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

[ampere9765]

i said all other things equal. meaning that those with the same foresight to invest in bitcoin have much smaller holdings by virtue only of the twins being born into wealth.

bullshit. They got their bitcoin money from their Facebook settlement, another case of their foresight.

maybe that's true. though their father was a renowned author and ran a very successful investment firm since decades prior. their harvard and oxford educations were not funded by facebook settlement.

weren't you the one going off a few days ago about statism? yes i agree, it was foresight to use state institutions to enforce their nonexistent IP rights.

[Peter R]

Jorge, I just simulated a bunch of log-brownian time series in Mathematica, and I can never reproduce anything that looks close to the "growth spurt" pattern we see in bitcoin's historical price graph.  The problem with your model is that it ignores the true network dynamics at play, and therefore misses the most important features.    

I think it was Myron Scholes who used log-Brownian motion and the what's now known as the Black-Scholes equation to come-up with *optimal* pricing equations for financial derivative products (options, etc).  He was a key member of the hedge fund "Long Term Capital Management" the spectacularly collapsed in 1998 and was bailed out by the Fed.  

I think it's funny when I read about stochastic differential equations in economics as though they have the same kind of reliability and validity as the same mathematical techniques applied to a problem in physics or signal processing.  

Is it not clear to the world yet that economics is not a hard science?

[BitChick]

Sorry this is off topic, but supposedly BTC China is taking deposits again.  Why is there no increase in volume on their site (besides the short lived Bot exchange yesterday)?

[billyjoeallen]

I'm starting a business as a Bitcoin consultant. There's so much work to be done building the infrastructure.  

Yeah, I thought about that too. But then I don't really know what to do, lol!

Basically, I just tell people what bitcoin is, correct misconceptions, how it works and what their options are. My focus is more on merchants than investor/speculators, because it's merchant adoption that will be the catalyst for mainstream adoption.

[Miz4r]

Sorry this is off topic, but supposedly BTC China is taking deposits again.  Why is there no increase in volume on their site (besides the short lived Bot exchange yesterday)?

Because it's a holiday there, banks are closed so also no deposits coming in right now.

[BitChick]

Sorry this is off topic, but supposedly BTC China is taking deposits again.  Why is there no increase in volume on their site (besides the short lived Bot exchange yesterday)?

Because it's a holiday there, banks are closed so also no deposits coming in right now.

Don't they know New Years Day was 30 days ago!?    

[ampere9765]

i'm not sure we will see much of an uptick in btcchina volume. they'd have to take it back from huobi, who is charging no fees. i don't see maker taker changing the equation.

[BitChick]

i'm not sure we will see much of an uptick in btcchina volume. they'd have to take it back from huobi, who is charging no fees. i don't see maker taker changing the equation.

I would think it could encourage those that sold after the "announcement" that BTC was a "safe" investment again if BTC China was now accepting deposits again.  I think there is a psychological component to people buying and selling.   But we will see.  I would think it couldn't hurt for there to be another exchange open.

[ampere9765]

i'm not sure we will see much of an uptick in btcchina volume. they'd have to take it back from huobi, who is charging no fees. i don't see maker taker changing the equation.

I would think it could encourage those that sold after the "announcement" that BTC was a "safe" investment again if BTC China was now accepting deposits again.  I think there is a psychological component to people buying and selling.   But we will see.  I would think it couldn't hurt for there to be another exchange open.

i think there is more to the story of past price movement than people selling off after the Dec 5 announcement.

also, i can't imagine that bobby lee's statement instills much confidence. "i am confident that we are not illegal" LOL...

[shmadz]

Happy Chinese New Year. Wonder where the horse will take us, but I am very tempted to go all in at this time.

I think I might wait for the year of the Goat

I'm so waiting for this.

I'm going to have to host a massive party somewhere

Looking forward to RSVP'ing my invitation!  

[bqxpd]

But the one thing I can't figure out is what caused the dip (see below) this last summer.  I believe a lot of people (myself included) think we will see something like this play out again.  But does anyone have a rational explanation for why this might have happened in the first place?  I remember this moment well: everyone on local bitcoins in Vancouver was sold out of coins (or asking ridiculous premiums) which I thought was odd (it was as though it was clear to everyone that the price was too low).

Actually, there's no mystery about what caused that dip -- Gox officially suspended withdrawals on June 20th. The market began dropping immediately on the news as people speculated that Gox was going under. The price bottomed out at 66, bounced back at about the same rate it had fallen, then resumed the pre-news trend of meandering around 100 before ultimately heading upward and into the November rally.

[billyjoeallen]

Price is generally sticky, it is due to human psychology, people are most happy to pay today what they paid yesterday. It was sticky at $1, $10, $20, $100 and now here, but the pressures building beneath remain relentless http://www.bitcoinpulse.com/ coinbase now at 10,000 wallets per day and blockchain.info ~6,000 per day

Eventually the building demand pressure overwhelms the stickiness and demand outstrips supply at the margin and then we need to re-adjust price to reflect the new reality that has built up in the time that the price has been stuck, hence the volatility. It is not going to be smooth climb up to to saturation level pricing because humans are human.

I agree with the dynamic you described above.

I would add that presently we have two forces at play:

-  new buyers who entered the market Nov-Jan, excited after learning about the potential of bitcoin, wanting to increase their positions (perhaps they initially invested only a couple hundred $ just to get their feet wet)

     VS

- people who are now sitting on large gains, waking up in a cold sweat in the middle of the night one night with the epiphany "hmm, I now have $100,000 worth of BTC and $5,000 of cash in the bank.  I believe more than ever in bitcoin, but perhaps I should diversify just in case."

Eventually the people sitting on large gains have diversified enough to sleep soundly, but the new buyers keep entering the market and buying and we get a new leg up...  


But the one thing I can't figure out is what caused the dip (see below) this last summer.  I believe a lot of people (myself included) think we will see something like this play out again.  But does anyone have a rational explanation for why this might have happened in the first place?  I remember this moment well: everyone on local bitcoins in Vancouver was sold out of coins (or asking ridiculous premiums) which I thought was odd (it was as though it was clear to everyone that the price was too low).

I wonder about that dip too. It may be hodlers who were forced to sell for cash flow reasons even though they believed the price was going to go up or remain stable.  This worries me a little bit, because I am a medium-sized hodler with negative cash flow. There's a finite amount of time I can hodle before I start to slowly drain my portfolio, and I don't think I'm alone.  Fortunately, I keep getting zero APR credit card applications in the mail, so chances are I can hodl out for over a year or two if necessary-but I'm not selling this time because I can always get a second job if I have to.

My guess is right now, there is more pressure on the bears in short positions who will slowly start to close out their short positions if the price continues to go sideways.

[JorgeStolfi]

PS. Besides the fat tails for small n, there is another conspicuous feature of the data that the log-Brownian model does not capture.

Looking at a plot of the increments Z(i+1)-Z(i) as a function of i, it seems evident that the the typical magnitude of the increments changes markedly but slowly over a time scale of several hours.   That is, there are periods when the increments are quite large, other periods when they are quite small; even though in both cases they seem to be equally random and independent.  (These slow  variations in the standard deviation may perhaps account for the long tails of the global distribution).

The periods when the increments are larger seem to correlate (not surprisingly) with the periods when the trade volume per hour is larger.   Thus the following model may be more acurate:

  Z(i+1) + Z(i) + B*V(i)*RAND(i)

where V(i) is the trade volume in the sampling interval i, and B is another constant (that measures how much the price is disturbed, in the rms average sense, whenever one BTC gets traded).  Note that if the volumes V(i) are nearly constant then this is the same as the simpler model, with C = B*V(i).

If this hunch is correct, then one should perhaps describe the price changes in terms of a "volume clock", instead of the usual time clock.

That is, let's define the "accumulated volume" as the total amount of BTC traded between some fixed reference time in the past to each subsequent time.  Let's write Q(v) for the price when the accumulated is v, and let Y(v) be log_10(Q(v)).  Then the log-Brownian model in "volume clock" predicts that

  Y(v+w) = Y(v) + E*sqrt(w)*RAND(v,w)

where E is a constant, and RAND(v,w) are random variables (not independent) with zero-mean, unit-variance Gaussian distribution.

This model may yield tighter confidence intervals for the future price Q(v+w).  However, it does not predict the price range after n hours in the future, but rather after an additional w bitcoins will have been traded.   

[BitChick]

i'm not sure we will see much of an uptick in btcchina volume. they'd have to take it back from huobi, who is charging no fees. i don't see maker taker changing the equation.

I would think it could encourage those that sold after the "announcement" that BTC was a "safe" investment again if BTC China was now accepting deposits again.  I think there is a psychological component to people buying and selling.   But we will see.  I would think it couldn't hurt for there to be another exchange open.

i think there is more to the story of past price movement than people selling off after the Dec 5 announcement.

also, i can't imagine that bobby lee's statement instills much confidence. "i am confident that we are not illegal" LOL...

Well, at least it gives them someone to point fingers at.  Bobby Lee said. . . 

[shmadz]

What are folks planning on doing with themselves if there are months of sideways movements? Will you dabble in altcoins? Start a Bitcoin business? Drive yourself to despair trying to trade a $700-850 gap or just set an alarm for when there's an explosion?

I've realised that excitement in either direction is what's keeping me here more than financial gains, not that they're to be sniffed at.

During months of stagnation I do pretty much the same as usual. mine coins, hoard 90% and send the rest to the exchange for speculation.

The only thing that changes is that I tend to sell more coins during these times in order to keep my exchange account roughly balanced so that I'm ready for the eventual move to either side...

[shmadz]

had some fun with charts.



 

I can't find the coin cheapness indacator on bitcoinwisdom??

where can I find a place that charts this indacator?

It is the most accurate indacator for deciding when to buy and sell that I have ever seen!

[billyjoeallen]

But the one thing I can't figure out is what caused the dip (see below) this last summer.  I believe a lot of people (myself included) think we will see something like this play out again.  But does anyone have a rational explanation for why this might have happened in the first place?  I remember this moment well: everyone on local bitcoins in Vancouver was sold out of coins (or asking ridiculous premiums) which I thought was odd (it was as though it was clear to everyone that the price was too low).

Actually, there's no mystery about what caused that dip -- Gox officially suspended withdrawals on June 20th. The market began dropping immediately on the news as people speculated that Gox was going under. The price bottomed out at 66, bounced back at about the same rate it had fallen, then resumed the pre-news trend of meandering around 100 before ultimately heading upward and into the November rally.

Ok, that makes sense. I wasn't really following the day-to-day news during that period. Diversifications of exchanges is a very good development IMHO because MtGox was such a bottleneck and potential single point of failure. The beauty of the free market is that every problem is a potential entrepreneurial opportunity. Mark's incompetence as a CEO actually ended up helping the industry.

[MatTheCat]

I'm starting a business as a Bitcoin consultant. There's so much work to be done building the infrastructure.  

A Bitcoin Consultant!?

But you are a Bitcoin Nutter and since I have became aware of you, you have been nothing but wrong.

I wish you all the best on your new venture but I think I shall pass on your services thankyou very much.

I can't find the coin cheapness indacator on bitcoinwisdom??

where can I find a place that charts this indacator?

It is the most accurate indacator for deciding when to buy and sell that I have ever seen!

Ah, that'll be the 200 day MA. Last two crashes, Bitcoin price eventually dipped below this line.

It is currently running in $300 - $400 range should Bitcoin pay it a visit in the next few weeks.

[MatTheCat]

Noch ein Doppelpost.

[ampere9765]

But the one thing I can't figure out is what caused the dip (see below) this last summer.  I believe a lot of people (myself included) think we will see something like this play out again.  But does anyone have a rational explanation for why this might have happened in the first place?  I remember this moment well: everyone on local bitcoins in Vancouver was sold out of coins (or asking ridiculous premiums) which I thought was odd (it was as though it was clear to everyone that the price was too low).

Actually, there's no mystery about what caused that dip -- Gox officially suspended withdrawals on June 20th. The market began dropping immediately on the news as people speculated that Gox was going under. The price bottomed out at 66, bounced back at about the same rate it had fallen, then resumed the pre-news trend of meandering around 100 before ultimately heading upward and into the November rally.

however, bears at that time would have asserted that the downtrend began considerably earlier than the june 20th suspension. as evidenced by the chart.