Bitcoin in RALLY mode

[Anonymous]

Guys, why do you buy bitcoins at such high prices? The rate may still fall down and it can bring great losses.

Some people want to use them immediatley for transactions to buy goods?

[LZ]

Yeah, this may be the cause.

[alkor]

Guys, why do you buy bitcoins at such high prices? The rate may still fall down and it can bring great losses.

Given that bitcoin just hit the front page of digg, I would actually expect the value to increase further at least in the short-term as there will be an influx of curious new users.

[Nefario]

Guys, why do you buy bitcoins at such high prices? The rate may still fall down and it can bring great losses.

Given that bitcoin just hit the front page of digg, I would actually expect the value to increase further at least in the short-term as there will be an influx of curious new users.

It is a numbers game, x number of people are exposed to bitcoins idea and website, half of those install tthe client, maybe one tenth will buy a few bitcoins, and of those maybe only a few will stay. The more exposure the better. It will all result in more people using bitcoin and an increase in price.

[ribuck]

Guys, why do you buy bitcoins at such high prices?

1. Some people want to trade, and don't have a GPU card, so they have no easy way to get BTC except by buying.

2. Some people are preparing to start up new BTC-based businesses, and need to build up a stock of BTC as their working capital.

3. Some people are speculating.

The rate may still fall down and it can bring great losses.

Absolutely. No-one should buy BTC unless they are comfortable with the chance of losing everything.

[FreeMoney]

Absolutely. No-one should buy BTC unless they are comfortable with the chance of losing everything.

I completely agree. And this goes for buying Euro, USD, and cocaine too.

[slush]

At least from a market analysis standpoint, this does not make sense at all. 0.5 is really not a strong barrier. It's purely psychological.

Any barriers (at least in Bitcoin market) are purely psychological. There was no fundamental reason for resistance at 0.3 or 0.4, there was no fundamental reason for support at 0.2. With resistance at 0.5 or even at 1 BTC/USD it will be the same - people just *think* that price is too high, which creates the resistance.

[S3052]

At least from a market analysis standpoint, this does not make sense at all. 0.5 is really not a strong barrier. It's purely psychological.

Any barriers (at least in Bitcoin market) are purely psychological. There was no fundamental reason for resistance at 0.3 or 0.4, there was no fundamental reason for support at 0.2. With resistance at 0.5 or even at 1 BTC/USD it will be the same - people just *think* that price is too high, which creates the resistance.

I think we are overall on the same page.

Summarizing what has been said here would look as follows:

1. Whenever there are no longterm price histories (which applies for bitcoins), all barriers are at first only psychological. This is particularly true at new all time highs, because there is no former top.

2. Once prices corrected from a previous top, on top of that psychological barrier, a more technical barrier forms. The strength of this barrier depends on many factors. One of them is the volume pattern.

Example:
If a lot of volume is traded at a certain price range, then this barrier becomes strong resistance or support.
This is what happened in the 0.3 - 0.35 area. A lot of people bought and sold in this range at the November peak. And, a lot of sell orders were placed again in December in this area. Hence, it took quite some time to clear this level again.

In contrast, the 0.4 level was cleared much faster, because there was not a lot of trading in this price range around the November peak.
Even less volume was traded around 0.5. This is why this level could be a smaller barrier.

At the same time, this is pure speculation. You can also make the case that 0.5 is a "nicer" and "rounder" number than 0.3 and 0.4 and many people want to sell in this range.

We will see what happens. The market will tell us and we will stay close to it.

[slush]

Guys, why do you buy bitcoins at such high prices?

*such high* term is very relative. When I come to bitcoin, prices were at 0.25. I was just curious and bought my first bitcoins for 100USD at this rate. And people asked me the same question - why are you buying at *such high* prices? :-D

I'd like to say that *such high/low* is only in your head. When price will be at parity, people will be surprised why somebody sold his all time bitcoin savings for 0.5. Similar situation can happen in case of bitcoin crash (big security issue, ...) - now people *think* 0.1 is too low to sell, but once price will be at 0.08 already, anybody will sell on 0.1 price.

[S3052]

Even during this weekend, the rally goes on.

We are already at 0.48 $.

One can even wonder what happens if some bigger players not only put 5k, 10k into bitcoins but 100k, 1 million. I would not be surprised if some hegdefunds would do that.

Of course this is pure speculation, but you never know.

Anyway this is a healthy rally. and I agree, it might be that some people wonder why they sold them at 0.48 or 0.50, etc. when prices are at 1$, 10$, 100$ per bitcoin (and vice versa as slush has written above)

[markm]

Hi! First post.

I came across BitCoin somewhat serendipitously in the course of working on (IRC, eggdrop, TCL) trading bots for Galactic Milieu ( http://sourceforge.net/p/galacticmilieu/home/ ).

I was mostly looking for things like Open Transaction, since I wanted client (player's agent) bots to sit around trading "arbitrary" things in galaxies where one planet's local currency might be of little interest on another planet, especially in a galaxy far far away, but where actual tangible things, or even useful information such as how to build ships that can travel faster than light typically does, might well have value far away if ever it somehow managed to get there.

Part of the "game" with these bots is supposed to be the whole "problem" of why anyone anywhere would think your possibly puny planet's local currency has any value whatsoever, let alone bother buying any of it using anything actually useful to them such as ton-light-months of transportation or quantities of fuel usable to generate ton-light-months of transportation or ice cream cones or face paint (or even blue mud specially formulated for rubbing on your belly).

I have been wondering about a specific tactic or strategy that, when reading this thread, I find myself thinking could in theory maybe "explain" some of the things this thread mentions.

Basically as long as transaction fees are low or zero, and accounts buying and selling can be anonymous, couldn't people interested in creating and maintaining a perception that their national currency (hello, BitCoiner nation! Why aren't you featured in Freeciv as a nation yet? Is the Galactic Ruleset going to have to start adding in nations itself due to some problem of getting a BitCoiner nation accepting into mainline/default Freeciv? But I digress...) has value buy it and sell it back and forth between accounts of their own at ever higher values, only ever actually releasing some to outsiders at higher price than they buy it back from outsiders?

I kind of envisioned some nations deliberately buying and selling their own currency among their own sock-puppets constantly deliberately to create high volumes at high prices precisely for the purpose of convincing speculators that there is money to be made with that currency...

It seems to me it could be interesting to somehow estimate (or would that be guestimate) how many of the dollars seemingly being spent to seemingly buy BitCoins is actually coming from real people who really had no bitcoins previously compared to how much is coming from people buying their own BitCoins from themselves.

Might it seem useful to at least some miners to buy from themselves some of the early bitcoins they created by mining, precisely for the purpose of creating an appearance of the saleablilty of BitCoins, but refraining from buying other people's BitCoins since they are not actually trying to spend dollars they are trying to keep the dollars themselves whilst making it look like people are parting with dollars?

-MarkM-

[MoonShadow]

Hi! First post.

Whatever you are on, I want some.

[jimbobway]

Might it seem useful to at least some miners to buy from themselves some of the early bitcoins they created by mining, precisely for the purpose of creating an appearance of the saleablilty of BitCoins, but refraining from buying other people's BitCoins since they are not actually trying to spend dollars they are trying to keep the dollars themselves whilst making it look like people are parting with dollars?

Yes, this is possible.

[FreeMoney]

Might it seem useful to at least some miners to buy from themselves some of the early bitcoins they created by mining, precisely for the purpose of creating an appearance of the saleablilty of BitCoins, but refraining from buying other people's BitCoins since they are not actually trying to spend dollars they are trying to keep the dollars themselves whilst making it look like people are parting with dollars?

Yes, this is possible.

I just bought a deck of cards (standard 52 card pack) for $45 (from myself, not that it matters). Anyone want it for $30? No? you don't make purchase decisions based on other people's previous trades? Pretty clever.

All that matters are currently available offers to buy and sell. Those can be 'faked' only as long as someone has USD to part with to waste on paying more than necessary.

[ribuck]

MtGox price just shot up to 95 cents (due to a very small volume of coins on offer and, I presume, a determined buyer). We live in interesting times.

[ShadowOfHarbringer]

There seems to be a new resistance forming at 0.7.
Volumes stays high.

[Babylon]

There seems to be a new resistance forming at 0.7.
Volumes stays high.

Personally I put my money where my mouth is over on bitcoin sportsbook, I fully expect this rally to continue.

[kiba]

The resistance at 0.7 collapsed. Now, we have to overcome 0.75 before moving on.

[Babylon]

Guys, why do you buy bitcoins at such high prices? The rate may still fall down and it can bring great losses.

Some people want to use them immediatley for transactions to buy goods?

yeah, possibly people had auction orders to pay for and had to buy coins fast.

I don't think there are that many auctions though.

[sturle]

The resistance at 0.7 collapsed. Now, we have to overcome 0.75 before moving on.

Support for the current level is very thin.  All bids combined above 0.66 amount to less than USD 1000, and the order book is thin and full of holes all the way down to 0.56.  At the same time sellers have been very busy fillng in ask orders.  The picture looks very much like it did before the correction from 0.5 to 0.30, just at a higher level.