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Author Topic: Google Trends & BTc Price  (Read 1702 times)
Meman
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March 22, 2013, 01:14:44 AM
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Remember the BTC price crash in 2011?

Below is the google trends chart of the search term "bitcoin" from 2010 until today.



The overall interest in bitcoins still hasn't reached it's peak from mid 2011 and there still seems to be upside potential.

However, in my opinion, the danger of another price crash is rising. What do you think?
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March 22, 2013, 02:00:03 AM
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try adding 'facebook' as an additional term.
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March 22, 2013, 02:06:11 AM
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Before the recent spike and not including the summer of 2011, the search term "bitcoin" was about the same as "U of T"

How many people here know what U of T is without googling?

http://www.google.ca/trends/explore#q=bitcoin%2C%20U%20of%20T&date=1%2F2010%2040m&cmpt=q

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March 22, 2013, 02:08:55 AM
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http://www.google.ca/trends/explore#q=bitcoin%2C%20crysis&date=1%2F2010%2040m&cmpt=q

coincidence? I think not!

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March 22, 2013, 02:11:22 AM
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hmmm, interesting....

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March 22, 2013, 02:12:29 AM
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As we have always seen. Google trends follows the rise of the bitcoin price.

So bitcoin price is a good predicter of google trends.

Use such information wisely.

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March 22, 2013, 02:13:25 AM
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http://www.google.ca/trends/explore#q=bitcoin%2C%20bananas&date=1%2F2010%2040m&cmpt=q

`.` bananas are more popular than bitcoins and should be used as a currency.

edit: or is it .`. ? It's been forever.

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March 22, 2013, 02:37:29 AM
 #8

Remember the BTC price crash in 2011?

Below is the google trends chart of the search term "bitcoin" from 2010 until today.



The overall interest in bitcoins still hasn't reached it's peak from mid 2011 and there still seems to be upside potential.

However, in my opinion, the danger of another price crash is rising. What do you think?

I think the risk of a crash is relatively constant, in fact probably falling over time...  it is dependent on a few factors with a largely fixed probability -- major hacks, protocol problems, better investment opportunities coming along, and so on. The risk is not strongly coupled to past performance.

You can't predict the risk of a crash from looking at charts.

Meman
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March 22, 2013, 03:02:58 AM
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You can't predict the risk of a crash from looking at charts.
So you basically negate the usefulness technical analysis?

My speculation is, that if a similar scenario like in 2011 occurs, the BTC price should reach it's top within the next 2 or 3 months.

I've already sold all my Bitcoins, but it'll be interesting to see, how this plays out. Maybe i sold too early, but i'm happy anyway  Smiley
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March 22, 2013, 03:19:25 AM
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So you basically negate the usefulness technical analysis?



Exactly! TA has it's place, but it's usefulness (IMO) is in observing historical impact of events and extrapolating how they might apply in the current situation.

Again IMO, that has a much higher chance of working in a mature market.

However, Bitcoin is *not* a mature or steady market. The number and type of players is increasing dramatically.

The number of participants now is several orders of magnitude larger than 2011, and they have a different investing profile. You can't compare past events with the current situation.

Once the market is established, you will be able to -- but now it is just wild guesswork.

"2011 big rise then crash, therefore crash" sounds like sound logic, but it is not -- it is gamblers' fallacy; looking for patterns in random or disconnected events.


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March 22, 2013, 03:39:07 AM
 #11

However, Bitcoin is *not* a mature or steady market. The number and type of players is increasing dramatically.
True words and also the reason for my early selling.
The BTC market is very volatile and unpredictable.
To me it's a fun game, betting some tips, no serious investment.
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March 22, 2013, 04:01:37 AM
 #12

Remember the BTC price crash in 2011?

Below is the google trends chart of the search term "bitcoin" from 2010 until today.



The overall interest in bitcoins still hasn't reached it's peak from mid 2011 and there still seems to be upside potential.

However, in my opinion, the danger of another price crash is rising. What do you think?
I do not understand what you are trying to show here. There is a plot showing that weekly google search volume for "bitcoin" has recently been increasing, but is presently below the peak from 2011.

Next, you state an opinion that the "danger" of another price crash is "rising."  How is this related to your observation of the search volume? Also, what makes you think that the risk of price correction is rising? Why would it not be constant? Or declining? Is your statement different from saying that the danger of another earthquake in California is rising? Or is it always the same?

I fail to see the reasoning behind your post. Please elaborate.

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March 22, 2013, 05:41:34 AM
 #13

Before the recent spike and not including the summer of 2011, the search term "bitcoin" was about the same as "U of T"

How many people here know what U of T is without googling?

http://www.google.ca/trends/explore#q=bitcoin%2C%20U%20of%20T&date=1%2F2010%2040m&cmpt=q

U of T is University of Toronto, and I didn't need to google it hahah.
Meman
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March 22, 2013, 02:15:14 PM
 #14

Next, you state an opinion that the "danger" of another price crash is "rising."  How is this related to your observation of the search volume? Also, what makes you think that the risk of price correction is rising? Why would it not be constant? Or declining? Is your statement different from saying that the danger of another earthquake in California is rising? Or is it always the same?
It's my own conclusion concerning the exponentially increasing search volume in conjunction with the (IMO) recent bitcoin hype and my own technical analysis of the 3yr daily price chart of BTCUSD. I know, it's a speculation, but there is a market ruled by greed and fear.

How do you evualuate the current situation on the bitcoin market?

IMO one of the big problems is, that someone with deep pockets could easily corner the whole BTC market. Anyway, it's alot of fun to watch this market and play with a small(!) amount of money.
Meman
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March 23, 2013, 06:53:20 PM
 #15

The situation is getting more and more interesting. The price for BTC's sunk pretty fast, since there was some big selling. Will there be a recovery? Maybe, but i wouldn't bet on it (i know, it's speculation). The google trends chart still looks unchanged, but people taking loans to buy bitcoins is a flashing sign to me.

http://www.google.com/trends/explore#q=bitcoin&date=1%2F2010%2041m&cmpt=q
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March 23, 2013, 08:09:56 PM
 #16

As for the correlation between google search volume and the price, it is similar (but with shorter delay) to correlation between mining difficulty (corrected for technology leaps) and price: it all follows price swings. Certainly it would be possible to drive the price up simply by driving media frenzy (real pump'n'dump) - but this has not happened at any significant scale yet.

Now, looking at the price itself, it is all  a matter of choosing time scale based on your preferences. There are multiple players in the game, and the system is fair and open to all, therefore there will inevitably be some volatillity. I am concerned with the long-term success of Bitcoin as a savings and payment system, so I tend to look at weekly averages over the period of many months or years. Minor rallies, crashes, and episodes of mass hysteria do not interest me much. Based on fundamentals, fair price right now is in the $30 - $60 range, and based on the additional media frenzy I'd put it at $50-$80.

If no real bad news hit us (major bug in the protocol - less and less likely as years go by), I see no reason for the general upwards trend to stop. Bitcoin is a useful technology, and more and more people will be finding it useful. Therefore, the value will keep rising, with the bumps along the way.

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Meman
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March 23, 2013, 10:05:51 PM
 #17

Certainly it would be possible to drive the price up simply by driving media frenzy (real pump'n'dump) - but this has not happened at any significant scale yet.
What are the signs for a media frenzy at a significant scale?

Quote
I tend to look at weekly averages over the period of many months or years. Minor rallies, crashes, and episodes of mass hysteria do not interest me much.
Me too, but there's a major rally taking place with alot of momentum. If there were a slower, more steadier price rise, i wouldn't have sold my bitcoins. Once the major rally ends, i'm expecting a major correction (speculation: this year). Maybe i'm wrong and the price continues to go straight up, but at the moment i'm feeling much safer at the sidelines.

Quote
Based on fundamentals, fair price right now is in the $30 - $60 range, and based on the additional media frenzy I'd put it at $50-$80.
What are the fundamentals? Looking back at 2011, a big frenzy even could drive the price up to $100 and more.

Quote
Therefore, the value will keep rising, with the bumps along the way.
As a store of value, i think it's much better to hold bitcoins, than to hold fiat money. The big problem as a store of value in my opinion is the equation "no electricity = no bitcoin transactions".
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