A more in-depth BTC/USD analysis...

[cypherdoc]

Supposedly, BitInstant is doing $100K+ a day.

source?

yeah i highly doubt it. thats nearly all of the average volume on gox

yeah, that'd be $36.5 million a year.

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[DeathAndTaxes]

I don't have any knowledge of if the number is wrong or right but to put it into context FC4B does >$20K per day and BitInstant is a lot larger and older.  Even if inaccurate $100K is certainly a plausible number.  IIRC there was a Forbes article over a year ago which said something (paraphrasing from memory) like "more than $1M a month".  A year is forever in Bitcoin time.  I mean it is over 87,000 blocks.  I think people who assume bitointalk = Bitcoin have no idea how big the system is becoming.  

[jimbobway]

I looked for the source and...cant say.  What DeathAndTaxes said is in the general vicinity.  BitInstant has over a dozen employees now all over the world.

[TraderTimm]

Nice analysis. I don't technically agree with the double-top theory, but I understand why you made that call.

What I think is significant is this - on the first run-up to all time highs, we only spent 4 days and change above 20. (Including up and down through that area.)

We're already beating that record. The longer we meander around here, I think it gives the market new "legs" for 20.00 as a basis. I'm expecting some minor retrace before we go higher, personally.

[bitcoinBull]

There is no double top. A double top has peaks separated by weeks to months.

source

Second Peak: The advance off the lows usually occurs with low volume and meets resistance from the previous high. Resistance from the previous high should be expected. Even after meeting resistance, only the possibility of a Double Top Reversal exists. The pattern still needs to be confirmed. The time period between peaks can vary from a few weeks to many months, with the norm being 1-3 months. While exact peaks are preferable, there is some leeway. Usually a peak within 3% of the previous high is adequate.

...

While the Double Top Reversal formation may seem straightforward, technicians should take proper steps to avoid deceptive Double Top Reversals. The peaks should be separated by about a month. If the peaks are too close, they could just represent normal resistance rather than a lasting change in the supply/demand picture.

Those peaks are on the 1st and 4th of Feb, which is three days. The pattern being formed is pretty clearly a bullish wedge. Not a guarantee that we'll break $21.5/$22, but an indicator that its likely.

[smoothie]

@ OP,

Then we break $22 and head to $25...lol

[solex]

There is no double top. A double top has peaks separated by weeks to months.
...
Those peaks are on the 1st and 4th of Feb, which is three days. The pattern being formed is pretty clearly a bullish wedge. Not a guarantee that we'll break $21.5/$22, but an indicator that its likely.

http://bitcoincharts.com/charts/mtgoxUSD#rg30zigHourlyztgSzm1g10zm2g25zv

There is absolutely a bullish wedge on the hourly chart.
Also, look how fast the retrace is out of the dips. Like a cat on a hot tin roof.
Bitcoin is already putting a floor in at $21...

[ATC777]

There is no double top. A double top has peaks separated by weeks to months.
...
Those peaks are on the 1st and 4th of Feb, which is three days. The pattern being formed is pretty clearly a bullish wedge. Not a guarantee that we'll break $21.5/$22, but an indicator that its likely.

http://bitcoincharts.com/charts/mtgoxUSD#rg30zigHourlyztgSzm1g10zm2g25zv

There is absolutely a bullish wedge on the hourly chart.
Also, look how fast the retrace is out of the dips. Like a cat on a hot tin roof.
Bitcoin is already putting a floor in at $21...

Yep, just waking up and seeing this. I think we've already touched $22.00/BTC.

To me, this is both exciting and disappointing. It's exciting because I'm holding a good bit of BTC in my wallet. It's disappointing because I fear that we might be heading into the "danger zone". A bunch of amateur speculators buying something like crazy rarely ends well. Another Bitcoin bubble and crash could be very bad for the BTC's long-term future.

--ATC--

[jimbobway]

There is no double top. A double top has peaks separated by weeks to months.
...
Those peaks are on the 1st and 4th of Feb, which is three days. The pattern being formed is pretty clearly a bullish wedge. Not a guarantee that we'll break $21.5/$22, but an indicator that its likely.

http://bitcoincharts.com/charts/mtgoxUSD#rg30zigHourlyztgSzm1g10zm2g25zv

There is absolutely a bullish wedge on the hourly chart.
Also, look how fast the retrace is out of the dips. Like a cat on a hot tin roof.
Bitcoin is already putting a floor in at $21...

Yep, just waking up and seeing this. I think we've already touched $22.00/BTC.

To me, this is both exciting and disappointing. It's exciting because I'm holding a good bit of BTC in my wallet. It's disappointing because I fear that we might be heading into the "danger zone". A bunch of amateur speculators buying something like crazy rarely ends well. Another Bitcoin bubble and crash could be very bad for the BTC's long-term future.

--ATC--

It is also possible you are sad because u waited to load up at $16 waiting for the drop.  Shrug.

[ATC777]

It is also possible you are sad because u waited to load up at $16 waiting for the drop.  Shrug.

That's the other half of it -- didn't you read the OP!?

[solex]

Another Bitcoin bubble and crash could be very bad for the BTC's long-term future.

--ATC--

I hear you but I still do not think this is a typical bubble. The spike in 2011 was, especially as the market was immature, with much smaller bitcoin issuance, therefore it was harder for the market to establish a stable consensus valuation.

I am looking at the current fundamentals as well as technicals and see strong fundamentals underpinning the recent enthusiasm driving price.

Check out the 1 year daily price chart, and yes it seems there could well be a very short dip back to $17 from the current level. Note also it is on a doubling trend from $5.50 a year ago, to $11 six months ago, to $22 today...

http://bitcoincharts.com/charts/mtgoxUSD#rg360zigDailyztgSzm1g10zm2g25zv

But then check out the actual bitcoin usage (logarithmic 7-day SMA of USD equivalent volume) over the same year...

https://blockchain.info/charts/estimated-transaction-volume-usd?showDataPoints=false&timespan=&show_header=true&daysAverageString=7&scale=1&address=

This is very similar to the price chart! Even the peak in late Aug 2012 is represented. The price spike in the last month mirrors the major uptick in bitcoin usage across the internet.

A downtrend may only materialize when the usage of bitcoin takes a hit (perhaps because of some as yet unforeseen external factor) which could be months away.

[cypherdoc]

Another Bitcoin bubble and crash could be very bad for the BTC's long-term future.

I think it's inevitable (I'm not suggesting we are or are not currently in a bubble). I think each time the "fallout" will have less impact.

of course we're going to get a pullback at some point but i strongly disagree with the characterization that it could be "very bad for the BTC's long-term future".  all it will be is trading volatility.

[ATC777]

of course we're going to get a pullback at some point but i strongly disagree with the characterization that it could be "very bad for the BTC's long-term future".  all it will be is trading volatility.

No, I'm saying a well-behaved correction would be a good thing for BTC/USD. I said that another huge parabolic move / bubble (and the ensuing breakdown) would be bad for BTC/USD. We don't want another repeat of 2011. It would make a lot of people start to worry that Bitcoin is just a speculators toy and seriously undermine the stability (and utility) of the currency. Remember, Bitcoin was designed for gradual, long-term deflation. It wasn't made to be a high-performance trading vehicle for savvy day traders to pwn its users. If that's what it turns into I'll be happy to make money off of it but it will raise a lot of questions about the stability of the Bitconomy.

Regards,

--ATC--

[Spaceman_Spiff]

of course we're going to get a pullback at some point but i strongly disagree with the characterization that it could be "very bad for the BTC's long-term future".  all it will be is trading volatility.

No, I'm saying a well-behaved correction would be a good thing for BTC/USD. I said that another huge parabolic move / bubble (and the ensuing breakdown) would be bad for BTC/USD. We don't want another repeat of 2011. It would make a lot of people start to worry that Bitcoin is just a speculators toy and seriously undermine the stability (and utility) of the currency. Remember, Bitcoin was designed for gradual, long-term deflation. It wasn't made to be a high-performance trading vehicle for savvy day traders to pwn its users. If that's what it turns into I'll be happy to make money off of it but it will raise a lot of questions about the stability of the Bitconomy.

Regards,

--ATC--

I agree that price stability would be good for merchants and commerce, and would increase more adoption, but as this adoption will increase the price, you see this is not a stable system yet.
Gradual long-term (price) deflation only happens when bitcoin is already fully adopted.  Right now the inflows and outflows are just too big to allow for a stable currency.  Given the tiny spot that bitcoin occupies in the currency space, it will remain quite volatile for some time to come (although volatility should improve somewhat).

[TangibleCryptography]

of course we're going to get a pullback at some point but i strongly disagree with the characterization that it could be "very bad for the BTC's long-term future".  all it will be is trading volatility.

No, I'm saying a well-behaved correction would be a good thing for BTC/USD. I said that another huge parabolic move / bubble (and the ensuing breakdown) would be bad for BTC/USD. We don't want another repeat of 2011. It would make a lot of people start to worry that Bitcoin is just a speculators toy and seriously undermine the stability (and utility) of the currency. Remember, Bitcoin was designed for gradual, long-term deflation. It wasn't made to be a high-performance trading vehicle for savvy day traders to pwn its users. If that's what it turns into I'll be happy to make money off of it but it will raise a lot of questions about the stability of the Bitconomy.

Regards,

--ATC--

Anything with liquidity will attract day traders.  If that dooms BTC then it will doom everything else (including USD which has Forex trade volume about 20x the value of entire global economy).  Even if you did things like made a crypto currency which batch processed transactions daily (ACH Coin) exchanges don't directly use the blockchain so they can (and will) always provide near instant liquidity.  The only thing which will stabilize exchange rates is more (not less) market depth and most of that comes from speculators. 

[sublime5447]

There is no double top. A double top has peaks separated by weeks to months.
...
Those peaks are on the 1st and 4th of Feb, which is three days. The pattern being formed is pretty clearly a bullish wedge. Not a guarantee that we'll break $21.5/$22, but an indicator that its likely.

http://bitcoincharts.com/charts/mtgoxUSD#rg30zigHourlyztgSzm1g10zm2g25zv

There is absolutely a bullish wedge on the hourly chart.
Also, look how fast the retrace is out of the dips. Like a cat on a hot tin roof.
Bitcoin is already putting a floor in at $21...

Yep, just waking up and seeing this. I think we've already touched $22.00/BTC.

To me, this is both exciting and disappointing. It's exciting because I'm holding a good bit of BTC in my wallet. It's disappointing because I fear that we might be heading into the "danger zone". A bunch of amateur speculators buying something like crazy rarely ends well. Another Bitcoin bubble and crash could be very bad for the BTC's long-term future.

--ATC--

Very surprised by your analyses, I think we might be in complete agreement. I am very bearish btc right now. I was getting bearish at 19. 

[ATC777]

I think some are misunderstanding (to some degree) what I'm saying...

Speculation and day trading are indeed a vital part of any market, including Bitcoin. We need lots of speculative money and lots of day traders. These are good things. Day traders provide tremendous liquidity to markets, and speculative money increases the depth of the market. What I'm saying is that a tremendous, parabolic move in BTC/USD followed by another crash is going to seriously undermine the stability of Bitconomy. We don't want another sprint to $30 or beyond followed by a crash... that'd be bad news. I want to see the natural ebb and flow of the market, and a climbing exchange rate. And I want to see new adopters and new users and a growing Bitcoin economy. :-)

Regards,

--ATC--

[DeathAndTaxes]

We don't want another sprint to $30 or beyond followed by a crash... that'd be bad news.

Why?  

Still even if you are right and it bad to have crashes, it is all but guaranteed we will see many (probably a dozen or more) giant crashes (30%, 40%, even 50%+) on the way to higher and higher money supply valuation.  So it is all but guaranteed to be .... "bad" (your definition).

[Spaceman_Spiff]

What I'm saying is that a tremendous, parabolic move in BTC/USD followed by another crash is going to seriously undermine the stability of Bitconomy. We don't want another sprint to $30 or beyond followed by a crash... that'd be bad news. I want to see the natural ebb and flow of the market.

I think parabolic moves up and crashes are the natural ebb and flow of tiny markets, though I am not an expert.

[solex]

I think parabolic moves up and crashes are the natural ebb and flow of tiny markets, though I am not an expert.

Correct. And as the market gets bigger and bitcoin usage matures then the spikes and crashes will diminish in amplitude.
There was a 90+% crash in 2011. The next crash may be "just" 50%, then after that perhaps 30% etc.

Even the yen and euro can easily rise or fall 1% in a day, and these are 10,000 times bigger than bitcoin.