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

[ChartBuddy]

Explanation

[surfer43]

Explanation

OK now we are as stable as fiat. 

[JorgeStolfi]

Which naturally raises the following question: why are we following [China]?

Arbitrage trading seems to be a good explanation.  If the price drops significantly at Huobi but not at Bitstamp, for example, someone promptly buys BTC at Huobi and sells them at Bitstamp, until the prices even out.

To play that game well, one needs quick reflexes (= robots) and substantial accounts of BTC and national currencies at both exchanges.  It does not matter whether your profits end up in China or in Bulgaria, you can transfer them later with bitcoins or any other method.  

Because of arbitrage trading, market prices are  usually more or less the same in all markets, with due offsets because of trading fees or other exchange-specific factors (such as transportation, storage and customs costs in the case of material goods).

That's why that 130 USD premium at Mt.GOX is so worrying.  Arbitrage traders are obviously not operating there.  And who could be buying the overpriced coins that people are selling there?

PS. Arbitrage trading is considered good because it makes one large market out of the separate exchanges, so prices tend to be more stable and the spreads between buy and sell are usually lower.

[electronistul]

Those who were here for long enough are getting tired of the stability. One can tell by the sheer speed people had selling ~1000 coins into a wall at $800 for the entire trend to stop right there after the wall got eaten.
I'm 101% sure that if someone else sticks a buy wall at 810 of the same magnitude, it will be bought into at the same pace, so previous "bears" don't miss the train. However, the entire 1000BTC "up" movement will cease just after that fact.
I think a clear "up" or "down" signal, backed by more than 5000 coins being bought / sold can tip the balance in any of the two directions and more would just follow.

[JorgeStolfi]

Suppose that the price of a BTC fell to 100 USD while its transaction volume kept increasing.  Would mining still be profitable?

[mmitech]

Suppose that the price of a BTC fell to 100 USD while its transaction volume kept increasing.  Would mining still be profitable?

it depends how you look at this situation, basically if we look at the USD value and the cost of the hardware and energy, internet, cooling... small miners are barely making any profit at today's prices, now if you look to profit in terms of BTC then small miners are not making any profits at all and this is due to the fast difficulty rises since April...

So most of miners will have to hold their bitcoins and wait for a higher price to break even in USD, and most of miners that were aiming for BTC profits has realized that the BTC ROI is getting harder and harder to achieve but this will settle down when the ASIC era is over, it was the same case when mining switched from CPU to GPU...

[empowering]

I expect to see a new thread soon:

http://www.reddit.com/r/Bitcoin/previous_reports_about_previous_reports_about_btce_confirmed_as_fake_confirmed_as_fake/

 

[nanobrain]

Which naturally raises the following question: why are we following [China]?

Arbitrage trading seems to be a good explanation.  If the price drops significantly at Huobi but not at Bitstamp, for example, someone promptly buys BTC at Huobi and sells them at Bitstamp, until the prices even out.

To play that game well, one needs quick reflexes (= robots) and substantial accounts of BTC and national currencies at both exchanges.  It does not matter whether your profits end up in China or in Bulgaria, you can transfer them later with bitcoins or any other method. 

Because of arbitrage trading, market prices are  usually more or less the same in all markets, with due offsets because of trading fees or other exchange-specific factors (such as transportation, storage and customs costs in the case of material goods).

That's why that 130 USD premium at Mt.GOX is so worrying.  Arbitrage traders are obviously not operating there.  And who could be buying the overpriced coins that people are selling there?

PS. Arbitrage trading is considered good because it makes one large market out of the separate exchanges, so prices tend to be more stable and the spreads between buy and sell are usually lower.

Try getting fiat onto one of the Chinese exchanges- or indeed, getting it out.

One of those times when your 'academic' approach falls foul of reality.

[magicmexican]

btc-e now in sync with bearstamp?

[surfer43]

Suppose that the price of a BTC fell to 100 USD while its transaction volume kept increasing.  Would mining still be profitable?

it depends how you look at this situation, basically if we look at the USD value and the cost of the hardware and energy, internet, cooling... small miners are barely making any profit at today's prices, now if you look to profit in terms of BTC then small miners are not making any profits at all and this is due to the fast difficulty rises since April...

So most of miners will have to hold their bitcoins and wait for a higher price to break even in USD, and most of miners that were aiming for BTC profits has realized that the BTC ROI is getting harder and harder to achieve but this will settle down when the ASIC era is over, it was the same case when mining switched from CPU to GPU...

tell me more...

[JorgeStolfi]

Try getting fiat onto one of the Chinese exchanges- or indeed, getting it out.

One of those times when your 'academic' approach falls foul of reality.

As I said, you need a substantial position at both exchanges (or you find an associate with accounts at the other exchange and agree to split the profits). It is not a game for small investors.  

Suppose that the effective exchange rate is 5 CNY = 1 USD.

You buy 1 BTC for 900 USD at Bitstamp when its price is too low. You send the BTC to your associate, who sells it for 5000 CNY = 1000 USD.   Now you have temporarily lost 900 USD and he has cashed in 5000 CNY = 1000 USD, so your society has made 100 USD net profit.

Later if conditions reverse he buys 1 BTC for 4500 CNY = 900 USD at Huobi, sends it to you. You sell at Bitstamp for 1000 USD.  Counting both operations, you made a 100 USD profit, he made a 500 CNY profit, and you are settled.

What if things do not even out? Suppose you were only able to do arbitrages of the first type above, and at some point you have accumulated a 10000 USD loss while he got a 70000 CNY gain.  Supose that at that moment the price is even, 1000 USD = 5000 CNY.  Then he buys 12 BTC at 60000 CNY, sends them to you. You sell them at Bitstamp for 12000 USD.  Now your net profit is 2000 USD, his is 10000 CNY = 2000 USD, and both are even.  

In ny case, each side can easily withdraw his profits in his own currency, without any currency conversion or international money transfers.

 

[mmitech]

Suppose that the price of a BTC fell to 100 USD while its transaction volume kept increasing.  Would mining still be profitable?

it depends how you look at this situation, basically if we look at the USD value and the cost of the hardware and energy, internet, cooling... small miners are barely making any profit at today's prices, now if you look to profit in terms of BTC then small miners are not making any profits at all and this is due to the fast difficulty rises since April...

So most of miners will have to hold their bitcoins and wait for a higher price to break even in USD, and most of miners that were aiming for BTC profits has realized that the BTC ROI is getting harder and harder to achieve but this will settle down when the ASIC era is over, it was the same case when mining switched from CPU to GPU...

tell me more...

what do you want to know ?   

[surfer43]

Suppose that the price of a BTC fell to 100 USD while its transaction volume kept increasing.  Would mining still be profitable?

it depends how you look at this situation, basically if we look at the USD value and the cost of the hardware and energy, internet, cooling... small miners are barely making any profit at today's prices, now if you look to profit in terms of BTC then small miners are not making any profits at all and this is due to the fast difficulty rises since April...

So most of miners will have to hold their bitcoins and wait for a higher price to break even in USD, and most of miners that were aiming for BTC profits has realized that the BTC ROI is getting harder and harder to achieve but this will settle down when the ASIC era is over, it was the same case when mining switched from CPU to GPU...

tell me more...

what do you want to know ?   

about the end of the ASIC era 

[mmitech]

Suppose that the price of a BTC fell to 100 USD while its transaction volume kept increasing.  Would mining still be profitable?

it depends how you look at this situation, basically if we look at the USD value and the cost of the hardware and energy, internet, cooling... small miners are barely making any profit at today's prices, now if you look to profit in terms of BTC then small miners are not making any profits at all and this is due to the fast difficulty rises since April...

So most of miners will have to hold their bitcoins and wait for a higher price to break even in USD, and most of miners that were aiming for BTC profits has realized that the BTC ROI is getting harder and harder to achieve but this will settle down when the ASIC era is over, it was the same case when mining switched from CPU to GPU...

tell me more...

what do you want to know ?   

about the end of the ASIC era 

if you want me to tell you to not worry it will come to and end then no but I can tell you that once the ASIC prototypes are available in a large scale and once the network diff. growth will surpass the price growth which is happening now the ASIC era will slow down...

[KeyserSoze]

The 2011 bubble was ~3000%  (from $1 to $32), the early 2013 bubble was ~1500% (from $13 to $260), and only the last rally was 600% (from $200 to $1200).  

For a while this ballpark scenario seemed plausible but now I don't think a continuation of it accounts for S-curve adoption, should that happen. Would be interesting if the U.S. kept DPR's coins instead of auctioning so they could bootstrap U.S. gov exchanges: http://www.bloomberg.com/video/can-bitcoin-save-the-post-office-iQx5kWnzQI~iWL2ZmNNm0A.html

[surfer43]

Suppose that the price of a BTC fell to 100 USD while its transaction volume kept increasing.  Would mining still be profitable?

it depends how you look at this situation, basically if we look at the USD value and the cost of the hardware and energy, internet, cooling... small miners are barely making any profit at today's prices, now if you look to profit in terms of BTC then small miners are not making any profits at all and this is due to the fast difficulty rises since April...

So most of miners will have to hold their bitcoins and wait for a higher price to break even in USD, and most of miners that were aiming for BTC profits has realized that the BTC ROI is getting harder and harder to achieve but this will settle down when the ASIC era is over, it was the same case when mining switched from CPU to GPU...

tell me more...

what do you want to know ?   

about the end of the ASIC era 

if you want me to tell you to not worry it will come to and end then no but I can tell you that once the ASIC prototypes are available in a large scale and once the network diff. growth will surpass the price growth which is happening now the ASIC era will slow down...

an estimate on when we will have 3d-printable ASICs?

[surfer43]

Explanation

Explanation

We are going to the moon. See you at 1500

[empowering]

Explanation

Explanation

We are going to the moon. See you at 1500

Moon is a moving target

We need to catch it and lock it up in the basement

[surfer43]

Explanation

Explanation

We are going to the moon. See you at 1500

Moon is a moving target

Bitcoin is more like J002E3 or whatever it's called

[KeyserSoze]

Moon is a moving target

Cool graphic. Reminds me of Spirograph.