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Author Topic: Here's how you can anticipate a coming crash/correction  (Read 10862 times)
bootlace
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March 29, 2013, 03:57:27 PM
 #1

If you're not a day trader, you might be overwhelmed with all the upward and downward price moves over the past couple of days. I've compiled a bunch of different data points tracking the growth of Bitcoin, hoping to help those who are concerned about the price fluctuation, whether Bitcoin is in a bubble, or whether the price has 'risen too quick'.

Currently all data points suggest Bitcoin is still growing, and that generally suggests prices moving higher.

So how to anticipate whether a price correction is coming or warranted? Following the data points below over time should warn you ahead of others if interest is waning. Until you see these charts start to slope down, I would not panic and would simply hold.

Disclaimer: I'm no financial adviser and hold no position in Bitcoin. Other unexpected factors could lead to a crash or correction so please act with caution and do your own research.
  

Google Searches: (Source: google.com/trends/explore#q=bitcoin)


Bitcoin client download on Sourceforge: (Source: sourceforge.net/projects/bitcoin/files/stats/timeline)


Wikipedia Bitcoin article traffic: (Source: stats.grok.se/en/latest90/Bitcoin)


Traffic to Bitcoin.org: (Source: alexa.com/siteinfo/bitcoin.org)


Domains linking to Bitcoin.org: (Source: ahrefs.com/site-explorer/overview/subdomains/bitcoin.org)


Number of Transactions: (Source: blockchain.info/charts/n-transactions-excluding-popular)


Reddit.com/r/Bitcoin growth: (Source: stattit.com/r/Bitcoin/)


Mentions of Bitcoin on Twitter: (Source: analytics.topsy.com/?q=bitcoin)


If there's any additional ones, please mention and I'll add to the list.

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March 29, 2013, 04:07:04 PM
 #2

This should be in the Speculation/Snake Oil subforum
bootlace
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March 29, 2013, 04:28:49 PM
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This should be in the Speculation/Snake Oil subforum

Data points from 8 different sources are "snake oil" now? Factors affecting Bitcoin value is related to 1) its usefulness and 2) how much demand there is - the data points aims to analyze the second factor in an objective and measurable fashion.

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March 29, 2013, 04:32:21 PM
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move to speculation.
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March 29, 2013, 04:36:28 PM
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Interesting, thanks for the query urls.
If there was a way to weigth these factors, that would make some good index.
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March 29, 2013, 04:38:34 PM
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I for one thank the OP for the work he put into this thread.

It is interesting to have in a quantitative manner what is going on with user interest.

If you enjoyed the advice I gave, feel free to toss over some loose change Smiley
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March 29, 2013, 05:04:05 PM
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Win post. Speculation and /r/Bitcoin will love this.
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March 29, 2013, 05:31:34 PM
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If you have an alternative link to replace the Google trends link, they require an account to see their data.

Good info though, and thanks for revealing this.
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March 29, 2013, 05:48:43 PM
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Did anyone look back at the 6/11 crash? I think these curves lag the crash considerably.

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March 29, 2013, 05:58:49 PM
 #10

Very nice compilation, thanks for putting this together. I would love to see some kind of "normalized index" that crunches all this data into one single number.
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March 29, 2013, 06:04:42 PM
 #11

This isn't speculation.  It's perfectly reasonable to look for "metrics" to predict bitcoin's moves.

Someone elsewhere mentioned the backlog of Mt Gox customers that are waiting to get verified, which I would love to know.  But I don't know how anyone could know that short of working there.
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March 29, 2013, 06:46:08 PM
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Did anyone look back at the 6/11 crash? I think these curves lag the crash considerably.

If I'm not mistaken the 6/11 crash occurred due to a hack, not falling interest, so this analysis is not suitable for those types of unexpected events. (although here's the graph if you wish to take a look at it regardless http://i.imgur.com/cz1ETwj.png?1)

I believe at this stage a lot of the price surge can be attributed to people expecting (and already factoring in) further demand increases as the Cyprus situation spreads to other countries. I'm saying this because Bitcoin has not warranted a rise to $90+ based on its 'usefulness' aka new businesses accepting it. If this run up had come on the heels of multiple major businesses accepting Bitcoin and not the Cyprus situation, then a different analysis would be required.

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March 29, 2013, 06:52:17 PM
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[qoute]Disclaimer: I'm no financial adviser and hold no position in Bitcoin. Other unexpected factors could lead to a crash or correction so please act with caution and do your own research.[/qoute]

This bit.

People should look into the political aspect of things globally, and obviously keeping on track of new business ventures and whats coming the corner. That will give you a clearer idea of what to expect.

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March 29, 2013, 10:04:38 PM
 #14

This should be in the Speculation/Snake Oil subforum

Data points from 8 different sources are "snake oil" now? Factors affecting Bitcoin value is related to 1) its usefulness and 2) how much demand there is - the data points aims to analyze the second factor in an objective and measurable fashion.

The snake oil comes in because the correlations are dubious.

Visits on a website are not indicators of demand, the amount of tweets neither. Interest, yes. Not at all the same thing.



I would argue that at this point in Bitcoin's life-cycle, new demand is directly correlated with interest. Perhaps 0.01% (made up number) of anyone who hears about Bitcoin decides to try it out, so an increase in the amount of people who hear about it does in fact convert to demand pretty reliably - this is the premise by which online advertisement works as well (conversion rates etc).

Snake oil has connotations of trying to trick someone or being fraudulent, it is rather upsetting to be labeled as such when I spent time and effort trying to provide some value to the community. If I was trying to trick people I would have not advised people to hold, because I'm personally looking to buy.

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Stephen Gornick
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March 29, 2013, 10:28:08 PM
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But I don't know how anyone could know that short of working there.

Periodically a number will be shared on the #mtgox irc channel.

7,700 was the number given within the past 24 hours.

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March 29, 2013, 10:44:52 PM
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Bitcoin price is a google trends predictor.

Seeking Beta testers. PM me for more information.
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March 29, 2013, 10:57:43 PM
 #17

Did anyone look back at the 6/11 crash? I think these curves lag the crash considerably.

If I'm not mistaken the 6/11 crash occurred due to a hack, not falling interest, so this analysis is not suitable for those types of unexpected events.


You are right:

http://arstechnica.com/tech-policy/2011/06/bitcoin-price-plummets-on-compromised-exchange/


Which is why the bad folks can still control the price of bitcoin, since if they have big hacking abilities, those same evil abilities can be a biiiig temptation. Only they will know when the right time is to sell, thanks to centralized bitcoin markets.
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March 29, 2013, 11:13:14 PM
 #18

It would be interesting to take this data and further divide it into geographic regions. I would me mostly interested in search trends, links etc from Europe in the past two weeks so see how much capital is going to be dumped into BTC by EU residents in the next two weeks.

- aka The "DigiMan"
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March 30, 2013, 12:37:02 AM
 #19

Did anyone look back at the 6/11 crash? I think these curves lag the crash considerably.

If I'm not mistaken the 6/11 crash occurred due to a hack, not falling interest

No. Wrong. The price had dropped to $17 before the Mt.Gox incident.

I know this because Tyler knows this.
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March 30, 2013, 12:53:37 AM
 #20

Interesting graphs. Thanks for posting!

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