Where do you think we are in the bubble?

[proudhon]

So, anyway, seems pretty obvious.  We're in the bull trap/return to normal area.

[Luno]

Are we going to get a Super Bowl dip tonight?

[Vladimir]

So, anyway, seems pretty obvious.  We're in the bull trap/return to normal area.

I'd say it is the very beginning of the stealth phase and the "take off" has not yet happened.

The argument for this claim is rather simple. Institutional investors have not even dipped their feet into Bitcoin. Do not mix "media attention" to Bitcoin as investment to "media attention" to Bitcoin as a fringe technological and monetary curiosity. Some especially smart and reckless VC's have just started to push some pitiful amounts of money into Bitcoin economy which is by definition "stealth phase".

Therefore, if we accept the wisdom of the classic chart above we are in smart money/stealth phase.

[evolve]

Could we be seeing the "Bull Trap" now? (jan 2013 dip)

In the very long run, the $32 peak is "first sell off", and the $2 dip is the "bear trap". Many early adoptors left because of the bear trap (e.g. the "Bitcoin will never reach $20 again") . We are stilling recovering from the bear trap, not even have any real media attention

$32 was "the new paradigm", $2 was "dispair", $5 was return to the mean. We are now seeing a repeat of the same pattern.

[evolve]

Do you really compare every commodity or stock chart to that schematic?  For christ sake, it's a nice consensus for human emotions at various moments, but reality is quite a bit more complex than this....   I can only imagine how often you would have thought that we were in a bull trap in the earlier phases of apple (not that I am an apple fan).

Uhh, no? But when the BTC chart mirrors the sentiment chart almost perfectly in the past (seriously, the first bubble is almost a carbon copy), and the pattern starts to repeat itself (as it is starting to now) the chart is more than fitting.

I actually hold AAPL, and yes, I believe it is in a bubble now as well (one on the vegre of collapse IMO).  However, I bought it during the 08 crash, so even if the stock collapses I can still sell for a profit, though obviously I would prefer a recovery.  

So, anyway, seems pretty obvious.  We're in the bull trap/return to normal area.

I agree.

[Luno]

$32 was a black swan, an external event that made Bitcoin look unsafe for a store of value. There would have been a natural first top followed by a decline and a recovery.

The timing of  $32 as a peak was premature and set everything back a year. What we are seeing now is a reenactment of the public mania phase. where we are exactly on this leg is hard to say.

[piramida]

$32 was "the new paradigm", $2 was "dispair", $5 was return to the mean. We are now seeing a repeat of the same pattern.

You conveniently ignore the fact that on this chart above "despair" is quite below "first sell off", while on the real chart we never went below "first sellof" which was at $1.1 - so no, not even remotely similar, unless you want to see things which aren't there.

[evolve]

If you think that the first bubble and the chart aren't "even remotely similar", than you are obviously blind, delusional, or just lying to yourself.  Its that lack of awareness that's going to leave you holding the bag by buying at the top of this bubble, just like those fools that bought at $32.

[jl2012]

If you think that the first bubble and the chart aren't "even remotely similar", than you are obviously blind, delusional, or just lying to yourself.  Its that lack of awareness that's going to leave you holding the bag by buying at the top of this bubble, just like those fools that bought at $32.

It's just like a fractal. The pattern will repeat itself in different scale. In short-term (1-2 year), the first bubble was a full cycle. In medium-term (3-5 year), it was just a bear trap. In long-term (6-10 year), it was just a glitch in the take off period.

[Spaceman_Spiff]

$32 was "the new paradigm", $2 was "dispair", $5 was return to the mean. We are now seeing a repeat of the same pattern.

I agree with you on these points, but where exactly do you see "first sell off" in the first bubble?   Or the "return to normal"?  Imho, any point you pick for these are quite arbitrary. 

So, anyway, seems pretty obvious.  We're in the bull trap/return to normal area.

I agree.

How are we in the bull trap/return to normal area if we haven't even had a significant sell-off in the new "bubble" ?  Don't get me wrong, I think we will get another decent sell-off, and we have risen quite a bit, but I don't think we are there yet.

It's just like a fractal. The pattern will repeat itself in different scale. In short-term (1-2 year), the first bubble was a full cycle. In medium-term (3-5 year), it was just a bear trap. In long-term (6-10 year), it was just a glitch in the take off period.

+1, although the fundamentals need to stay good for this to happen of course.

[evolve]

I agree with you on these points, but where exactly do you see "first sell off" in the first bubble?   Or the "return to normal"?  Imho, any point you pick for these are quite arbitrary.  

Zoom in on the 2011 bubble. First selloff; mid/end may, Return to normal; mid june.  

How are we in the bull trap/return to normal area if we haven't even had a significant sell-off in the new "bubble" ?  Don't get me wrong, I think we will get another decent sell-off, and we have risen quite a bit, but I don't think we are there yet.

Jan 31 - Feb 2 was a pretty significant selloff, around 3 and a half dollars (setting the "denial" phase).




Pulling back, I think we may now be bordering on the "fear" stage.  If my suspicions are correct, it will be an interesting couple of months....



*chart updates automatically

[lebing]

$32 was "the new paradigm", $2 was "dispair", $5 was return to the mean. We are now seeing a repeat of the same pattern.

I know you are illustrating the point corresponding to that chart, but saying that $32 was the new paradigm is a bit of a joke. That entire bubble only lasted a few days.

Right now, based on that chart, I would say that we are in the media attention phase of growth (though in the case of bitcoin a more accurate description would be "appropriate merchant adoption").

[ElectricMucus]

To pot this in perspective here is a long time silver chart.


If any silver is the best comparison since it's volitale price range, commodity function and finite base.

[ElectricMucus]

Bubble should start tomorrow.

[deeplink]

Bubble should start tomorrow.

Link?

[ElectricMucus]

Bubble should start tomorrow.

Link?

It's just intuition honestly. I'm not certain of it but I think 20% should be possible in a day.

[thoughtfan]

Bubble should start tomorrow.

On a Saturday without any new money on MtGox to fuel it? Just askin

[ElectricMucus]

Bubble should start tomorrow.

On a Saturday without any new money on MtGox to fuel it? Just askin

See all those buy orders? They will panic which starts the bubble.

[thoughtfan]

Bubble should start tomorrow.

On a Saturday without any new money on MtGox to fuel it? Just askin

See all those buy orders? They will panic which starts the bubble.

I know there's a lot of ask orders hoping the price will drop so they can get (back) in.  However I fail to see what could trigger a panic buy if there's no lumps of new money happy to pay current price and start the push up.  On the other hand I still think there's quite a lot more on the ask side than shows.  Most of the big dumps that cause dips or temporarily halt the upward trend come from off-book.  They tend not to show their hand until they're ready to play.  That's my take anyway.

[ElectricMucus]

Bubble should start tomorrow.

On a Saturday without any new money on MtGox to fuel it? Just askin

See all those buy orders? They will panic which starts the bubble.

I know there's a lot of ask orders hoping the price will drop so they can get (back) in.  However I fail to see what could trigger a panic buy if there's no lumps of new money happy to pay current price and start the push up.  On the other hand I still think there's quite a lot more on the ask side than shows.  Most of the big dumps that cause dips or temporarily halt the upward trend come from off-book.  They tend not to show their hand until they're ready to play.  That's my take anyway.

Simple, people removing their asks.
A bubble is not created by additional demand but by skewing of the existing demand. That's also why they pop because after the bids run into the remaining asks after the peak the removed asks run into the remaining bids.

Again I may be wrong that it starts now, but I am certain that this behavior occurs when we have our bubble.