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

[Dotto]

It would be interesting to see a trading volume comparison (and liquidity comparison) of the NOV 2013 bubble verse this recent run up...

If I had to guess, the increased liquidity makes it a bit more difficult to crash/"manipulate" the market today, in an attempt to induce panic and profit off a quick move.  For example, imagine someone attempting to do that via market sell on, say, Bitfinex.  That might have worked quite will in Nov 2013, since practically only Mt Gox would need follow suit.  If it did follow suit, mad profits on the 40% panic dumps   I imagine it's far more difficult today, given the distribution of liquidity across so many licensed exchanges.  And the rise of heavy future markets (okcoin, etc.).  And, of course, false signal breakouts, one could argue, are somewhat less likely, since most traders are watching technicals on many exchanges and using that to paint a more complete picture.  For example, Huobi would generally not breakout if US exchanges were going in a different direction or overly stagnant.  Why?  Huobi traders are "aware" that they don't control the market, and that it's far more distributed today.  They could control the market in 2013.

It's certainly a very different market than it was 3 years ago (or even a year ago, for that matter).  I see a lot of the same anxieties, and traders would by wise to acknowledge the dynamic nature of these markets.  This is an entire emerging asset class (crypto-currencies).  With increased participation and liquidity, the same "tricks" that may have worked years ago may be far more difficult, or damn near impossible, today.  Many traders are trading Bitcoin too much, or too actively, for today's market.  They're reading signals left and right, over short time intervals, when it's just noise and, statistically speaking, meaningless.  Meaningless on the adrenaline pumping time scales many look at (5m charts, lol).  And, by extension, meaningless over the mid/long term.

Great analisys, let the noise continue...

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[arctos]

How many time zones does China have? .. I guess Beijing isn't the first place where its morning there from what I know and see on the map.. right? ... or they have one of those dumb systems where its the same hour all over the country?

i'm pretty sure they use 1 timezone in the whole country, even though the country itself is in multiple timezones.

must suck for those who live in the east, need to get up really early.

That's backed up by this site. China has five time zones but it only uses one standard time. However that quoted explanation doesn't make sense to me, how can China cover five time zones, but the Chinese Mainland, Hong Kong, Macau, and Taiwan Province all be in the same time zone?

https://www.travelchinaguide.com/essential/time_difference.htm

Geographically, China covers five time zones (Zhongyuan, Longshu, Tibet, Kunlun and Changbai Time Zones). However, the standard times used in Chinese Mainland, Hong Kong, Macau, and Taiwan Province are the same, for they are all in the same time zone (UTC+8), 8 hours ahead of the Universal Time Coordinated.

all one time zone.

either way, the vast majority of the money is on the coast no further inland than the north/south train lines

[mr angry]

How many time zones does China have? .. I guess Beijing isn't the first place where its morning there from what I know and see on the map.. right? ... or they have one of those dumb systems where its the same hour all over the country?

i'm pretty sure they use 1 timezone in the whole country, even though the country itself is in multiple timezones.

must suck for those who live in the east, need to get up really early.

That's backed up by this site. China has five time zones but it only uses one standard time. However that quoted explanation doesn't make sense to me, how can China cover five time zones, but the Chinese Mainland, Hong Kong, Macau, and Taiwan Province all be in the same time zone?

https://www.travelchinaguide.com/essential/time_difference.htm

Geographically, China covers five time zones (Zhongyuan, Longshu, Tibet, Kunlun and Changbai Time Zones). However, the standard times used in Chinese Mainland, Hong Kong, Macau, and Taiwan Province are the same, for they are all in the same time zone (UTC+8), 8 hours ahead of the Universal Time Coordinated.

all one time zone.

either way, the vast majority of the money is on the coast no further inland than the north/south train lines

But some of the biggest Bitcoin mines are in Mongolia. They mine so many Bitcoins a week they can move the market whenever they choose. Those mines must be earning so much money that they can decide to buy or sell to make the market do whatever they want.

[SheHadMANHands]

Great analisys, let the noise continue...

Indeed...  Reminds me a little of the shifting online poker landscape.

In 2008, you'd take a virtual "seat" at a 6-handed online table, with 4 complete amateurs ("fish") and maybe 1 other competent player.  By 2012, you'd be lucky if you found one amateur at your table (assuming it wasn't you).  The easy money exploiting others at the table was gone.  The games were becoming more efficient and more transparent.  The large exploits that worked so well began working dramatically less.  In many cases, the outcome would be an almost hostile, and in some cases self-destructive, spatting between the competent players.  This led to significant spikes in variance, as aggression between those competent players picked up, naturally, and theoretical win rates began falling off.  Amateurs eventually went "bust" or learned a lesson.  In No Limit, those lessons come quickly and relentlessly.

If the "sharks" in crypto-currency are the traders and speculators, both at the individual and institutional level, they're certainly swinging at each other now.  I would cite the high variance and back and forth battling we've seen over the past ~week, with the price sliding up and down $20 regularly like it's nothing.  The amount of capital required now to push the market around is probably an order of magnitude higher, if not more, than when the exchanges were Mt Gox, Bitfinex and a few poorly understood Chinese exchanges.  Naturally, there is less fear when there's more liquidity and more order books.  It's easy when there's only one exchange that needs follow a move.  Much more difficult when there's 10 exchanges, some with banking charters.  

[JayJuanGee]

too many people are sniffing hopeium. $1000 looks to be the majority's picking. I think its a sign to short btc. I could be wrong though.

People are saying it's going to be less than $1000.. I think anyone who said that is right.

Nothing is for sure in bitcoin.


1st phase was breaking passed the upper $400s, which we have done which seems very likely to bring us to about the mid 600s.. if the run goes better than anticipated, then could take us to the upper $700s.

if we break through well into the $800s then it becomes likely that we are going to go into the $3k to $5k arena.....


Yes, nothing is inevitable, so this earlier run could go better or worse than expected and the same is true for the next run.

[SheHadMANHands]

With the games drying up, online poker professionals anticipated that other professionals would be what they'd need overcome to make a living.  Many of them focused their attention then on challenging these other professionals, with more aggressive strategies and so forth.  Ironically, it was really the poor fundamental understanding, and appreciation, of variance, and how it was dramatically influenced by the changing landscape, that led to the down fall of many.  What was once a clearly definable, theoretical win rate from a sample size of ~20k dealt hands all of a sudden took 2,000,000 hands.  And even then it wasn't obvious.

Traders should probably adjust appropriately, with the expectation that their theoretical "win rate" (percentage of time they're correct), at least from years ago, has almost certainly dropped.  Bigger market means bigger sharks.  And whales.  A Joe Blow with 20k bitcoins in 2013 could get to work and cause some damage.  Now, unfortunately for him, he can't.  He should trade less frequently, else be busted by trading fees and... variance.  Variance is a bitch.  And almost always underestimated from intuition.

[Assmaster2000]

In 2008, you'd take a virtual "seat" at a 6-handed online table, with 4 complete amateurs ("fish") and maybe 1 other competent player.  By 2012, you'd be lucky if you found one amateur at your table (assuming it wasn't you).  The easy money exploiting others at the table was gone.  The games were becoming more efficient and more transparent.  The large exploits that worked so well began working dramatically less.  In many cases, the outcome would be an almost hostile, and in some cases self-destructive, spatting between the competent players.  This led to significant spikes in variance, as aggression between those competent players picked up, naturally, and theoretical win rates began falling off.  Amateurs eventually went "bust" or learned a lesson.

But did those poker amateurs have powerful scientifical tools like Technical Analysisis? How about Eliot Brainwave Transmutaion?
Yeah, we got science, bitch! That's why recreational trading will always stay highly profitable for us ("fish") bitcoin enthusiasts.

[SheHadMANHands]

In 2008, you'd take a virtual "seat" at a 6-handed online table, with 4 complete amateurs ("fish") and maybe 1 other competent player.  By 2012, you'd be lucky if you found one amateur at your table (assuming it wasn't you).  The easy money exploiting others at the table was gone.  The games were becoming more efficient and more transparent.  The large exploits that worked so well began working dramatically less.  In many cases, the outcome would be an almost hostile, and in some cases self-destructive, spatting between the competent players.  This led to significant spikes in variance, as aggression between those competent players picked up, naturally, and theoretical win rates began falling off.  Amateurs eventually went "bust" or learned a lesson.

But did those poker amateurs have powerful scientifical tools like Technical Analysisis? How about Eliot Brainwave Transmutaion?
Yeah, we got science, bitch! That's why recreational trading will always stay highly profitable for us ("fish") bitcoin enthusiasts.

Haha, it's socially acceptable modern degeneracy and legal gambling.        

Crazy when you think about it...  Fan Duel taking all the heat.  "Gambling is bad, mmmkay."  Yet anyone can go margin long Dogecoin or MaidSafeCoin, then flip it and go all-in short Litecoin 5 minutes later, then 3x Bitcoin long 2 minutes after that.  LOL

[windjc]

Great analisys, let the noise continue...

Indeed...  Reminds me a little of the shifting online poker landscape.

In 2008, you'd take a virtual "seat" at a 6-handed online table, with 4 complete amateurs ("fish") and maybe 1 other competent player.  By 2012, you'd be lucky if you found one amateur at your table (assuming it wasn't you).  The easy money exploiting others at the table was gone.  The games were becoming more efficient and more transparent.  The large exploits that worked so well began working dramatically less.  In many cases, the outcome would be an almost hostile, and in some cases self-destructive, spatting between the competent players.  This led to significant spikes in variance, as aggression between those competent players picked up, naturally, and theoretical win rates began falling off.  Amateurs eventually went "bust" or learned a lesson.  In No Limit, those lessons come quickly and relentlessly.

If the "sharks" in crypto-currency are the traders and speculators, both at the individual and institutional level, they're certainly swinging at each other now.  I would cite the high variance and back and forth battling we've seen over the past ~week, with the price sliding up and down $20 regularly like it's nothing.  The amount of capital required now to push the market around is probably an order of magnitude higher, if not more, than when the exchanges were Mt Gox, Bitfinex and a few poorly understood Chinese exchanges.  Naturally, there is less fear when there's more liquidity and more order books.  It's easy when there's only one exchange that needs follow a move.  Much more difficult when there's 10 exchanges, some with banking charters.  

While this is a neat analogy and may have some truth, another truth remains in the current trading landscape currently and that is that China leads. In fact China has led since at least late 2013, early stages of bubble #2 that year.

China is also easily influenced by things like devaluation of the CNY.  So patterns are still relatively easy to spot and understand. However, if you are just scalping maybe its more difficult, but longer term plays, are still pretty easy in my opinion.

[dumbfbrankings]

They dance well together, no?

[SheHadMANHands]

Great analisys, let the noise continue...

Indeed...  Reminds me a little of the shifting online poker landscape.

In 2008, you'd take a virtual "seat" at a 6-handed online table, with 4 complete amateurs ("fish") and maybe 1 other competent player.  By 2012, you'd be lucky if you found one amateur at your table (assuming it wasn't you).  The easy money exploiting others at the table was gone.  The games were becoming more efficient and more transparent.  The large exploits that worked so well began working dramatically less.  In many cases, the outcome would be an almost hostile, and in some cases self-destructive, spatting between the competent players.  This led to significant spikes in variance, as aggression between those competent players picked up, naturally, and theoretical win rates began falling off.  Amateurs eventually went "bust" or learned a lesson.  In No Limit, those lessons come quickly and relentlessly.

If the "sharks" in crypto-currency are the traders and speculators, both at the individual and institutional level, they're certainly swinging at each other now.  I would cite the high variance and back and forth battling we've seen over the past ~week, with the price sliding up and down $20 regularly like it's nothing.  The amount of capital required now to push the market around is probably an order of magnitude higher, if not more, than when the exchanges were Mt Gox, Bitfinex and a few poorly understood Chinese exchanges.  Naturally, there is less fear when there's more liquidity and more order books.  It's easy when there's only one exchange that needs follow a move.  Much more difficult when there's 10 exchanges, some with banking charters.  

While this is a neat analogy and may have some truth, another truth remains in the current trading landscape currently and that is that China leads. In fact China has led since at least late 2013, early stages of bubble #2 that year.

China is also easily influenced by things like devaluation of the CNY.  So patterns are still relatively easy to spot and understand. However, if you are just scalping maybe its more difficult, but longer term plays, are still pretty easy in my opinion.

Agree that longer term plays are still relatively easy.  Those would be the high "win rate" plays.  Losing edge on the shorter term plays will have a dramatic influence on variance tho.  It's where the bodies are buried !  A slow leakage, that slowly hastens in time due to excess activity.  The analogy being to the online poker player that met his own eventual demise by being overly aggressive and too "active" with other very competent players.  Variance skyrocketed with few people noticing or fully appreciating it.  Some of these otherwise competent players went bust from an extended "cold streak", farther stretched than anticipated.  Some of them had a "hot streak" of course, which only instilled a false sense of confidence in one's "game" and talents.  Those players would move up in stakes rapidly, with that confidence, before the variance would inevitably bite them in the ass.  

Least in Bitcoin there's a simple solution, focus on the higher win rate plays which sometimes require sitting tight.  Don't fly too close to the sun.

[Assmaster2000]

@dumbfbrankings: Yeah, a bit exaggerated by top one being BTC/USD, bottom being ETH/BTC (if ETH stayed flat rel USD, you'd see the same inverse/mirror image thing. The fact that ETH went up by 5.76% is just gravy)

[dumbfbrankings]

@dumbfbrankings: Yeah, a bit exaggerated by top one being BTC/USD, bottom being ETH/BTC (if ETH stayed flat rel USD, you'd see the same inverse/mirror image thing. The fact that ETH went up by 5.76% is just gravy)

A good point.

The liquidity is the interesting part to me. Fair number of trades taking place to balance that closely. Something you don't see with the lesser alts.

[WeltMaster]

are we rich yet

[JayJuanGee]

Great analisys, let the noise continue...

Indeed...  Reminds me a little of the shifting online poker landscape.

In 2008, you'd take a virtual "seat" at a 6-handed online table, with 4 complete amateurs ("fish") and maybe 1 other competent player.  By 2012, you'd be lucky if you found one amateur at your table (assuming it wasn't you).  The easy money exploiting others at the table was gone.  The games were becoming more efficient and more transparent.  The large exploits that worked so well began working dramatically less.  In many cases, the outcome would be an almost hostile, and in some cases self-destructive, spatting between the competent players.  This led to significant spikes in variance, as aggression between those competent players picked up, naturally, and theoretical win rates began falling off.  Amateurs eventually went "bust" or learned a lesson.  In No Limit, those lessons come quickly and relentlessly.

If the "sharks" in crypto-currency are the traders and speculators, both at the individual and institutional level, they're certainly swinging at each other now.  I would cite the high variance and back and forth battling we've seen over the past ~week, with the price sliding up and down $20 regularly like it's nothing.  The amount of capital required now to push the market around is probably an order of magnitude higher, if not more, than when the exchanges were Mt Gox, Bitfinex and a few poorly understood Chinese exchanges.  Naturally, there is less fear when there's more liquidity and more order books.  It's easy when there's only one exchange that needs follow a move.  Much more difficult when there's 10 exchanges, some with banking charters.  

While this is a neat analogy and may have some truth, another truth remains in the current trading landscape currently and that is that China leads. In fact China has led since at least late 2013, early stages of bubble #2 that year.

China is also easily influenced by things like devaluation of the CNY.  So patterns are still relatively easy to spot and understand. However, if you are just scalping maybe its more difficult, but longer term plays, are still pretty easy in my opinion.

Haven't been seeing you post in this WO thread for a while.   You been trading BTC the last couple of years?

Regarding China leading everything and leading since 2013, seems like you may still be in either 2013 or 2014.

That kind of characterization of bitcoin price dynamics is way too simple and inaccurate and could likely lead to mistaken price predictions in a large number of scenarios - especially in current times.

I will concede to you that sometimes it can be quite difficult to determine what event caused what when the price moved, and if there is merely a correlation relationship rather than a causation relationship.  Probably, since at least mid-2014, the west seems to have become quite a bit more skeptical about following china's price movement and skeptical of their purported volume on various exchanges.  Furthermore, the bitcoin space has become quite a bit more developed and complicated in terms of both on exchange and off exchange liquidation opportunities and investment vehicles.. and even in recent times having some ETH dynamics in actual physical relationship and in terms of the degree to which ETH has been touted in various regards in the press as BTC competition.

Anyhow I think that there's a lot of BTC price influences - and surely your underlying thesis regarding probable ongoing BTC price manipulation (and attempts at such) coming from various sectors will like continue to take place on a fairly significant level at least until BTC achieves about an additional 100x market cap increase (if that in the coming), which would put us close to a $1trillion market cap.  Not impossible to manipulate price, but a bit more difficult than the current status.

[DaRude]

Cost of production is doubling in less than a month ... that will set the new floor for bitcoin price to the $840-960 range (at the minimum without difficulty increases) in the medium term.

Cost of production for a monetary good is the economic defence against counterfeiting.  While gold is money, and sometimes attracts a monetary premium substantially above it's cost of production, for someone to produce gold "from nothing" they need to expend an equivalent amount of resources to the cost of production.  Over long terms the price of the monetary good may be attracted to its cost of production but ultimately that is as cheap as you can acquire it for, as long as it is still desirable as a monetary good.  For the same reason the lowest value of fiat paper money is the cost of the paper it is printed on and the ink, i.e. it's cost of production (about a few cents for a $100 bill).

While bitcoin is still valued as a monetary good, that can be transported in minutes across the internet as a final settlement for bearer instruments exchanged on a censorship-resistant network, it still needs to defend against counterfeiting.  The cost of production defends against counterfeiting since this is as cheap as you can produce bitcoin.  If bitcoin becomes more desirable for other reasons of its utility, such as store of value, medium of exchange (network effect increasing), etc., then it may easily attract a monetary good premium on top of the cost of production, but the cost of production has invariably set the floor for the lower bound on bitcoin prices, as long as it has remained a monetary good.

Bitcoin is still monetising.

agreed, the lower boundary of the rpcie is the production cost.

It could accidentally be below this value for a short time, but never for long.

The upper boundary is pretty much unlimited (limited only by the amount of value we can exchange for it). So the absolute upper value would be everything in the world divided by the amount of bitcoin in circulation. Of course we would never quite reach that value, but that would be the absolute upper limit it could never go above.

Ughh ingenious   following that logic lets
Step 1: Increase difficulty 10x fold, thus increasing cost of production for all miners 10x
Step 2:
Step 3: Bitcoin to da moon???

Just have to somehow get the note to investors for them to check the current productions costs before they decide the utility value of BTC and how much they should be willing to pay for BTC

 A transaction has 2 sides, a buyer and a seller

Let's assume some people sell for less than the cost of production, eventually they will run out of coins to sell, and the only new coins on the market will be either coins that were bought before and resold (usually t a higher price, because no one would like to sell for less than they bought for, unless forced to do so). Or freshly mined coins, that well sell at least at the price of production, unless the miner is forced to sell for lower to cover his expenses, but if a miner continually sells at a loss, mining will be unprofitable for him, so eventually he'll be forced to quit.

Therefore, over time, the price will reach at least the price of production, because those who sell for less than that will run out of coins to sell.

I don't know how I can explain it any simpler.

No no and again no, seller doesn't set the price buyer does. Market couldn't care less what seller likes or doesn't like. Here's the price someone is willing to buy the BTC you produced if that's not profitable for you, you go out of business, you go out of business there's less hash power dificulty adjust all other miners are that tiny bit more profitable. Rinse and repeat.

On a separate note, everyone ignoring that BTC5k sell wall @ $576

Ok, I'd like to buy all your bitcoins for $1 each.

Also, if you happen to have any gold, i offer $0.01 per gram of gold.

I'd also like to buy both your house and your car for a combined price of $3

You see? Nobody would accept such offers because they're complete garbage offers, way below the price the seller wants for them, So the seller chooses not to sell.

The price has to be agreed between buyer and seller, if one of them does not agree, the trade is off.

If you don't even understand this, don't bother replying, because i'd be better of talking to a banana peel.

The demand doesn't come from one buyer but from market as a whole, as a seller obviously i choose the highest bidder. Why would i sell it to you for $1 when someone else is willing to pay $575? Now i'd prefer to sell it for $10,000 each because i bought a bunch of these USB miners from my local retail store and my cost of electricity is sky high, but somehow i doubt that any buyer cares much about that. Miners must sell, and don't have an option not to because they don't like the price. Otherwise they become investors and carry additional FX exposure risk on their "inventory" (assuming utilities, salaries, equipment, is purchased with other currency). They're not kids mining in parents garage that can choose not to sell if they don't like the price, and somehow get a consortium going where everyone other miner does the same.

Your line of though only works if all (or majority) of miners collaborate together in kind of an oligopoly (think OPEC) and agree to artificially restrict supply bellow certain price, and even that probably won't work for long.

Or to use your example: I want to buy BTC from you for $575, you want to sell it for $1000 and explain how your cost of production is so high. I wish you good luck finding an idiot that cares, and just wait after you lower the price to my buy range or invest in something else. After spending few days trying to convince people to buy it for $1000 because of your high production cost you give up or get hungry or need to pay the electricity bill and sell it to the highest bidder. The fall in your logic is that it doesn't account for difficulty adjustments and that it can scale down.

[marcus_of_augustus]

yes, any day now difficulty will be dropping and my 2 netbooks will make me a fortune again ...

[USB-S]

are we rich yet

We can't seem to figure out the calibration in between the sizes of blocks and why does Chinese seamen make great volume. Can you help us?

[BlindMayorBitcorn]

^Is he havin' a laugh?

*Are you havin' a laugh?

[USB-S]

^Is he havin' a laugh?

*Are you havin' a laugh?