg360zigWeeklyztgOzm1g10zm2g25zvzl

[dree12]

I'd not call it "consistently high volume" like that. USD is a strange measure; put this way, the statement is redundant with the high prices.

Not necessarily. To be honest, we can all agree that at the moment, the USD fluctuates less than the BTC. To measure the volume of value traded, USD volume is likely more useful. Of course, USD volume with CPI factored into account may be even more useful, but with a measly three years of history, I doubt it would make much of a difference.

[Vandroiy]

I agree with that. I was just saying, if price rises this much, it's natural that volume in terms of value or currency has risen to some extent. To predict the market state, the relative volume w.r.t. market size, which you can neatly measure in BTC, is the more interesting statement. And that volume was not very large lately.

Put another way, with such a change in market behavior, it's hard to tell where the price would be if the market were in an equilibrium state, like it was for a few months this year. My guess is, it would still be lower.

[dree12]

I agree with that. I was just saying, if price rises this much, it's natural that volume in terms of value or currency has risen to some extent. To predict the market state, the relative volume w.r.t. market size, which you can neatly measure in BTC, is the more interesting statement. And that volume was not very large lately.

Put another way, with such a change in market behavior, it's hard to tell where the price would be if the market were in an equilibrium state, like it was for a few months this year. My guess is, it would still be lower.

Ah, I see. You're saying that the actual volume matters little for speculation purposes, because relative volume correlates better with market structure. I tend to agree.

[thepwnorbpwnd]

I can see the stability going to total garbage once 210,000 is hit.