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

[Elwar]

Would be great if those that want to do block size discussion would make a note at the beginning of their post like:
Block Size Discussion:

That would help a lot in skipping posts easier. Thanks.




Or...discuss it in a separate thread...like in an appropriate subforum...

[arklan]

Would be great if those that want to do block size discussion would make a note at the beginning of their post like:
Block Size Discussion:

That would help a lot in skipping posts easier. Thanks.




Or...discuss it in a separate thread...like in an appropriate subforum...

welcome to the wall observer thread. you sound new here.

[Cassius]

Looks like these minor fluctuations are getting much tighter now, breakout must be soon.

But which way will it break??

I call UP!!!! 

I do not like the falling volume.

You gotta consider this trade volume matter in context, which means zooming out a bit to either weekly or 3 days.. you cannot really look only at daily volume or time intervals shorter than a few days in order to get a decent grasp of the situation... that's my thinking.

The mere fact that trade volume may decrease for a few days is not indicative that the price battle is over or that there is some kind of manipulation that is about to take place or major change in direction. 

A temporary drop in trade volume for a few days is merely an indication that some of the parties are regrouping.. which could take a few days and even trickle down for nearly a week before they resume the battle (in a more voluminous way).

I like falling volume, tells me a move is coming.

a bunch of longs appeared to have covered at 820-830
shorts seem unwilling to short at this level.

i'm thinking tonight we move above 830.

Maybe. The rising price/falling volume makes me a little nervous about which direction the next move will be.
Normally I wouldn't care too much but I get paid tomorrow for 3 months work and it's going to make a difference 

[Killerpotleaf]

Looks like these minor fluctuations are getting much tighter now, breakout must be soon.

But which way will it break??

I call UP!!!!  

I do not like the falling volume.

You gotta consider this trade volume matter in context, which means zooming out a bit to either weekly or 3 days.. you cannot really look only at daily volume or time intervals shorter than a few days in order to get a decent grasp of the situation... that's my thinking.

The mere fact that trade volume may decrease for a few days is not indicative that the price battle is over or that there is some kind of manipulation that is about to take place or major change in direction.  

A temporary drop in trade volume for a few days is merely an indication that some of the parties are regrouping.. which could take a few days and even trickle down for nearly a week before they resume the battle (in a more voluminous way).

I like falling volume, tells me a move is coming.

a bunch of longs appeared to have covered at 820-830
shorts seem unwilling to short at this level.

i'm thinking tonight we move above 830.

Maybe. The rising price/falling volume makes me a little nervous about which direction the next move will be.
Normally I wouldn't care too much but I get paid tomorrow for 3 months work and it's going to make a difference  

the way things are shaping up i think 830 will become sticky

we go over it and longs cover and shorts build,
we go under and short cover and longs build....

we might have done it, we have finally stabilized bitcoin!

[yonton]

do person to person transactions, localbitcoin, darkmarket etc.. have much of an impact on bitcoins price? Or is the price mostly determined/driven by exchanges?

[European Central Bank]

do person to person transactions, localbitcoin, darkmarket etc.. have much of an impact on bitcoins price? Or is the price mostly determined/driven by exchanges?

zero. all of it happens on exchanges. some of the price index sites include them in their weighted averages but nothing more.

but the people who sell via p2p presumably get most of their coins from exchanges as they're cheaper so there will be some buying pressure.

[bitserve]

do person to person transactions, localbitcoin, darkmarket etc.. have much of an impact on bitcoins price? Or is the price mostly determined/driven by exchanges?

The price is obviously determined by exchange prices... but OTC transactions indirectly influence the price by affecting the availability of coins in the exchanges. Also if there is scarcity of coins to be sold OTC, the price rises and buyers resort to exchanges, thus rising "the price", and the oppossite is also true.

[BitcoinNewsMagazine]

The big three Chinese exchanges (OKCoin, Huobi, and BTCC) have all disabled margin trading for all clients onshore in China. This is in response to the recent on-site “inspections” (aka Ride The Red Dildo) by the PBOC.

With margin trading eliminated, the question remains what happens with existing leveraged positions. If the PBOC forces the exchanges to unwind all positions, that will negatively impact the price. The CNY spot book of each exchange is a combination of leveraged and unleveraged traders. The ratio of leveraged longs to shorts is of interest. If the net leveraged positioning is long, that means a combination of leveraged shorts and long sells were matched against them. Given that we just witnessed a new all time high in the CNY price of Bitcoin, I estimate leveraged longs outnumber leveraged shorts. In the event of a margin call, as the exchange unwinds both sides, the net effect will be a drop in price. The magnitude of the drop depends on the size of the imbalance.

30% initial margin (3.33x leverage) was the normal amount of margin offered. The collateral will be exhausted if the price moves 30% below or above the entry price of longs and shorts respectively. Given that the exchanges themselves lent funds to speculators, should the price move further than 30% they would suffer a principal loss. For illustration purposes, assume that the long / short ratio is 100 XBT / 50 XBT. The 50 XBT shortfall was provided by long sellers of Bitcoin. If the book was unwound, 50 XBT would need to be sold into the order-book. Hopefully, the order-book liquidity is sufficient such that the average execution price is no lower than 30% (the initial margin) below the average entry price of all long positions.

However, now that margin is removed, the actual liquidity will be substantially lower. If the margin positions were to be unwound, it would happen at the worst possible time. Some white knight whale would need to fully fund purchases of Bitcoin as it was dumped onto the market. Last week the BitMEX Bitcoin / USD 100x leveraged swap, XBTUSD, traded a record of nearly 100,000 XBT over a 24-hour period. The actual open interest fluctuated between 10-20x lower than the recorded trading volume. Given that trading fees are 0 in China, I estimate open interest is 100x lower than recorded trading volumes.

The big three exchanges routinely traded around 5 million Bitcoin per day during the recent pump. Using a 100x divisor, assume that each exchange’s actual open interest of loans is 50,000 XBT. Also assume that longs represent 60% of that total, and shorts 40%. That leaves a net 10,000 Bitcoin of required selling on each exchange. 30,000 Bitcoin in total must be sold across all the exchanges. The differentiations between the exchanges is quite small, which means that they all have the same customers. It is also the same handful of market makers responsible for all the liquidity in China. As trades happen on OKCoin, liquidity will be removed from Huobi and BTCC simultaneously. Therefore, we cannot sum all the liquidity offered by each exchange.

30,000 Bitcoin is worth 268 million CNY. That is not chump change when you consider all purchases must be fully funded. If we take the most liquid order-book (OKCoin), how low would the price go if 30,000 Bitcoin were dumped?

Each day brings new developments on how the PBOC is constricting business operations of Chinese Bitcoin exchanges. The Fear, Uncertainty and Doubt (FUD) will depress buyer appetite further decreasing on-exchange liquidity. The pace of the forced margin call dictated by the PBOC will determine how far the price dips. I haven’t performed any extensive analysis on the order-book depth but my finger in the air estimation is a 10% to 15% drawdown from current levels. Hence my short term price target for Bitcoin is $650.

If and when the PBOC forces a China Bitcoin margin call, it will be an amazing buying opportunity. Without leverage, the only marginal sellers are Chinese miners. After the plunge, the marginal demand for Bitcoin will be higher than the supply offered by miners. The demand for a store of wealth not controlled by a government or central bank remains strong in China. I reiterate my call for USDCNY of 9.00 by the end of 2017. That would take Bitcoin substantially over its recent all time high of 8,895.98 CNY. It is still too early to tell whether the unwinding of margin positions will be orderly or chaotic. Much depends on exchange CEO’s fluffing skills. Get on your knees, boys: for the sake of Bitcoin.

reprinted from Bitmex Crypto Trader

[Cassius]

we might have done it, we have finally stabilized bitcoin!

LOL isn't that a bit like saying Elton John's turned straight because he hasn't shagged a man for two days? 

Why did that specific analogy spring to mind?!

I guess I just have a talent for weird, random but astute analogies 

Well thanks for the mental picture.
I think the 800s will be sticky all the same.

[jbreher]

do person to person transactions, localbitcoin, darkmarket etc.. have much of an impact on bitcoins price? Or is the price mostly determined/driven by exchanges?

Every transaction happens at exactly the bitcoin price. A willing buyer and a willing seller meet at a mutually agreeable figure. The 'market price' is merely an abstraction.

[600watt]

The big three Chinese exchanges (OKCoin, Huobi, and BTCC) have all disabled margin trading for all clients onshore in China. This is in response to the recent on-site “inspections” (aka Ride The Red Dildo) by the PBOC.

With margin trading eliminated, the question remains what happens with existing leveraged positions. If the PBOC forces the exchanges to unwind all positions, that will negatively impact the price. The CNY spot book of each exchange is a combination of leveraged and unleveraged traders. The ratio of leveraged longs to shorts is of interest. If the net leveraged positioning is long, that means a combination of leveraged shorts and long sells were matched against them. Given that we just witnessed a new all time high in the CNY price of Bitcoin, I estimate leveraged longs outnumber leveraged shorts. In the event of a margin call, as the exchange unwinds both sides, the net effect will be a drop in price. The magnitude of the drop depends on the size of the imbalance.

30% initial margin (3.33x leverage) was the normal amount of margin offered. The collateral will be exhausted if the price moves 30% below or above the entry price of longs and shorts respectively. Given that the exchanges themselves lent funds to speculators, should the price move further than 30% they would suffer a principal loss. For illustration purposes, assume that the long / short ratio is 100 XBT / 50 XBT. The 50 XBT shortfall was provided by long sellers of Bitcoin. If the book was unwound, 50 XBT would need to be sold into the order-book. Hopefully, the order-book liquidity is sufficient such that the average execution price is no lower than 30% (the initial margin) below the average entry price of all long positions.

However, now that margin is removed, the actual liquidity will be substantially lower. If the margin positions were to be unwound, it would happen at the worst possible time. Some white knight whale would need to fully fund purchases of Bitcoin as it was dumped onto the market. Last week the BitMEX Bitcoin / USD 100x leveraged swap, XBTUSD, traded a record of nearly 100,000 XBT over a 24-hour period. The actual open interest fluctuated between 10-20x lower than the recorded trading volume. Given that trading fees are 0 in China, I estimate open interest is 100x lower than recorded trading volumes.

The big three exchanges routinely traded around 5 million Bitcoin per day during the recent pump. Using a 100x divisor, assume that each exchange’s actual open interest of loans is 50,000 XBT. Also assume that longs represent 60% of that total, and shorts 40%. That leaves a net 10,000 Bitcoin of required selling on each exchange. 30,000 Bitcoin in total must be sold across all the exchanges. The differentiations between the exchanges is quite small, which means that they all have the same customers. It is also the same handful of market makers responsible for all the liquidity in China. As trades happen on OKCoin, liquidity will be removed from Huobi and BTCC simultaneously. Therefore, we cannot sum all the liquidity offered by each exchange.

30,000 Bitcoin is worth 268 million CNY. That is not chump change when you consider all purchases must be fully funded. If we take the most liquid order-book (OKCoin), how low would the price go if 30,000 Bitcoin were dumped?

Each day brings new developments on how the PBOC is constricting business operations of Chinese Bitcoin exchanges. The Fear, Uncertainty and Doubt (FUD) will depress buyer appetite further decreasing on-exchange liquidity. The pace of the forced margin call dictated by the PBOC will determine how far the price dips. I haven’t performed any extensive analysis on the order-book depth but my finger in the air estimation is a 10% to 15% drawdown from current levels. Hence my short term price target for Bitcoin is $650.

If and when the PBOC forces a China Bitcoin margin call, it will be an amazing buying opportunity. Without leverage, the only marginal sellers are Chinese miners. After the plunge, the marginal demand for Bitcoin will be higher than the supply offered by miners. The demand for a store of wealth not controlled by a government or central bank remains strong in China. I reiterate my call for USDCNY of 9.00 by the end of 2017. That would take Bitcoin substantially over its recent all time high of 8,895.98 CNY. It is still too early to tell whether the unwinding of margin positions will be orderly or chaotic. Much depends on exchange CEO’s fluffing skills. Get on your knees, boys: for the sake of Bitcoin.

reprinted from Bitmex Crypto Trader

30k btc to be sold is surely not doing any good to the price. on the other hand on bitstamp alone 35k btc have been dumped on jan.5th. and another 27k next day. bitstamp has a market share of less then 0.2% (the real market share value is surely higher due to fake volume on chinese exchanges)

edit: missing word

edit2: i noticed your bearish posts lately. at least you make it clear that you have a short position.

[Tzupy]

Let's see where the support is now.

[600watt]

Let's see where the support is now.

the next 24 dumps are critical.

[BitcoinNewsMagazine]

The big three Chinese exchanges (OKCoin, Huobi, and BTCC) have all disabled margin trading for all clients onshore in China. This is in response to the recent on-site “inspections” (aka Ride The Red Dildo) by the PBOC.

With margin trading eliminated, the question remains what happens with existing leveraged positions. If the PBOC forces the exchanges to unwind all positions, that will negatively impact the price. The CNY spot book of each exchange is a combination of leveraged and unleveraged traders. The ratio of leveraged longs to shorts is of interest. If the net leveraged positioning is long, that means a combination of leveraged shorts and long sells were matched against them. Given that we just witnessed a new all time high in the CNY price of Bitcoin, I estimate leveraged longs outnumber leveraged shorts. In the event of a margin call, as the exchange unwinds both sides, the net effect will be a drop in price. The magnitude of the drop depends on the size of the imbalance.

30% initial margin (3.33x leverage) was the normal amount of margin offered. The collateral will be exhausted if the price moves 30% below or above the entry price of longs and shorts respectively. Given that the exchanges themselves lent funds to speculators, should the price move further than 30% they would suffer a principal loss. For illustration purposes, assume that the long / short ratio is 100 XBT / 50 XBT. The 50 XBT shortfall was provided by long sellers of Bitcoin. If the book was unwound, 50 XBT would need to be sold into the order-book. Hopefully, the order-book liquidity is sufficient such that the average execution price is no lower than 30% (the initial margin) below the average entry price of all long positions.

However, now that margin is removed, the actual liquidity will be substantially lower. If the margin positions were to be unwound, it would happen at the worst possible time. Some white knight whale would need to fully fund purchases of Bitcoin as it was dumped onto the market. Last week the BitMEX Bitcoin / USD 100x leveraged swap, XBTUSD, traded a record of nearly 100,000 XBT over a 24-hour period. The actual open interest fluctuated between 10-20x lower than the recorded trading volume. Given that trading fees are 0 in China, I estimate open interest is 100x lower than recorded trading volumes.

The big three exchanges routinely traded around 5 million Bitcoin per day during the recent pump. Using a 100x divisor, assume that each exchange’s actual open interest of loans is 50,000 XBT. Also assume that longs represent 60% of that total, and shorts 40%. That leaves a net 10,000 Bitcoin of required selling on each exchange. 30,000 Bitcoin in total must be sold across all the exchanges. The differentiations between the exchanges is quite small, which means that they all have the same customers. It is also the same handful of market makers responsible for all the liquidity in China. As trades happen on OKCoin, liquidity will be removed from Huobi and BTCC simultaneously. Therefore, we cannot sum all the liquidity offered by each exchange.

30,000 Bitcoin is worth 268 million CNY. That is not chump change when you consider all purchases must be fully funded. If we take the most liquid order-book (OKCoin), how low would the price go if 30,000 Bitcoin were dumped?

Each day brings new developments on how the PBOC is constricting business operations of Chinese Bitcoin exchanges. The Fear, Uncertainty and Doubt (FUD) will depress buyer appetite further decreasing on-exchange liquidity. The pace of the forced margin call dictated by the PBOC will determine how far the price dips. I haven’t performed any extensive analysis on the order-book depth but my finger in the air estimation is a 10% to 15% drawdown from current levels. Hence my short term price target for Bitcoin is $650.

If and when the PBOC forces a China Bitcoin margin call, it will be an amazing buying opportunity. Without leverage, the only marginal sellers are Chinese miners. After the plunge, the marginal demand for Bitcoin will be higher than the supply offered by miners. The demand for a store of wealth not controlled by a government or central bank remains strong in China. I reiterate my call for USDCNY of 9.00 by the end of 2017. That would take Bitcoin substantially over its recent all time high of 8,895.98 CNY. It is still too early to tell whether the unwinding of margin positions will be orderly or chaotic. Much depends on exchange CEO’s fluffing skills. Get on your knees, boys: for the sake of Bitcoin.

reprinted from Bitmex Crypto Trader

30k btc to be sold is surely not doing any good to the price. on the other hand on bitstamp alone 35k btc have been dumped on jan.5th. and another 27k next day. bitstamp has a market share of less then 0.2% (the real market share value is surely higher due to fake volume on chinese exchanges)

edit: missing word

edit2: i noticed your bearish posts lately. at least you make it clear that you have a short position.

Sorry I have never shorted bitcoin. I can also make a good case that we have just finished an abc Elliott Wave correction and should resume upward trajectory soon with a price projection for Primary Wave 3 of $1800. Here is a preliminary chart, when I have some time I will write up a full article on my Elliott Wave count for bitcoin.



Need to make sure the bottom is really in at $735 on Bitfinex first.

[petahashminer]

seems $ 800 and

5500 yuans is holding..

[uhoh]

seems $ 800 and

5500 yuans is holding..

Indeed. First dump in a while that hasn't resulted in a 20 dollar spread and a ticker that looks broken.

[600watt]

30k btc to be sold is surely not doing any good to the price. on the other hand on bitstamp alone 35k btc have been dumped on jan.5th. and another 27k next day. bitstamp has a market share of less then 0.2% (the real market share value is surely higher due to fake volume on chinese exchanges)

edit: missing word

edit2: i noticed your bearish posts lately. at least you make it clear that you have a short position.

Sorry I have never shorted bitcoin. I can also make a good case that we have just finished an abc Elliott Wave correction and should resume upward trajectory soon with a price projection for Primary Wave 3 of $1800. Here is a preliminary chart, when I have some time I will write up a full article on my Elliott Wave count for bitcoin.



Need to make sure the bottom is really in at $735 on Bitfinex first.

please excuse my incorrect assumption then. your knowledge about the topic is much greater than mine.

[uhoh]

Vinny Lingham nearly got rekt with that mini-dump

https://twitter.com/VinnyLingham/status/820340119970332672

EDIT: Spoke too soon. 800.030 is the low. Stamp lagging at 816!

[JayJuanGee]

30k btc to be sold is surely not doing any good to the price. on the other hand on bitstamp alone 35k btc have been dumped on jan.5th. and another 27k next day. bitstamp has a market share of less then 0.2% (the real market share value is surely higher due to fake volume on chinese exchanges)
 

I get what you are saying that someone had to sell all those coins on January 5 and 6 on Stamp; however, traded is not the same as dumped, merely because the price went down during the process of the trading.  

Let's see where the support is now.

Right...

A potential test of $800 and $780.

[Killerpotleaf]

The big three Chinese exchanges (OKCoin, Huobi, and BTCC) have all disabled margin trading for all clients onshore in China. This is in response to the recent on-site “inspections” (aka Ride The Red Dildo) by the PBOC.

With margin trading eliminated, the question remains what happens with existing leveraged positions. If the PBOC forces the exchanges to unwind all positions, that will negatively impact the price. The CNY spot book of each exchange is a combination of leveraged and unleveraged traders. The ratio of leveraged longs to shorts is of interest. If the net leveraged positioning is long, that means a combination of leveraged shorts and long sells were matched against them. Given that we just witnessed a new all time high in the CNY price of Bitcoin, I estimate leveraged longs outnumber leveraged shorts. In the event of a margin call, as the exchange unwinds both sides, the net effect will be a drop in price. The magnitude of the drop depends on the size of the imbalance.

30% initial margin (3.33x leverage) was the normal amount of margin offered. The collateral will be exhausted if the price moves 30% below or above the entry price of longs and shorts respectively. Given that the exchanges themselves lent funds to speculators, should the price move further than 30% they would suffer a principal loss. For illustration purposes, assume that the long / short ratio is 100 XBT / 50 XBT. The 50 XBT shortfall was provided by long sellers of Bitcoin. If the book was unwound, 50 XBT would need to be sold into the order-book. Hopefully, the order-book liquidity is sufficient such that the average execution price is no lower than 30% (the initial margin) below the average entry price of all long positions.

However, now that margin is removed, the actual liquidity will be substantially lower. If the margin positions were to be unwound, it would happen at the worst possible time. Some white knight whale would need to fully fund purchases of Bitcoin as it was dumped onto the market. Last week the BitMEX Bitcoin / USD 100x leveraged swap, XBTUSD, traded a record of nearly 100,000 XBT over a 24-hour period. The actual open interest fluctuated between 10-20x lower than the recorded trading volume. Given that trading fees are 0 in China, I estimate open interest is 100x lower than recorded trading volumes.

The big three exchanges routinely traded around 5 million Bitcoin per day during the recent pump. Using a 100x divisor, assume that each exchange’s actual open interest of loans is 50,000 XBT. Also assume that longs represent 60% of that total, and shorts 40%. That leaves a net 10,000 Bitcoin of required selling on each exchange. 30,000 Bitcoin in total must be sold across all the exchanges. The differentiations between the exchanges is quite small, which means that they all have the same customers. It is also the same handful of market makers responsible for all the liquidity in China. As trades happen on OKCoin, liquidity will be removed from Huobi and BTCC simultaneously. Therefore, we cannot sum all the liquidity offered by each exchange.

30,000 Bitcoin is worth 268 million CNY. That is not chump change when you consider all purchases must be fully funded. If we take the most liquid order-book (OKCoin), how low would the price go if 30,000 Bitcoin were dumped?

Each day brings new developments on how the PBOC is constricting business operations of Chinese Bitcoin exchanges. The Fear, Uncertainty and Doubt (FUD) will depress buyer appetite further decreasing on-exchange liquidity. The pace of the forced margin call dictated by the PBOC will determine how far the price dips. I haven’t performed any extensive analysis on the order-book depth but my finger in the air estimation is a 10% to 15% drawdown from current levels. Hence my short term price target for Bitcoin is $650.

If and when the PBOC forces a China Bitcoin margin call, it will be an amazing buying opportunity. Without leverage, the only marginal sellers are Chinese miners. After the plunge, the marginal demand for Bitcoin will be higher than the supply offered by miners. The demand for a store of wealth not controlled by a government or central bank remains strong in China. I reiterate my call for USDCNY of 9.00 by the end of 2017. That would take Bitcoin substantially over its recent all time high of 8,895.98 CNY. It is still too early to tell whether the unwinding of margin positions will be orderly or chaotic. Much depends on exchange CEO’s fluffing skills. Get on your knees, boys: for the sake of Bitcoin.

reprinted from Bitmex Crypto Trader

nice analysis

i think its doubtful PBOC will order all positions to be closed within a 24 hour period... from what i hear they want to bring an element of stability and health to the bitcoin market, they want things to be done right... not be the source of investors losing there shirt...

and you have to understand that the reason why price has dropped recently is because of this FUD... market is saying " if shit hits the fan what should price be " and then moves close to that price before the shit actually hits the fan.

I suspect the PBOC will allow margins, but not naked shorts... I think they are more concerned with AML, capital flight, and that exchanges aren't about to go GOX.

at this point, price has priced in a negative outcome to all this PBOC regulation, i believe we might see more downward pressure if some shit comes out, but i dont see more then -15% and very temporary, after all once its all said and done what are we left with? PBOC approved bitcoin exchanges  , there also a not half bad chance that not much shit comes out of this at all, exchange have been doing the proper KYC, maybe they'll get more guidance on how to prevent capital flight, a few rules to fallow, some reports to file, and a slap on the wrist for running bots.