SlipperySlope's Bubble Collapse Journal

[RationalSpeculator]

[edited to add new posts and to reflect current events]

My principal comments regarding the short term bear case, and its potential for literally multiplying the number of bitcoins you sold to raise cash.

• Day 4 post peak - Compare two bitcoin bubbles.
• Day 5 post peak - Price dropping 10 times faster than back in 2011 bubble.
• Day 7 post peak - How many more seller capitulations before the bottom?
• Day 11 post peak - Does the recent dramatic recovery from 50 to 136 USD/BTC negate the case for a short term bear market?
• Day 12 post peak - Long term chart is awesome
• Day 13 post peak - Sucker's Rally

Hey SlipperySlope,

I'm looking for some more bearish talk on bitcoin

You have some?

What's your current analyses of the situation?

[1714032515]

1714032515

[1714032515]

1714032515

[rpietila]

[edited to add new posts and to reflect current events]

My principal comments regarding the short term bear case, and its potential for literally multiplying the number of bitcoins you sold to raise cash.

• Day 4 post peak - Compare two bitcoin bubbles.
• Day 5 post peak - Price dropping 10 times faster than back in 2011 bubble.
• Day 7 post peak - How many more seller capitulations before the bottom?
• Day 11 post peak - Does the recent dramatic recovery from 50 to 136 USD/BTC negate the case for a short term bear market?
• Day 12 post peak - Long term chart is awesome
• Day 13 post peak - Sucker's Rally

Hey SlipperySlope,

I'm looking for some more bearish talk on bitcoin

You have some?

What's your current analyses of the situation?

SlipperySlope is busy thinking, whether to attend my conference. I can say that we are on track to cross the ATH by May 2nd (which is Thursday this week), this would lead to exactly 3000% time compression compared to the 2011 bubble, both in the crash and the recovery part.

[SlipperySlope]

20 days after the April 10 peak



The most significant resistance to increasing bitcoin prices is currently above $145. The recent peak at $160 has not yet been surpassed.

Now that 20 days have elapsed after the all-time-high of $266, the amount of buying enthusiasm that used to arrive each Monday morning is waning. Based upon the decline back to underlying trend predicted by speculative financial bubble theory, and comparison with the June, 2011 bubble, I expect the trading emphasis to shift to defending the support at $120, rather than pushing above $160 to new highs. I believe, that until $120 is breached to the downside, the way down will be primarily motivated by profit taking, and below $120 by loss-staunching and periodic capitulations.

What would negate the case for a the short term bear market? New high prices, in particular a new all time high.  What would confirm the case? A long battle at $120 with a breakthrough to lower prices, in particular a low below $60.

Sentiment continues to cool 20 days post bubble peak, e.g. Google Trends, Reddit.

I sold some more bitcoins at $135 and have outstanding sell orders below $150, attempting to raise more $ selling into what I think is a Sucker's Rally.

[smoothie]

In a Suckers Rally, the only suckers are the ones selling bitcoins in a hyper-deflationary currency.

 

[SlipperySlope]

In a Suckers Rally, the only suckers are the ones selling bitcoins in a hyper-deflationary currency.

 

The usual notion of Sucker's Rally is to distinguish buyers who are misinformed about valuation, as subsequent price action reveals. Let's see what happens.

You joined in time for the first bubble collapse back in June 2011. Do you recall the steady, gut-wrenching decline from the $20's down to $2? I do. It's little comfort  withstanding a 90% drop in value knowing that bitcoins will eventually be worth $$$ each.

[Frozenlock]

I see a bullish continuation through the end of the year. Meaning I believe we will have broken the high of $266 by December of this year.

By December? How is that bullish?

[smoothie]

I see a bullish continuation through the end of the year. Meaning I believe we will have broken the high of $266 by December of this year.

By December? How is that bullish?

How is it not? lol

So many of you here are such short term thinkers.

"OMFG price went down today SELL! BEAR MARKET!"

[SlipperySlope]

All of the recent developments warrants this price we are at.

Ah yes.

But back in January, the price was warranted too - at $13.50. We all can see what has changed in those months, but the flood of new money that was the biggest change - appears to be waning.

[smoothie]

All of the recent developments warrants this price we are at.

Ah yes.

But back in January, the price was warranted too - at $13.50. We all can see what has changed in those months, but the flood of new money that was the biggest change - appears to be waning.

Well we can't say we KNOW how much money exists on gox or is flowing into bitcoin.

You can only see the bids. That's it. Well and your account balance.

[rpietila]

Gox is a big tape-painting club. The real bitcoin flows are moving to OTC as we speak. Most of the trade in gox is trading, not legit movements of bitcoins to new owners.

[Frozenlock]

And on which price are those OTC based?

[rpietila]

And on which price are those OTC based?

In the future, they will be based on Dealer Network Fix (3 times per day). Today they are based on gox, with a 6-15% margin on top.

I also buy bitcoins for 5% below gox.

[jmw74]

Gox is a big tape-painting club. The real bitcoin flows are moving to OTC as we speak. Most of the trade in gox is trading, not legit movements of bitcoins to new owners.

I'm not sure I understand the difference.

Also, by OTC are you referring to the IRC channel?  Why is someone selling you btc for 5% less than they would get on mtgox?  Volume?  Privacy? 

[shad0wbitz]

SlipperySlope is busy thinking, whether to attend my conference. I can say that we are on track to cross the ATH by May 2nd (which is Thursday this week), this would lead to exactly 3000% time compression compared to the 2011 bubble, both in the crash and the recovery part.

rpietila, reading your posts I wonder... Can I smoke some of what you are smoking?

[rpietila]

SlipperySlope is busy thinking, whether to attend my conference. I can say that we are on track to cross the ATH by May 2nd (which is Thursday this week), this would lead to exactly 3000% time compression compared to the 2011 bubble, both in the crash and the recovery part.

rpietila, reading your posts I wonder... Can I smoke some of what you are smoking?

Sure I'll show you what I have ... if you just come and see me

[rpietila]

Gox is a big tape-painting club. The real bitcoin flows are moving to OTC as we speak. Most of the trade in gox is trading, not legit movements of bitcoins to new owners.

I'm not sure I understand the difference.

Also, by OTC are you referring to the IRC channel?  Why is someone selling you btc for 5% less than they would get on mtgox?  Volume?  Privacy? 

Trading = buying and selling your own position, to make a profit/loss depending if you're right
Dealing/brokering = buying and selling to the client, to make a commission regardless of the price

I do both. The IRC channel I don't know. "OTC" is a general term for all trade that happens outside of the real-time exchange.

I dunno why people want to sell to me for 5% less but that's what they do. They also pay me 10% over.

[zeroday]

I dunno why people want to sell to me for 5% less but that's what they do. They also pay me 10% over.

Yes, I bought from rpietila paying 10% over gox's price. However, I got those bitcoins immediately without the need of waiting until my wire comes to the Gox. A week after the deal I gained 40% profit from that amount. That's why I preferred to deal with rpietila rather than with gox.

[Rampion]

Well, there are different indicators that point on opposite directions.

From one side, a long term bear market is a reasonable outcome of this correction: price declines so new money interested in riding the bubble stops flowing in, holders start to get nervous and want to secure some profits, price declines even more and there you have the downwards spiral...

But, this time the feeling is much different compared to 2011. News are still positive (in 2011 we had only FUD in all media), a lot of people is working to support BTC economy, infrastructure its on the way to improvement... And I would like to remark that news are still positive because more people is really understanding what is Bitcoin and how it works. This is really important. Yes, it's true that most of people is only interested in the get-rich-quick scheme, and that's why rise in price is directly proportional to new money flowing in. BUT, we still have a lot of both influential and normal people embracing Bitcoin.

Sure, we can expect a decline in the price discovery phase, but still Bitcoin feels stronger than ever. Short term bear case? Good opportunity to buy more BTC.

[rpietila]

Sure, we can expect a decline in the price discovery phase, but still Bitcoin feels stronger than ever. Short term bear case? Good opportunity to buy more BTC.

I don't know how you bears can pretend that you believe any of the FUD..

Reality is, bitcoin's usage is growing at a 10-30% weekly rate. Hard time believing that it would not be the price trend also.

When I went to a certain grade at school back in 1998, two people in the class had a mobile phone. When we graduated 9 months later, everyone except two had it.

Bitcoin will be the same, and year will be 2013. Only difference is that with mobiles, you always pay. With bitcoin, everyone who buys below the long term fair value of $300k/BTC, gets rich. This will only aid adoption, not hinder it. 

[notme]

All of the recent developments warrants this price we are at.

Ah yes.

But back in January, the price was warranted too - at $13.50. We all can see what has changed in those months, but the flood of new money that was the biggest change - appears to be waning.

I don't agree it is waning:


Bid sum is $5 million higher than at the price peak.