Possible anomaly with the recent $0.50 peak

[ribuck]

Maybe I'm misunderstanding the raw data, but there seems to be something very odd about the peak in the BTC price two days ago, where it touched $0.50 three times.

I'm looking at the historical data provided by the link at the bottom of the Bitcoin Watch home page. If I look at the transactions between 23:04:50 and 23:43:39 GMT on 6 November, these are the trades I see:

Code:

Price  Amount
0.33   3000
0.35     25
0.35     25
0.50     25
0.49     27
0.37     36
0.50     10
0.48     68
0.37     93
0.50     10
0.37     60
0.37      8
0.39     30
0.39    500

The MtGox trade data normally shows plenty of trades for hundreds or even thousands of BTC, but these trades are very small. And MtGox normally has a big order book, meaning you can't move the market from $0.37 to $0.50 by buying just 60 bitcoins.

Notice how the price touched 0.50 three times, and dropped back to 0.37 between each one. What exactly happened here?

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[ribuck]

The MtGox 48-hour chart is in the attachment.

[FreeMoney]

The market gets very thin at the edges that's all. People didn't expect it to go that high and didn't have large orders in place, over time they've been put in. Now it would take a huge volume (or the orders to be removed) to get back to 50 cents.

[TTBit]

If you owned 20,000 bitcoins, wouldn't you want to spend an extra $5.00 and buy 10 bitcoins at 50c each, therefore bringing your net worth of bitcoins to $10,000?

The individuals putting out these quotes in thin markets know exactly what they are doing. In this case, they may be encouraging new offers to come to market.

[ShadowOfHarbringer]

Maybe I'm misunderstanding the raw data, but there seems to be something very odd about the peak in the BTC price two days ago, where it touched $0.50 three times.

I'm looking at the historical data provided by the link at the bottom of the Bitcoin Watch home page. If I look at the transactions between 23:04:50 and 23:43:39 GMT on 6 November, these are the trades I see:

Code:

(...)

The MtGox trade data normally shows plenty of trades for hundreds or even thousands of BTC, but these trades are very small. And MtGox normally has a big order book, meaning you can't move the market from $0.37 to $0.50 by buying just 60 bitcoins.

Notice how the price touched 0.50 three times, and dropped back to 0.37 between each one. What exactly happened here?

Classic speculation ?
Move along, nothing to see here.

[sturle]

Maybe I'm misunderstanding the raw data, but there seems to be something very odd about the peak in the BTC price two days ago, where it touched $0.50 three times.

I can confirm this.  I didn't have any coins for sale at 0.5, and look at this from my Account History:

Code:

When            Type      Description       Delta BTC    Delta USD  Total BTC  Total USD
11/07/10 08:36  Sold BTC  0 for 0.5	    -0.002       0.001      -0.002     xxxxx.603
11/07/10 08:36  Sold BTC  42.05 for 0.4399  -42.048      18.497      0         xxxxx.602

[bitcoinex]

Showing on the diagram exchange rates for all orders that have participated in the trade at same time is a incorrect.

Better show the average rate of the trade. Then the diagram will not be like a forest of trees constructed by points which standing exactly above each other, and will provide more useful information.

[kiba]

Nothing to see here. Move along.

I am one of those traders who like to profit by selling and buying small amount of bitcoins, especially where the offers don't meet closely.

[sandos]

Graph needs to show volume?

[FreeMoney]

Graph needs to show volume?

http://www.bitcoincharts.com

will show you detailed volume, it was low. I looked at the trades as they happened at

http://www.mtgox.com/code/data/getTrades.php

It doesn't go back that far now though.

[ribuck]

... I didn't have any coins for sale at 0.5, and look at this from my Account History:

Code:

When            Type      Description       Delta BTC    Delta USD  Total BTC  Total USD
11/07/10 08:36  Sold BTC  0 for 0.5	    -0.002       0.001      -0.002     xxxxx.603

Now that you mention it, I've also got one of those bogus $0.50 transactions in my MtGox account history. I didn't worry about it at the time because it was so tiny.

Anyway, it's all hypothetical now that the price has retreated.

[FreeMoney]

... I didn't have any coins for sale at 0.5, and look at this from my Account History:

Code:

When            Type      Description       Delta BTC    Delta USD  Total BTC  Total USD
11/07/10 08:36  Sold BTC  0 for 0.5	    -0.002       0.001      -0.002     xxxxx.603

Now that you mention it, I've also got one of those bogus $0.50 transactions in my MtGox account history. I didn't worry about it at the time because it was so tiny.

Anyway, it's all hypothetical now that the price has retreated.

I wonder if it's some bug triggered by the total clearing of the ask side. I'm pretty sure the .50 was the last ask, but not positive.

[S3052]

Just a comment:

Currently, it seems that one or a few big players put huge selling volume into MtGox at 0.30-0.35 $. This can have a number of reasons. One of them could be that they try to acquire much more bitcoins to dominate the market even further.

By putting huge selling volume into the market, they ensure that the market can not rise (unless people buy about 100,000 bitcoins). With this strategy, they put a lid on the market to collect cheap coins.

Otherwise, it would not make sense to show all market participants the huge selling volume so openly. If they would be interesting into rising prices in the short term, they would not show their sell orders, but would do this more hidden (as some other forum member has pointed out as well).

[sturle]

Just a comment:

Currently, it seems that one or a few big players put huge selling volume into MtGox at 0.30-0.35 $. This can have a number of reasons. One of them could be that they try to acquire much more bitcoins to dominate the market even further.

By putting huge selling volume into the market, they ensure that the market can not rise (unless people buy about 100,000 bitcoins). With this strategy, they put a lid on the market to collect cheap coins.

Otherwise, it would not make sense to show all market participants the huge selling volume so openly. If they would be interesting into rising prices in the short term, they would not show their sell orders, but would do this more hidden (as some other forum member has pointed out as well).

This would be a natural explanation if the selling orders were put closer to the current price.  A price increase from 0.2 to 0.3 would give a very nice profit, and I don't think a large selling volume at 0.3 scares anyone from buying at the current price level.  We have seen a lot of this price manipulation in the past, when large selling orders have been put just above current price to push it down, or large buying orders have been placed just below current price to push it up.  In those cases the price difference has been too small to gamble with.  Typically 0.05 or less, which gives an uncomfortably low profit margin towards the side which the order is put on, and at the same time a safety against large losses for anyone who bets in the "right" direction.  (The safety is not very real, of course, since the manipulator can remove the order at any time.)  Similarly the price has been stabilized within a narrow window by large orders on both sides.  Perhaps by different users trying to push in different directions.  I don't know.

I think the orders at 0.3 to 0.35 have been put there by one or more amateurs (someone like me) who looses if someone buy their coins at a lower price.  At least one big player pulled out with a nice profit when it was possible to recover funds from Mt. Gox again, and the other players are left with large amounts of bitcoins and no new buyers willing to pay the price they paid.

Trade is very slow now.  It's very hard to guess if the price will increase to 0.3 or drop to 0.17 or lower.  Everyone are dragging their feet.  Nothing will happen until either a new large player comes in with fresh USD, which could take a long time, or one of the large hoarders of bitcoins lose their patience, sell at the current price and take a loss.  The first is more probable.  Keeping a large amount of bitcoins doesn't cost anything at current interest levels.

[S3052]

We still don't understand the motive behind those sell orders.

... and we are still in the same deadlock as the 130,000 bitcoin sell orders are still ceiling the market.

Now buy orders moved close to the sell orders which further reduces trading activity ultimately.

Unless buyers come in prices will trend sideways or down for a while.

[FreeMoney]

Why do you assume the orders are not just someone wanting to sell coins? If the orders were flying around and dodging being taken then I would agree, but they just sit there waiting for their turn.

Is it just the size that makes you think this?

[S3052]

yes, its related to the size of the sell orders. If one really wanted to sell that many coins soon, one would not put so many orders in at the same time , but would let the market move higher and then skim it.
we may never find out exactly what's behind , and clearly this is all allowed, but I guess this is someone or a few people who know exactly what they are doing, and there must be some deeper objective behind (an objective that required keeping the market under 0.30$ for quite some time)

[ShadowOfHarbringer]

yes, its related to the size of the sell orders. If one really wanted to sell that many coins soon, one would not put so many orders in at the same time , but would let the market move higher and then skim it.
we may never find out exactly what's behind , and clearly this is all allowed, but I guess this is someone or a few people who know exactly what they are doing, and there must be some deeper objective behind (an objective that required keeping the market under 0.30$ for quite some time)

This is why i dislike large scale speculation.
There is a relatively small group of people with server farms & multiple radeon cards who own most of bitcoins and they can almost completely control the market.

At the moment, bitcoin prices are not governed by free market, but by large speculators. We need more of small players, so the bitcoins can diversify between another nodes some more.

[kiba]

yes, its related to the size of the sell orders. If one really wanted to sell that many coins soon, one would not put so many orders in at the same time , but would let the market move higher and then skim it.
we may never find out exactly what's behind , and clearly this is all allowed, but I guess this is someone or a few people who know exactly what they are doing, and there must be some deeper objective behind (an objective that required keeping the market under 0.30$ for quite some time)

This is why i dislike large scale speculation.
There is a relatively small group of people with server farms & multiple radeon cards who own most of bitcoins and they can almost completely control the market.

At the moment, bitcoin prices are not governed by free market, but by large speculators. We need more of small players, so the bitcoins can diversify between another nodes some more.

The free market is not a democracy.

Plus, miners need higher price for their speculation to be profitable.

[ribuck]

At the moment, bitcoin prices are not governed by free market, but by large speculators.

Speculators always need to sell eventually, which guarantees the "little guy" a chance to buy in.