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

[ElectricMucus]

How can any bounce look different than a inverted head & shoulders? How can any top be different than a head and shoulders?

Geometry tip: They can't.

[ChartBuddy]

[Its About Sharing]

Though it is a long shot, perhaps the low volume is simply a result of the current exchange market conditions suppressing volume?

Just a hypothesis, although what would like a HnS pattern would fit with my current elliott wave count/guess (reversal of a down 5-wave count into a new up 5-wave count)


here's a little  rough sketch i did yesterday
https://www.tradingview.com/x/Gxn7wES1/

By market conditions, do you mean the GOX fiasco?
The GOX thing, one can argue, is increasing buying pressure for those "trapped" there. I don't know, I feel like I'm walking on eggshells though and don't like it. Too much work in front of the computer.
I look forward to buying and holding and doing something better with my time in the near future. 

I'm not familiar with EW, but I can comment if you give more info on it?

EM - Fair point, I think, in other words a bounce is going to respond to often resemble a H&S pattern. I guess we can argue that about all the patterns. They all represent shifts in energy to a point. Cup and Handle is also a build up. All the candlestick patterns...

[vokain]

The GOX thing, one can argue, is increasing buying pressure for those "trapped" there. I don't know, I feel like I'm walking on eggshells though and don't like it. Too much work in front of the computer.

My rationale was that yes, the bullish volume might be relatively increased as a result of that factor, but overall volume would still be suppressed because people do not want to put money into Gox, the former de-facto place to send your money if you wanted to purchase bitcoins. With the removal of their market role, I would guess overall volume decreased as people find they don't want to put their money into Gox anymore, and start looking for other places to find it.  Bitstamp's volume is steadily increasing I've noticed.

I'm not familiar with EW, but I can comment if you give more info on it?

https://en.wikipedia.org/wiki/Elliott_wave_principle#Elliott_Wave_personality_and_characteristics


Basically, at least how i understand the principle, trends move in a 5-wave count fashion, due to fractalized psychologies. A five wave count can either end with a ABC corrective trend before continuing the trend the count was on, or, it can start a new 5 wave reversal count.

My hypothesis is that on the way down to 65, we had the end of a downwards 5 waves. Right now, we are facing the question whether or not we are finishing an ABC corrective trend, or beginning a new count of 5 waves up (of which we would be in wave 3, confirmed by passing 115). This to me looks like a head and shoulders pattern if it plays out, and a failure if we finish out an ABC pattern and continue heading back down.

[vokain]

here's a side to side comparison if it helps

[Its About Sharing]

The GOX thing, one can argue, is increasing buying pressure for those "trapped" there. I don't know, I feel like I'm walking on eggshells though and don't like it. Too much work in front of the computer.

My rationale was that yes, the bullish volume might be relatively increased as a result of that factor, but overall volume would still be suppressed because people do not want to put money into Gox, the former de-facto place to send your money if you wanted to purchase bitcoins. With the removal of their market role, I would guess overall volume decreased as people find they don't want to put their money into Gox anymore, and start looking for other places to find it.  Bitstamp's volume is steadily increasing I've noticed.

I whole heartedly agree with that. People with money there now might be feeling the only way out is to buy and transfer coins out. If you don't need the money, you just keep it their in Fiat and hope Gox is legit.
But, as you said, the overall effect is that Gox is probably getting less new money (at least from people like me and you). Those huge huge buys up from $65 was new money imo and the large recent buys continue to be new money. Perhaps big money knows Gox is ok?...

I'm not familiar with EW, but I can comment if you give more info on it?

https://en.wikipedia.org/wiki/Elliott_wave_principle#Elliott_Wave_personality_and_characteristics


Basically, at least how i understand the principle, trends move in a 5-wave count fashion, due to fractalized psychologies. A five wave count can either end with a ABC corrective trend before continuing the trend the count was on, or, it can start a new 5 wave reversal count.

My hypothesis is that on the way down to 65, we had the end of a downwards 5 waves. Right now, we are facing the question whether or not we are finishing an ABC corrective trend, or beginning a new count of 5 waves up (of which we would be in wave 3, confirmed by passing 115). This to me looks like a head and shoulders pattern if it plays out, and a failure if we finish out an ABC pattern and continue heading back down.

I will refrain from reading that now as my head has too much "Gann" in it.   But I appreciate the link.
I follow what you say and have seen others on Tradingview mention the Elliot Waves in the same context recently. The consensus is the same as yours - Up in all probability. The volume, I think, is the deciding factor but we'll see this next week is my bet...

I see your update and think I follow you better now. Funny pattern duplicate, eh?

[vokain]

The GOX thing, one can argue, is increasing buying pressure for those "trapped" there. I don't know, I feel like I'm walking on eggshells though and don't like it. Too much work in front of the computer.

My rationale was that yes, the bullish volume might be relatively increased as a result of that factor, but overall volume would still be suppressed because people do not want to put money into Gox, the former de-facto place to send your money if you wanted to purchase bitcoins. With the removal of their market role, I would guess overall volume decreased as people find they don't want to put their money into Gox anymore, and start looking for other places to find it.  Bitstamp's volume is steadily increasing I've noticed.

I whole heartedly agree with that. People with money there now might be feeling the only way out is to buy and transfer coins out. If you don't need the money, you just keep it their in Fiat and hope Gox is legit.
But, as you said, the overall effect is that Gox is probably getting less new money (at least from people like me and you). Those huge huge buys up from $65 was new money imo and the large recent buys continue to be new money. Perhaps big money knows Gox is ok?...

not necessarily

There is some exciting news that will materialize soon though.

the exciting news is that bitcoin is rallying, in line with our forecast :-)

of course, I didnt think for one second than any substantial amount of money from $130 down was withdrawn back into bank accounts. There's still quite a bit of latent money sitting on exchange sidelines I imagine.

correct. and most of our special indicators support this

ooooh, special indicators

My vague guess is something about an exchange. By the by, did you guys notice  that tradehill looks like it's going to make a comeback? https://tradehill.com/

I imagine Gox USD inflow is currently like turning off the water spigot that you fill up a bucket with. As you turn it off, the water inflow to the bucket becomes more and more limited, but still, you have lots of water in that bucket. That water isn't going to go anywhere unless it is (with)drawn out, or evaporates (through transaction fees). The act of people selling bitcoin on Gox would be akin to picking up water and pouring it in another part of the USD bucket, and in doing so, the other party gets something (BTC) for it. Prices should be higher to reflect this.

[Chang Hum]

With a faint wind and tumbleweed blowing across the floor of Gox this Saturday, looks like we're waiting for the first draw between Bull and Bear before we can predict the trend this weekend!

[ChartBuddy]

[S3052]

we still see this phenomenon:

1) During a rally, people who still have USD/other fiat funds at MtGox buy BTC
2) Many of them transfer them to other exchanges, mainly Bitstamp
3) As a consequence, the order book bid/ask ratios are inverse at MtGox versus Bitstamp
4) Ultimately, MtGox market share drops further. Today, we again see Bitstamp with the same USD market share as MtGox:

mtgoxUSD         103.7500   11,865.21
bitstampUSD   96.8500   10,781.35

[vokain]

we still see this phenomenon:

1) During a rally, people who still have USD/other fiat funds at MtGox buy BTC
2) Many of them transfer them to other exchanges, mainly Bitstamp
3) As a consequence, the order book bid/ask ratios are inverse at MtGox versus Bitstamp
4) Ultimately, MtGox market share drops further. Today, we again see Bitstamp with the same USD market share as MtGox:

mtgoxUSD         103.7500   11,865.21
bitstampUSD   96.8500   10,781.35

Not only has the gap between MtGox and Bitstamp increased to about $10 again, but the order book is starting to look like a mirror image.

MtGox:



Bitstamp:



It appears that Bitstamp is far more bearish than MtGox. This is surely a reflection on people trying to buy BTC to get out of MtGox?

I suspect Bitstamp is leading the market now too, which makes me wonder whether the 95 support level is about to give way.

or more people able to sell on Bitstamp?

Conversely, the fear of selling on MtGox is what is keeping selling pressure suppressed there

Though a higher bid/ask ratio typically and historically is bearish, in Bitstamp's current situation that might not be necessarily true IF the overall bitcoin market is bullish. As Bitstamp absorbs mtgox's asks from mtgox's predicament, Bitstamp is only slowly growing on the bid side from only steadily increasing market share for the purchase of bitcoins. As in, the only reason why the greater supply of coins on the Stamp isn't dragging prices down as much (S/D on bitstamp definitely a factor though, I guess that the price on Stamp is relatively lower for this reason), overall demand of Bitcoin outweighs the greater supply/demand ratio on Bitstamp ie why Bitstamp prices have absolutely gone up as well

Hopefully Bitstamp gets some more USD inflows to equalize as time passes and

4) Ultimately, MtGox market share drops further.

at least until they resolve the concern that any Gox fiat depositors and BTC sellers will not be able to withdraw their Gox fiat. Until the fiat on Gox can be withdrawn, the arbitrageurs cannot take advantage of the lower Bitstamp prices, and Bitstamp's bid side has to depend upon new money (and it does look like all this new Bitcoin money is being funneled into Bitstamp, not MtGox). This seems to be true, and perhaps it's just that bullish that things are working out as well as it is so far.

I stand by my other hypothesis a few pages back that our reversal is in part a result of MtGox's troubles and though it's counterintuitive, considering how we have handled it thus far, overall it's bullish as ever. The fact that new USD Bitstamp inflows are countering the downwards pricing effect of Bitstamp taking on a lot of MtGox's selling pressure suggests so.
https://bitcointalk.org/index.php?topic=178336.msg2837009#msg2837009
https://bitcointalk.org/index.php?topic=178336.msg2837036#msg2837036

[ChartBuddy]

[MoreFun]

It is not true that the bid side on Bitstamp is weak, there is much hidden power behind, especially since most of the buys are driven by Bifinex.

[vokain]

It is not true that the bid side on Bitstamp is weak, there is much hidden power behind, especially since most of the buys are driven via Bifinex.

I'm saying it could be greater than it currently if arbitrageurs could withdraw their USD from Gox to buy at Bitstamp to better equalize the price diffference. I also think Bitfinex's influence is in the long run negligible on Bitstamp's prices. If bitfinex thinks the price will go up, then they'll buy more on bitstamp. Inversely, if Bitfinex thinks the price will go down, they'll sell more on bitstamp. Bitfinex will not always be bullish..but it's worth noting that it currently is so.....

Bitstamp's bid-side influences:
new money (a lot of which formerly would've went to gox)
Bitfinex speculation
general Bitcoin market


Bitstamp's ask-side influences:
Gox former supply of BTC as they move from Gox to the functioning  exchange and the desire to sell them
Bitfinex speculation
general Bitcoin market

===
Unfortunately, Gox fiat can't follow the bitcoins that are moving to Bitstamp. This puts the bid-side at a disadvantage, unless the velocity of new buying money is greater than the coins being sold, either to be speculated upon or  withdrawn out of the system (remember that Bitstamp is currently the biggest exchange where you can withdraw "real" money).

If I were selling coins on mtgox, my prices would be much, much higher than they currently are. The risk of not being able to withdraw is tremendous and it would take a huge premium for me to sell my liquid coins and take that risk on, because I might not ever be able to see what I exchange said coins for.

[MoreFun]

It is not true that the bid side on Bitstamp is weak, there is much hidden power behind, especially since most of the buys are driven via Bifinex.

I'm saying it could be greater than it currently if arbitrageurs could withdraw their USD from Gox to buy at Bitstamp to better equalize the price diffference.

Yes, but if this would be possible the difference would get lower and lower (probably gox going down to bitstamp level). Because of Bitfinex Bitstamp is sometimes so unrational (like 400 buys now).

[vokain]

It is not true that the bid side on Bitstamp is weak, there is much hidden power behind, especially since most of the buys are driven via Bifinex.

I'm saying it could be greater than it currently if arbitrageurs could withdraw their USD from Gox to buy at Bitstamp to better equalize the price diffference.

[1]Yes, but if this would be possible the difference would get lower and lower (probably gox going down to bitstamp level).

[2]Because of Bitfinex Bitstamp is sometimes so unrational (like 400 buys now).

1. Yes. On the flipside, bitstamp would also be going up to Gox's level
2. I disagree that this is irrational. It makes sense, it's not like Bitstamp is selflessly or recklessly holding up the price on Bitfinex. It's more like they are buying bitcoin and using bitstamp as a source to get coins from due to BFX's poor local liquidity. This is a reflection how the Bitfinex players, or rather, the players using Bitfinex, are judging the market at this point in time. They will sell when it's time to sell.

[gog1]

It is not true that the bid side on Bitstamp is weak, there is much hidden power behind, especially since most of the buys are driven by Bifinex.

Bitfinex allows both short and long.  But I think the margin trade is running out of money for people to borrow.

[vokain]

It is not true that the bid side on Bitstamp is weak, there is much hidden power behind, especially since most of the buys are driven by Bifinex.

Bitfinex allows both short and long.  But I think the margin trade is running out of money for people to borrow.

correct. Some time last week, the available USDs-worth to borrow and buy BTC was a bit over 3000BTC. Now it's about 1000 with even greater interest rates.

Inversely,
some time last week, available BTCs to borrow to sell was around 2000 BTC. Now it's around 5000 BTC with slightly lower rates.

This suggests that people are less likely to short, so in order to equalize that for one reason or another, interest rates have to get lower. We might see some more shorting as a result of the resulting decreased cost to short. The increased supply to short might also mean that more shorts were covered in the mean time, but not necessarily.

[MoreFun]

Vokain I agree, what I am trying to say is that Bitstamp changed soooo much since Bitfinex started using them and one should expect unrationality (there were so many examples when I was screaming "what a stupid buy").

[ChartBuddy]