Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[bassclef]

I'm still expecting a plunge to as low as $220, but I'm buying anyway. These prices are just too low to pass up. I just don't think there was enough volume in the bounce off of $255 for it to be a final bottom. Worst case scenario is cascading margin calls that drop us to $200. Unlikely but possible. Ironically Stamp's suspended operations has given me and I suspect others time to pad our margins.  It also halted some panicked people.

A successful retest of $255 where it holds on even higher volume means a very likely end of the bear market, but it's way too soon to call it. Best case scenario is that Coinbase went down due to overwhelming buying. I doubt that's really the case but it's possible. If people really were naked short-selling, then there will be (and possibly is) a scramble to find coins in order to cover.

The least likely scenario is we go straight up from here. If that happens, a lot of short positions will be force liquidated causing a massive spike with a major retracement. If that happens, go margin short as close to the top as you can and then cover on the retracement.

That's not exactly how it would play out. If we retest, it should be on lower volume or it's liable to break through $250.

The away I see it, if we don't get a higher volume follow thru on this swing downward, the trend will continue up.

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[Gatekeeper]

Shorts at Bitfinex 23,617.72 BTC

[Miz4r]

Here's my speculation: Bitstamp has lost almost 19k coins and will either have to buy the coins back somehow or go under. I don't think $5M is enough to really make Stamp go out of business so that means 19k coins will be bought. Meanwhile the hacker is also sitting on almost 19k coins but he will probably be looking to sell those coins off-exchange and he may keep a percentage of coins around for later. So the net effect I think will be that the price is going up short term because Stamp is buying to cover their losses and smart speculators will know and front run that. Once all doubt is cleared about Stamp and they are back in business (which I think is very likely) it's probably rally time for a bit and all the shorts will have to watch out for an epic squeeze.

[ChartBuddy]

Bitfinex

Explanation

[solex]

Here's my speculation: Bitstamp has lost almost 19k coins and will either have to buy the coins back somehow or go under. I don't think $5M is enough to really make Stamp go out of business so that means 19k coins will be bought. Meanwhile the hacker is also sitting on almost 19k coins but he will probably be looking to sell those coins off-exchange and he may keep a percentage of coins around for later. So the net effect I think will be that the price is going up short term because Stamp is buying to cover their losses and smart speculators will know and front run that. Once all doubt is cleared about Stamp and they are back in business (which I think is very likely) it's probably rally time for a bit and all the shorts will have to watch out for an epic squeeze.

The next US Marshall's auction might see a keen bidder from Central Europe.

[byronbb]

Am I seeing a huge influx of new accounts dedicated to trolling fud or is this just more of the same from this site?

[ChartBuddy]

Bitfinex

Explanation

[wpalczynski]

What makes the situation suspicious is that apparently they usually only kept 3k or so in the hot wallet according to someone who analyzed the address.  Shortly before the "hack" there was a large deposit made into the account making the large theft possible.  How reliable the blockchain analysis is on which the above conclusions are based I do not know but if that happens to be true its hard to imagine how this could be a just a case of a hacked hot wallet.

I just don't understand how bitstamp, one of the worlds leading bitcoin exchanges, can have their wallets compromised to the tune of 19,000 bitcoins. Does this smell like an inside job or a royal screw up?

[chopstick]

It's probably an inside job. But why??? Never underestimate human greed.

[JayJuanGee]

Have to say I'm surprised I didn't have to tweak the scaling factor between Stamp and Finex. Quite similar market depths there.

I'm impressed by how stable the finex feed is, no more missing data segments, yet.

I wonder if those problems with the stamp feed were some kind of signal or precursor?

You guys are daytrading again, aren't you

LOL!  

Yup! Been "day trading" ever since 450 CAD

Every payday I trade as much fiat for bitcoin as I can afford to.  

amidoingitright?

You must have a good little stash of BTC, then?  hahahaahahaha   

maybe high cost per BTC, but if the price goes back up, then the average cost per btc will begin to seem cheap.

[ChartBuddy]

Bitfinex

Explanation

[Deadstock]

I'll be happy at $300

[Fatman3001]

I'll be happy at $300

I'll raise that to $750

[billyjoeallen]

Of course! Why didn't I think of this before? Coinbase was using Stamp for liquidity! That meant that if they ran out of coins, they would buy from Bitstamp. They went down because they ran out of coins and had nobody to buy from!

CB is back up now which means they either got coins from selling customers, pulled some of their reserves from cold storage,  or they found a different exchange (BFX or Kracken) from which to buy.

[Deadstock]

I'll be happy at $300

I'll raise that to $750

if it hits $750, a cold one is on me 

[Patel]

[octaft]

What makes the situation suspicious is that apparently they usually only kept 3k or so in the hot wallet according to someone who analyzed the address.  Shortly before the "hack" there was a large deposit made into the account making the large theft possible.  How reliable the blockchain analysis is on which the above conclusions are based I do not know but if that happens to be true its hard to imagine how this could be a just a case of a hacked hot wallet.

I just don't understand how bitstamp, one of the worlds leading bitcoin exchanges, can have their wallets compromised to the tune of 19,000 bitcoins. Does this smell like an inside job or a royal screw up?

Perhaps deposits are put directly into the hot wallet, and since the price was plummeting, they were getting a larger than usual amount of deposits?

If it really wasn't an inside job, maybe the person knew about the exploit for a while and was waiting for a price drop so they could snag a larger amount of bitcoins in one go.

[ChartBuddy]

Bitfinex

Explanation

[billyjoeallen]

I don't have an account at Bitsamp so someone who knows more about it can correct me, but as I understand it, there isn't direct short-selling there. You have to borrow coins from other account holders and sell them, then presumably buy back on the exchange to cover your short.

If this is the case, then what if someone compromised Stamp a long time ago to not only sell non-existent coins but also to lend them out at interest? That could explain low swap costs (real coin lenders have to compete with fake coin lenders driving swap costs down). More importantly it could explain the prolonged bear market.

With naked short-selling, an unethical billionaire or group of rich people could drive the BTC price down for a prolonged period of time in order to acquire equity in the Bitcoin ecosytem at a steep discount. I'm pretty sure the FBI would consider this criminal behavior if it turns out they auctioned off their confiscated coins for a fraction of their true worth.

This is speculation, but it seems like an extremely convenient time for Stamp to get hacked just as they had an unusually large amount of coins in their hot wallet. That is further circumstantial evidence of a previously compromised security system. 

Or it could be an inside job. I don't know the operators, but when I think of Slovenians, the term "rock-solid highly ethical financial management" does not come to mind.

[freebit13]

What makes the situation suspicious is that apparently they usually only kept 3k or so in the hot wallet according to someone who analyzed the address.  Shortly before the "hack" there was a large deposit made into the account making the large theft possible.  How reliable the blockchain analysis is on which the above conclusions are based I do not know but if that happens to be true its hard to imagine how this could be a just a case of a hacked hot wallet.

I just don't understand how bitstamp, one of the worlds leading bitcoin exchanges, can have their wallets compromised to the tune of 19,000 bitcoins. Does this smell like an inside job or a royal screw up?

Read that yesterday too, here it is: https://bitcointalk.org/index.php?topic=915160.0

Edit: ^^ this points to more than just a wallet hack, whoever swept those coins into that wallet before clearing it must have had access to more than just the wallet.dat file...