Oddly Stable

[dannickherpderp]

The price has been floating around 19USD for the last couple of days.  Does anyone have any idea why?

[TraderTimm]

The price has been floating around 19USD for the last couple of days.  Does anyone have any idea why?

The pedantic answer would be an equilibrium of buyers and sellers. There have been a few interruptions in trading with Mt.Gox, as Tux is working through some issues brought about by his growth and random DDoS events. Tradehill seems to have stayed in the game, so at least there's an alternative available.

You shouldn't worry so much about absolute price, though. Get people interested, this is the currency of the future.

[Macho]

Big guys have taken a nap in the face of the recent turbulence As soon as things stabilize a little they'll come back and the roller-coaster in on

[pokwer]

Is it just me or is it looking kind of similar to the period of relative calm following the rapid ramp-up from $4 to $9?

http://bitcoincharts.com/charts/mtgoxUSD#rg5zig15-minzczsg2011-06-11zeg2011-06-18zvzlztgSza1gWMAzm1g10zm2g25

vs

http://bitcoincharts.com/charts/mtgoxUSD#rg90zig15-minzczsg2011-05-15zeg2011-05-22zvzlztgSza1gWMAzm1g10zm2g25

Hmm, maybe just me...

EDIT: Fixed URLs (noob fail)

[flug]

If I had a load of BTC to sell, I'd probably just leave a load of them sitting at $20 right now and let buyers chip away at them, which would constrain the price. Makes sense, no?

[Findeton]

There's not enough "real economy"  as of now to support a stable price. So it's investors and not "real economy" that are supporting this price.

[jhansen858]

When the coins have had a price/dollar vary less then  +- 10% for over a year I'll call them stable...

[imperi]

The problem is that when the prices become too stable, Bitcoins seem more attractive which leads to the price increasing. Might not be a "problem" exactly.

[jhansen858]

real businesses and trade will not be possible until it is stable.  So yes, I think it would be a good thing

[done]

Take advantage of the chance to buy at a stable price

[imperi]

real businesses and trade will not be possible until it is stable.  So yes, I think it would be a good thing

There is also an inherent volatility when the prices are low. For example, if I want to buy a $10,000 car using Bitcoins, and it is only 1 Bitcoins per dollar, then by nature that will extremely disrupt the market to do the conversion (in this example am converting currencies in addition to car purchase). People are only going to be converting 20-80k Bitcoins per day no matter what the price is. So this 20-80k Bitcoins will have to accommodate the cash flow of millions of dollars or the market will go berzerk.

[NO_SLAVE]

The price has been floating around 19USD for the last couple of days.  Does anyone have any idea why?

yes, the market participants are emotionally exhausted.
This is an equilibrium price, the players have said "yeh ok thats good" to this range on both the buy and sell sides.
This happens to be the point between the launch point and the high.
Once rested they will return to the same type of volatility.   

-trader of many many years

[flug]

When the coins have had a price/dollar vary less then  +- 10% for over a year I'll call them stable...

What about stability wrt GBP and EUR?

It's an international currency, not a US currency.

[billyjoeallen]

There's not enough "real economy"  as of now to support a stable price. So it's investors and not "real economy" that are supporting this price.

Not so. Increased velocity effectively increases supply, which would lower price.

[airdata]

Can somebody answer me this question....

I see all this talk about how people selling their btc makes the value go down.

Why?

I could understand if there was in fact a central place buying up the coins per-se.  But isn't MTGOX simply filling orders that other users have on the books with them?  If somebody sells 100k btc, that means somebody is buying 100k btc, right?

So.. somebody please tell me where my logic is flawed.

[SgtSpike]

Can somebody answer me this question....

I see all this talk about how people selling their btc makes the value go down.

Why?

I could understand if there was in fact a central place buying up the coins per-se.  But isn't MTGOX simply filling orders that other users have on the books with them?  If somebody sells 100k btc, that means somebody is buying 100k btc, right?

So.. somebody please tell me where my logic is flawed.

If I have an order on the books for $20/BTC for 10 BTC's, and someone else wants to sell their bitcoins, but are a bit more desperate to do so, then they'll have to post their price below mine.

Really, when people say that selling btc makes the price go down, they really mean that listing bitcoins for sale makes the price go down.

[Bitcoin Swami]

Can somebody answer me this question....

I see all this talk about how people selling their btc makes the value go down.

Why?

I could understand if there was in fact a central place buying up the coins per-se.  But isn't MTGOX simply filling orders that other users have on the books with them?  If somebody sells 100k btc, that means somebody is buying 100k btc, right?

So.. somebody please tell me where my logic is flawed.

If your selling at the market value then as each bid is filled the price will get lower as it goes to the next bidder in line.

[frozen]

Can somebody answer me this question....

I see all this talk about how people selling their btc makes the value go down.

Why?

I could understand if there was in fact a central place buying up the coins per-se.  But isn't MTGOX simply filling orders that other users have on the books with them?  If somebody sells 100k btc, that means somebody is buying 100k btc, right?

So.. somebody please tell me where my logic is flawed.

Increase the number of sellers and you increase the quantity of BTC available at a certain price. Someone will be desperate enough to let a BTC go for less than you are selling, and consume orders before you are able to. If enough time passes before your sale goes through, you may be forced to lower your price.

[TraderTimm]

Can somebody answer me this question....

I see all this talk about how people selling their btc makes the value go down.

Why?

I could understand if there was in fact a central place buying up the coins per-se.  But isn't MTGOX simply filling orders that other users have on the books with them?  If somebody sells 100k btc, that means somebody is buying 100k btc, right?

So.. somebody please tell me where my logic is flawed.

If in your example, there was an order to buy 100k near that offer, yes - it would cross and not really move anything.

It's really all about the order book. You are right, your order is on the opposite 'side' of anyone elses, and you are matched to the closest bid/offer. Where order depth comes into play is what 'moves' price. (This also assumes you've put in a market order and not a limit order.) Your order simply takes out all the offers if you are buying, or the bids if you are selling - depending on how many are at each price level.

Hope that helps.

[airdata]

Thanks for the replies guys.

(never took and never plan to take any sort of economics classes)