bitcoins accumulation is at an all time high

[adamstgBit]

http://youtu.be/WPYY1kxQ9Wg?t=24m45s

It seems obvious that bitcoins are being accumulated at an unprecedented rate.
bitcoins accumulation is at an all time high

so why isn't the price moving up?

is the system hacked? and we have fake coins running around ( maybe mtgox uses fake coins within their system to trade with )

or maybe we simply seeing a bad move by early adopters, they are selling off at the worst possible time?

[Stephen Gornick]

It seems obvious that bitcoins are being accumulated at an unprecedented rate.
so why isn't the price moving up?

There's currently 7,200 BTC issued per day.  With just under 10.4 million issued to-date, that means the currency is inflating at the rate of more than 25% on an annual basis.

If that were a fiat currency that would be considered nearing levels that cause hyperinflation.   With bitcoin, the demand is such that even that currency inflation level isn't too much at this price (including knowledge that in just a matter of days that currency inflation rate will drop by half to about a 12.5% rate, again on an annual basis.)

But the exchange rate is up ... 133% in 2012.

( maybe mtgox uses fake coins within their system to trade with )

They say they hold 100% of customer deposits, as does most every other exchange.  But there's no third party audits so we can never be positive.

That's why exchanges and other hosted (shared) EWallets should not be where large amounts of coins should be parked, except when needed for trading.

[evoorhees]

Stephen Gornick... you're so smart 

[FreeMoney]

What is this crap?

Every time a bitcoin is 'accumulated' it is also 'un-accumulated'. So, I guess we'll wait for the "OMG, coins are being un-accumulated at an all time high. Why isn't the price tanking??" thread to cancel it out?

Extra coins magically appearing? Come on. Maybe you haven't heard that all transactions are public?

[smoothie]

@OP I think that graph of accumulation is showing how the accumulation has been slowing even though it has risen price did rise.

Perhaps an unaccumulation to come?

[GeoRW]

price depends on demand as well; after so many scams, mostly only hardcore bitcoiners (and SL drug users) are buying more coins at these price levels

[adamstgBit]

if you were trading during 7.20 you remeber how support was very strong and we hit the 7.20 wall many time b4 finaly giving in to the downward pressur

a lot of distribution happened then, and at 5 accumulation started to kick in



 

[smoothie]

price depends on demand as well; after so many scams, mostly only hardcore bitcoiners (and SL drug users) are buying more coins at these price levels

Price dip coming to an exchange near you? lol 

[molecular]

http://youtu.be/WPYY1kxQ9Wg?t=24m45s

It seems obvious that bitcoins are being accumulated at an unprecedented rate.
bitcoins accumulation is at an all time high

so why isn't the price moving up?

is the system hacked? and we have fake coins running around ( maybe mtgox uses fake coins within their system to trade with )

or maybe we simply seeing a bad move by early adopters, they are selling off at the worst possible time?

I transcribed the technical analysis part of what brother john said and added nice graphics, before you posted this ;>

https://bitcointalk.org/index.php?topic=123855.0 "BrotherJohnF with interesting technical analysis and prediction"

I'll just crosspost it here

[molecular]

What is this crap?

Every time a bitcoin is 'accumulated' it is also 'un-accumulated'. So, I guess we'll wait for the "OMG, coins are being un-accumulated at an all time high. Why isn't the price tanking??" thread to cancel it out?

Extra coins magically appearing? Come on. Maybe you haven't heard that all transactions are public?

can anyone explain how the "Accumulation / Distribution Index" indicator actually works?

I asked Brother John F about in on his bitcoin forum, maybe he'll explain it. But I'm sure there's equally knowledgeable people here that can explain it. I fail to see how this Indicator can "know" wether the coins are spread out to many or accumulated by a few.

[molecular]

This is crosspost of OP of another thread about this (https://bitcointalk.org/index.php?topic=123855.0)

Hey guys. I've reported on BrotherJohnF (youtube silver analyst, one could call him), who has recently reactivated his BitcoinChannel on youtube and also now setup a related blog and forum published in his latest Bitcoin Report Video a very interesting technical analysis using the Accumulation/Distribution Indicator.

I took the time to transcribe the relevant parts of the 25 minute video. BrotherJohn shows the bitcoincharts roughly as follows while explaining things and I'll insert [] info on what he points to at the relevant places (emphasis mine for easier speed-reading)

This is the Bitcoin Chart from bitcoincharts.com. I'm going to spend some time in this Episode to talk about Bitcoin seignorage but before we get to that I wanna do some technical analysis on the chart.

This is the lifetime chart of Bitcoin. You can see we started off at infinitesimal.. one cent or so and the runup to 30 plus, so that is a 3000-fold gain. It's still a spectacular gain, we're still at a thousand plus gain on the Bitcoin, so that's a very very large gain for the early adopters.

Now the question is going to become very important: how much accumulation and distribution has gone on since the early adopters came on and I think you'll see when we look down below it's actually been quite a bit.

The first indicator we have below here is the Volume. You can see this volume spike here [points to mid-November 2011 spike] of nearly 400,000 Bitcoins; that's going to be the equivalent of 4 Million Dollars at current prices or roughly a quarter of the market cap - I'm not sure what it is, the total is going to be 21 million, I think we're about halfway there. So neraly half the market cap turned over, and not nearly as much turned over when we had this big smack-down [points to 2011 crash] from the 32 price all the way down to the 2.50 dollars.

So there's a lot of volume that has come in, I will call this "accumulation". This is new buyers and a diversified base of new buyers coming in. The same sort of thing is happening recently.

Now you can see that on the next indicator: This is the "Accumulation Distribution Index". So you can see that this downtrend here [points to post-bubble downtrend], very very long downtrend from 32 down to 3, a good 90% decline in the price was accompanied by this decline [points to same timeframe on Acc/Dist Index indicator] in Accumulation and Distribution. So there was a large distribution at this point and then began the Accumulation with this gigantic buy spike [points to the 400K spike again].

Now what's interesting about this now is that you can see here at about May or so [points to May 2012 on Acc/dist index], actually June, we had a breakout in new highs in Accumulation. That did not at all correspond with a breakout into new prices [points to only slight increase in May/June 2012 on price chart], you can see new price highs were far far from them at around 6 or so with the accumulation breaking out.

So what does that mean, you can see we're kind of levelling off here [points to July through now on Acc/Dist indicator] at a very very high level of accumulation. It can mean a couple of things. The first thing is that the distribution of the base of the people who are accumulating Bitcoin is becoming much much broader and that may very well be the case. Or it can be the case as some have speculated and we will see that when we look at the story from teodesian that perhaps bitcoin has been infiltrated and it is being sold off on a slow rate. Now I've contended for a long time that if the Bitcoin is hacked, then the price will collapse to zero. That's not necessarily the case if it were hacked by a very very intelligent group of people. They could dilute the price over a period of time as the base grows. So this anomaly could be pointing to that. If this anomaly does not resolve itself either in a large crash in this chart [points to Acc/Dist chart] or a very large breakout in this chart [point to price chart] then tedesians theory may be true.

 

He then discusses Bitcoin seignorage and that weird teodesian article called "a hologram of a cryptocurrency". (question: is teodesian == molyneux?)

and says towards at end of the vid:

we are not seeing a price rise, we are seeing a rolling over here. But the last chart is very important and that's going to be the MACD and you can see we're actually negative and turn positive [points to current time on MACD indicator]. So this is going to be the first time since about this time here [point to price chart at mid February 2012] around 5 when we've crossed from negative into positive [points to MACD]. So if all this holds and if the bitcoin story is true and if Teodesian is wrong and the Bitcoin isn't the "hologram of a cryptocurrency" but is actually a true cryptocurrency then we will expect to see fairly soon a breakout into this price and a rise above 15 dollars.

And we'll talk to you next time.

So what do you guys think? Bitcoin silently hacked OR bitcoin > $15 soon ;>

[molecular]

what I don't understand:

So there's a lot of volume that has come in, I will call this "accumulation". This is new buyers and a diversified base of new buyers coming in. The same sort of thing is happening recently.

There's a lot of volume. So? Buying equals selling, no? How to deduct it's accumulation? What is accumulation? How to derive that it's "new buyers" and "diversified base of new buyers"?

[lucif]

You are talking about price positive divergence with one of technicial indicator (A/D). Its true, but there are a lot of other TI's, this divergence should be confirmed in other TI's

The more relevant to topic subject is Bitcoin days destroyed graph

http://blockchain.info/charts/bitcoin-days-destroyed-cumulative

[Foxpup]

can anyone explain how the "Accumulation / Distribution Index" indicator actually works?

Wikipedia can.

Basically, if the price is going up, there is accumulation in proportion to the trade volume. If the price is going down, there's distribution in proportion to trade volume. The actual magnitude of the price increase/decrease is inconsequential. Increasing accumulation simply means that there's more volume when prices are rising than when prices are falling. The theory behind the name is that the price increases when there's excess demand (people are trying to accumulate) and decreases when there's excess supply (people are trying to distribute). That's all. It only indicates demand, it doesn't say anything about where that demand is coming from, whether it's from new buyers, or whatever.

[naima53]

I've heard (half a year ago) from a secret informant that the coins are forged, I do not believe in it. But this leads to bad thoughts. When I hear it a second time  

[adamstgBit]

if you look at A/D for other bitcoin markets, its interesting

bitc-china is especially interesting



it would appear they are in a distributive state.

[molecular]

You are talking about price positive divergence with one of technicial indicator (A/D). Its true, but there are a lot of other TI's, this divergence should be confirmed in other TI's

The more relevant to topic subject is Bitcoin days destroyed graph

http://blockchain.info/charts/bitcoin-days-destroyed-cumulative

yes. and this one: http://statistics.ecdsa.org/

[Ichthyo]

can anyone explain how the "Accumulation / Distribution Index" indicator actually works?

Wikipedia can.

Basically, if the price is going up, there is accumulation in proportion to the trade volume. If the price is going down, there's distribution in proportion to trade volume. ....

This is true. Actually, I'd prefer to put it even more simlistic. Accumulation/Distribution measures, if you "make it out" rather to the upper end or to the lower end of each day's rate span. So, if someone dumps but the rest of the market sucks that in and drives the rate up again, then this event counts as positive (accumulation) on this scale. (Actually, the values are weighted by volume and summed up).

I'd prefer to keep it thus simplistic, because everything else is already interpretation. Even the terms "accumulation" and "distribution" imply some interpretation, which seems roughly sensible, but still remains an interpretation.


Another interesting aspect is that many of those TA indicators work based on trading periods, which are usually just days. In a 24/7 market like bitcoin, without nights and weekends, imposing such periods has always something arbitrary. For the curious ones: just use bitcoincharts and watch e.g. how the Negative Volume Indicator chart or even the Accummlation/Distribution chart changes when you use different accounting periods (day, hour, 15minute, 5 minutes).

In a classical, physical, localised market, a "trading day" was indeed a very tangible thing, and there was such a thing like a prevailing sentiment amongst all those people trading within a single room. And we shouldn't forget that the roots of many of the "classical" indicators are in this classical stock market setup.

[S3052]

can anyone explain how the "Accumulation / Distribution Index" indicator actually works?

Wikipedia can.

Basically, if the price is going up, there is accumulation in proportion to the trade volume. If the price is going down, there's distribution in proportion to trade volume. ....

This is true. Actually, I'd prefer to put it even more simlistic. Accumulation/Distribution measures, if you "make it out" rather to the upper end or to the lower end of each day's rate span. So, if someone dumps but the rest of the market sucks that in and drives the rate up again, then this event counts as positive (accumulation) on this scale. (Actually, the values are weighted by volume and summed up).

I'd prefer to keep it thus simplistic, because everything else is already interpretation. Even the terms "accumulation" and "distribution" imply some interpretation, which seems roughly sensible, but still remains an interpretation.


Another interesting aspect is that many of those TA indicators work based on trading periods, which are usually just days. In a 24/7 market like bitcoin, without nights and weekends, imposing such periods has always something arbitrary. For the curious ones: just use bitcoincharts and watch e.g. how the Negative Volume Indicator chart or even the Accummlation/Distribution chart changes when you use different accounting periods (day, hour, 15minute, 5 minutes).

In a classical, physical, localised market, a "trading day" was indeed a very tangible thing, and there was such a thing like a prevailing sentiment amongst all those people trading within a single room. And we shouldn't forget that the roots of many of the "classical" indicators are in this classical stock market setup.

trading day or not, the indicators are all still valid.

whatever the time frame is, it averages out those effects.

[Ichthyo]

Another interesting aspect is that many of those TA indicators work based on trading periods, which are usually just days. In a 24/7 market like bitcoin, without nights and weekends, imposing such periods has always something arbitrary.

trading day or not, the indicators are all still valid.
whatever the time frame is, it averages out those effects.

...not really, only if the integrated indicator is linear.

Classical example: Negative Volume Index can be drastically different when using another accounting interval.


Bottom line, don't use any indicator at "face value". If something is called "accumulation" this doesn't mean it measures accumulation.