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Author Topic: Supply and Demand - Simple question to a chart  (Read 2163 times)
Luigi
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February 06, 2013, 10:00:55 PM
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Hi,

not paying any attention to bitcoins lately, I know realize how its marketprice has risen since november or mid january. Trying to understand this I looked at this graph:

http://www.bitcoinx.com/charts1/depth_mtgox.png

and I find myself with two questions:

Do I interpret correctly that the red chart reflects the amount of BTCs people ask for / would like to buy? If that is so, why does BTC price rice with declining demand? Or am I indeed confusing ask and bid sum here?
Why do the graphs seem to have a synchronized or even an axially symmetric signal/part to their trends?

Thank you
Luigi
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xxjs
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February 07, 2013, 02:01:00 AM
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Supply and demand should be expressed in how many at what price. It does not help if the supply is thousands of BTC at USD30/BTC, when there is no demand at that price.

These graphs are most useful around the eqilibrium. Too far off that point, it does not express real demand or supply. It is too easy to put up a big order, and it is also easy to cancel the order when the actual sales price comes close.
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February 07, 2013, 02:18:46 AM
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You've got the bid and ask mixed up. The "ask" is what people want to sell (they "ask" for a particular price for the coins they're selling) and the "bid" is what people want to buy (they "bid" a particular price for the coins they want).

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
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February 07, 2013, 02:28:45 AM
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Hi,

not paying any attention to bitcoins lately, I know realize how its marketprice has risen since november or mid january. Trying to understand this I looked at this graph:

http://www.bitcoinx.com/charts1/depth_mtgox.png

and I find myself with two questions:

Do I interpret correctly that the red chart reflects the amount of BTCs people ask for / would like to buy? If that is so, why does BTC price rice with declining demand? Or am I indeed confusing ask and bid sum here?
Why do the graphs seem to have a synchronized or even an axially symmetric signal/part to their trends?

Thank you
Luigi

Red is asks... in other words, what people with bitcoins are asking in exchange for them.  So you have that backwards.  In addition, there are many more exchanges and much volume never touches an exchange, so you can't use that graph to determine supply and demand for bitcoin.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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