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

[w00dy]

*hint*daily chart *hint*

This should help: http://bitcoincharts.com/charts/mtgoxUSD#rg30zigDailyztgSzm1g10zm2g25zxzi1gStochRSIzi2gRSIzi3gMACDzv

basically he's saying we are currently in a bullish market and a good prediction at least for the next few days is that prices will continue to rise.

just look on your chart.

we are already moving sideways. 100 never really broke even though whales tried a couple times.

this baby is going down soon but keep listening on this Ms.Market-want-orgasms dude.

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[Its About Sharing]

ATM everything is proceeding as expected.

Big bounce from the 200 day EMA, and then a longish period of "wait and see" (I said that as long as two weeks of sideways trading was expected, just as we had before the fast crash to $66).

Fiat in the order book increasing, coins decreasing. An important milestone will be the shipping of ASIC miners en mass. ATM they are just a few, and they still enjoy good profits. No need to dump all the coins on the market. That will change soon.

This is an interesting point I've been wondering about lately. I also believe they mentioned this on "Let's Talk Bitcoin" in the last week. What is going to happen with so many new mining rigs getting out there? The GPU miners will all off, almost there now.

I do wonder though, how many of these miners are just going to sit on their mined coins. The thing is, if many expect a downward movement in the price, then why not sell some while you can???
And what about all those coins already mined? Hmmmmm

Personally, I would probably sit on the coins, unless I was desperate for cash. Something about "owning" coins I've mined.

I'm a miner myself, and people in here doesn't not understand what a deep change in the game are ASICs. With GPUs, you could buy a $500 set-up and mine to hoard, as the investment was negligible and you could always sell your GPUs to gamers, "recouping your costs" was no big deal and no priority, it was a hobbyist occupation for 95% of the miners.

Now, the only purpose of those $2k, $4k, $7k ASIC rigs is to mine Bitcoin, and maaaany people didn't throw at those machines only "play money". Professional operations with the only purpose of generating PROFIT are being build up. Yes, many are still Bitcoin believers so they will hoard, but after they paid for their costs. And their aggregate costs are huge. BFL has millions of $ in preorders not shipped yet. KnC has millions of $ in preorders, there are millions of $ in Avalon chips, Bitfury machines and whatnot...

Now the very few ASIC miners (mostly Avalon miners, they are just a few hundred individuals) have enjoyed very healthy profits. They paid for their machines in a few days, with a few coins. But the profitability is declining VERY HARD, so more coins will have to be sold by the miners to recoup their hardware costs, which are denominated in FIAT.

Many seem to hide their heads in the ground, but the hard fact is that 10s of millions of $ have been invested in machines which only use is to mine BTC, and those 10s of millions of $ in mining rigs are a cost that miners are willing to recoup ASAP.

Some in here say "well, the BTC/USD will be higher, and miners will have to sell less coins to recover their costs". That's a logical fallacy, because the higher is going to be the BTC/USD, the more people will invest in mining hardware, making the amount of generated coins more distributed and in fewer quantity per individual miner/operation, thus the 3,600BTC generated per day will be probably dumped almost immediately, at least during the next few months, until the mining gold-rush is over and stabilizes, and the miners that are entering the ASIC game pay for their investment.

Thanks for the info, helps me to postulate here a bit more.

Well, it is becoming a much bigger gamble for miners. Their rigs will have no long term resale value as long as we have a very high or increasing difficulty. (Not to mention that there is talk of integrating Scrypt or a combination in the future, but that is just an unknown at this point.) I was close to ordering a Bitfury Rig (25Gh) for August delivery but I waited a few hours too long. 25Gh in August would have been good, but 25Gh for the same price in October would probably be bad and also very very risky. I still have a 7Gh on order from BFL but don't expect it till October, how do you think I feel? LOL  I knew this when I ordered it though and honestly, a big part of the order is I think it will be worth more in 10 years than now.     I do hope they allow upgrades (more) as the shipping date gets closer as the difficulty is going up and they will just have a lot of cancelled orders to deal with.

I do think quite a few of the miners have deep pockets as the cost of these rigs is getting higher and higher, so perhaps for some of them they will just hold ("hoard" is not appropriate here imo.)

3600 Coins are mined a day (25 per block, block=10 minutes=150hrX24=3600 per day) and that doesn't sound like too many coins (as long as we are growing). We have to look at the daily volume and find a reasonable percentage range that these coins will make up of it. So, let's say an average daily volume of 25,000, and into that we have to factor in 3600. Now, how many of those 3600 coins are sold daily into 25,000? If all are sold (which is not the case) we are talking only 14% and I think the market can absorb that. But, how much of that volume is day trading? Most of it? That changes things. What the market can't absorb is dumping by existing holders (from mining). Anyway, what is the true effect of potential sales here?...

[Rampion]

ATM everything is proceeding as expected.

Big bounce from the 200 day EMA, and then a longish period of "wait and see" (I said that as long as two weeks of sideways trading was expected, just as we had before the fast crash to $66).

Fiat in the order book increasing, coins decreasing. An important milestone will be the shipping of ASIC miners en mass. ATM they are just a few, and they still enjoy good profits. No need to dump all the coins on the market. That will change soon.

any advice for a bull turned bear looking on in horror as the train left him at 66?

Haha you must be new here. Everything went as expected, apart from everything that went wrong ofcourse.
Did you miss the part where he turned out to be the biggest clown of this part of the forum?
Letting monkeys throw darts will give you a better chance of success than listening to this delusional joker.

He really must be totally delusional beyond help as he's posting here how everything is going according to plan while he turned out to be a complete failure just a few days ago.
Sad really.

Sweet little Shroomsy, should I quote you the many posts in which I said that huge bounces are expected? You know that I bought at $68, do you?

[barbs]

these waters are far too calm for my tastes

[Rampion]

Yes, I guess I should quote about the traps (just check the dates, all these quotes are from the massive dip to $66 before the last trap, which started on July 6th):

Now, BTC is following a consistent downwards trend since April, 10th, full of bull traps and sucker rallies, but a consistent downwards trend nevertheless.

Now everybody is aware that BTC already survived a massive bubble deflation, so there are not so many "Bitcoin is a scam" believers. That and the bigger USD volume thrown at BTC during this bubble will make perma-bulls to live in a longer denial, thus lengthening their own suffering.

Still a couple of epic traps to go before despair and capitulation. I still don't think that the bear will last for multiple years as Birght Anarchist says, for sure many months to come, but 2/3 years seems a bit too much for BTC standards. Anyhow, BrightAnarchist got it right so far, let's grab some popcorn and see how this plays out.

Quickly wiring in some money so I can buy at the bottom.

Still way to go before the very bottom. Summer is still at the beginning. There will be bounces, traps can be long... Until another dump cycle begins.

Lots of dumps too, that last one was expensive though. Doubt they can afford to push it much lower without some big buys.

Bull traps are expected but bounces has been quite smallish during the crash from the $90s. I guess the big one will arrive soon... But nevertheless fear is taking over.

And the bounce finally arrived, the day after (July, 6th) - and that's why I bought at $68 to play that bounce. FYI: I already sold. Did you?

[CMMPro]

Those GPU's have no resale either....who is buying used computer electronics for more than 10c on the dollar?

Do you trust open packaged used product being sold presumably on eBay and craig's list? I know I don't trust that they are anything less than severely abused and possible non-functional. Every high end ATI for sale will be suspect to have been used in btc mining and run to the max for months on end...

The used market is/will soon be flooded with cheap powerful graphics cards and no GPU miner is getting out with any significant part of their investment back.

 

[MickeyT2008]

The used market is/will soon be flooded with cheap powerful graphics cards and no GPU miner is getting out with any significant part of their investment back.

I've been considering building a multi-GPU mining rig, even though it'll be barely profitable but cheap second hand cards would make a difference.  Here in the UK where we're getting badly ripped off over energy costs all the heat that such a rig kicks out in winter would be useful as opposed to waste - I'd just effectively be heating my house with electricity instead of gas and getting paid a little to do it too, rather than me having to pay a huge gas bill.  Maybe that's not what most miners want but in a country that's normally too cold for comfort it has to be taken into account.  (It'll be handy for gaming too)

Edit:  Obviously I'd have to mine something like Litecoin, with all these ASICs appearing mining SHA256 with GPUs won't get me very far

EDIT:  And I'll probably be waiting forever to get my 7GH/s miner from BFL, by then it'll be up against so many other ASICs that it'll be fairly useless.  Because of the way the mining difficulty increases with the rate that people mine at we should soon reach the point where the ASICs aren't producing any more BTC than the GPUs were before them, making the winners the companies that made them, not the people who bought them.  I wonder if it's possible to cancel that order....

EDIT:  Doesn't the increasing difficulty mean that the appearance of ASICs on the scene is nothing much for speculators to worry about, other than its effect on how other speculators behave?  All that's going to change in the long run is who gets to mine the coins, not how many they get.  It still doesn't make it like fiat currencies where the government just keep printing more (QE) and devalue the money that everyone already holds.  There's about 11 million coins already mined, no matter how good their ASICs they can never get more than 10 million more and that's not going to happen overnight either.

[ChartBuddy]

[Miz4r]

EDIT:  Doesn't the increasing difficulty mean that the appearance of ASICs on the scene is nothing much for speculators to worry about, other than its effect on how other speculators behave?  All that's going to change in the long run is who gets to mine the coins, not how many they get.  It still doesn't make it like fiat currencies where the government just keep printing more (QE) and devalue the money that everyone already holds.  There's about 11 million coins already mined, no matter how good their ASICs they can never get more than 10 million more and that's not going to happen overnight either.

The amount of coins mined each day doesn't change much with the appearance of ASICs, I agree with that part. However until ASICs are 'cheap' and abundant those newly mined coins will be distributed among fewer hands and those hands have expensive hardware and electricity costs to recoup. So I do think there will be more selling pressure from miners during this time of transition into the ASIC age, but you also shouldn't overestimate its influence on the price. There are much bigger forces in the market imo.

[barbs]

July 16, 2013 9:55 am "Bitcoin ETF plan struggles to find support"
 
In the $2tn market for exchange traded funds, they are calling it the “Winkle wrinkle”.
The recent proposal from the controversial Winklevoss twins to launch an ETF that tracks the volatile virtual currency known as Bitcoin has been met with scepticism from industry insiders.
The Bitcoin ETF will probably never hit the market because it is too difficult for “authorised participants” and “market-makers” – the banks and trading firms that typically sustain such funds – to profit from discrepancies between the underlying asset and the ETF, they say.
The suspicions cast over the proposed Bitcoin ETF are perhaps the starkest example yet of the complex cast of financial characters and motivations needed to launch investment vehicles that attempt to provide quick and easy access to sometimes esoteric and thinly traded assets.
“Bitcoin itself is not even a developed market, let alone to build an ETF on top of it,” says Reginald Browne, managing director at KCG Holdings, formerly Knight Capital, and a key figure in the development of the funds, which have surged in popularity over the past two decades.
Mom and pop investors, as well as larger institutional investors such as pension funds and insurance companies, have rushed into roughly 3,400 ETFs in recent years, using the vehicles that trade like stocks on exchanges to place their money into a wide range of assets.
The “Winklevoss Bitcoin Trust” will use fractions of the twins’ accumulated Bitcoin holdings to give investors greater exposure to the virtual currency, according to a regulatory filing made early this month. Investors would initially get exposure to one-fifth of a Bitcoin for each ETF share bought. The Winklevoss twins plan to sell 1m shares, giving the overall fund a $20m value.

A person familiar with the proposed Bitcoin ETF, which still needs to be approved by the US securities watchdog, says the fund has yet to recruit authorised participants, or APs. A spokeswoman for the Winklevoss twins, Tyler and Cameron, declined to comment on the matter.
Authorised participants are essential to building the funds since they create and redeem the ETF shares, usually in exchange for baskets of the underlying securities, from the ETF sponsor.
APs typically sign on to support ETFs because they believe they can profit by “arbitraging” small differences between the price of the fund’s shares and the underlying securities being tracked. “If the ETF price trades above the NAV [net asset value, or the value of the ETF’s securities], the APs buy the underlying assets in the market and convert them into ETF shares,” JPMorgan analysts wrote in a recent note. “On the other hand, if the ETF price trades at a discount relative to the NAV, the APs buy ETF shares in the market and redeem them for the underlying basket.”

That may prove difficult to do when it comes to Bitcoin, despite the Winklevoss’s claims that APs to the fund will “have an opportunity to realise a riskless profit” by arbitraging the price of the fund’s shares with the underlying price of the cyber coinage, ETF insiders say. Many Wall Street institutions remain suspicious of the virtual currency, especially now that it has attracted the scrutiny of various regulators. It may also be hard to encourage big financial institutions that typically act as APs to trade such an uncommon asset as a crypto-currency.
ETF experts estimate there are roughly four dozen APs in the market. These include: Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, KCG, Morgan Stanley, Nomura, Société Générale, UBS and Virtu Financial, which specialises in high-frequency trading.
“Most ETFs are going to have somewhere between five and 20 [APs],” says the head of ETFs at one large investment bank. Some market-watchers are worried that APs may choose not to support ETFs in times of intense market stress. Last month at least one authorised participant suspended redemptions on ETFs after bumping up against its own internal risk limits during an intense sell-off in the market.

“There’s not a lot of legal responsibility [in being an AP],” says the investment bank’s head of ETFs, meaning most of them act as “at will” participants. “It’s the combination of the real time arbitrage with the ability to balance out your inventory that’s really the basis of the ETF market.”

Still, many ETF issuers, market-makers and APs insist they will be there to support the exchange traded funds, even in turbulent times. Many expect that during bouts of intense market volatility, the price discrepancies between ETF shares and their underlying securities will simply intensify until they attract APs back into the arbitrage trades at the heart of ETF mechanics.
“I don’t think we’re ever going to have a situation where everyone just decides we don’t want to make money,” says one AP who declined to be named. When it comes to the Bitcoin ETF, however, that moneymaking opportunity for Wall Street banks and trading firms is harder to find.

Mr Browne, of KCG, says of the Bitcoin ETF: “There has to be some investment merit to bring an ETF to the marketplace and without that it is not going to be successful. Investors won’t expand it, market-makers can’t trade it.”

[ChartBuddy]

[marvinrouge]

ETF experts estimate there are roughly four dozen APs in the market. These include: Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, KCG, Morgan Stanley, Nomura, Société Générale, UBS and Virtu Financial, which specialises in high-frequency trading.

The banks don't want to support Bitcoin ? What a scoop  

[wachtwoord]

Banks are market makers here to make money. They will be able to make money in this (despite the bs in the article) and therefore will participate.

[justusranvier]

Does David Malki read the Speculation forum here?

[ChartBuddy]

[Cablez]

If the invested funds was taken from BTC savings they want BTC back, not FIAT.

I would have to agree with this.  +1

[ShroomsKit]

It looks like that is before us quite an interesting moment.

Break Up or Down or side (this is similar to Down if top left) ?

Hold on! Are you saying we either go up, down or sideways?!
That's one amazing analysis!

[Richy_T]

Those GPU's have no resale either....who is buying used computer electronics for more than 10c on the dollar?

Do you trust open packaged used product being sold presumably on eBay and craig's list? I know I don't trust that they are anything less than severely abused and possible non-functional. Every high end ATI for sale will be suspect to have been used in btc mining and run to the max for months on end...

The used market is/will soon be flooded with cheap powerful graphics cards and no GPU miner is getting out with any significant part of their investment back.

 

The reality doesn't matter, the perception does.

[Dalib]

It looks like that is before us quite an interesting moment.
Break Up or Down or side (this is similar to Down if top left) ?

Hold on! Are you saying we either go up, down or sideways?!
That's one amazing analysis!

I do not predict the development that we see during the day.
I wanted "only" to highlight the point that tell us more about further development and that increases the likelihood of possible options.
But in my opinion we can:
stay bellow the resistance with side movement for a few hours or days (40:60)
correct current top to down after 50% bounce (35:65)
or continue rally over 104 (25:75)
 

[ChartBuddy]