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

[ChartBuddy]

Explanation

[Walsoraj]

The price wasn't exactly going to the moon before the china ban rumor. Total bid sum on Stamp continued to decline and we saw repeated fail pump attempts.

This is going to change if the rumor turns out to be false? Yea right.

[JayJuanGee]

I believe we'll see consodilation for some days or maybe even weeks before we start a new uptrend and a new journey to a new ATH (my guess is $6k)

IMO bitcoin will not become worth multiple thousand dollars as long as many people expect this to happen in the near future. I think it more likely that 2014 will become the first year where BTC ends lower on dec 31st than where it started in January.

January 1st, BTC was around $750.. and through the month it approached $1k... but returned to around $750.  Are you saying BTC is going to be lower than $750 or lower than $1k on December 31?  There is too much of a range in your prediction.    Also, what is going to happen between April 2014 and December 2014?  We gonna go up above ATH and stay there for a while and then crash in the end of December?   Your prediction lacks in specifics... except for your seeming suggestion that BTC is more or less flat and/or downtrending for the year rather than uptrending...   

I cannot really foresee BTC floating below $750 all 2014... but I could see BTC floating below 1K for most of the year... but it also seems quite likely that we are going to see an ATH sometime during 2014... too... what do  you think, JCviggen, more specifically?

[podyx]

I believe we'll see consodilation for some days or maybe even weeks before we start a new uptrend and a new journey to a new ATH (my guess is $6k)

When we gonna get to 6k?  

I am sorry but I proclaimed that I was a HODL kind of guy... however, if we get to 6K very quickly, as in within the next year, I am going to have to SODL a bit in order to relieve myself somewhat... and then buy in again at $4000... he he he... .. but then if we convert to mBTC, then that will only be $6 per mBTC and $4 per mBTC respectively.. .what a bargain!!!!!!!

Well, I expect a large bubble in june or july

A more correct price at the time of the $6k peak however would be $1.5k-3k

But people are gonna get greedy and overbuy of course, like we all seen, atleast 1 more time, probably 2 then we will see a more stable rise

Past events might not replay but I believe it will simply because bitcoin is new and nobody really has a clue what it fucking is

However, i am no professional and refrain from helping with financial advises, hence my signature this is simply my belief and im just posting for perspective/discussion

Also, I largely base this prediction on https://www.tradingview.com/v/7YEmxS3K/ (press play button at right) which shows we are at the bottom

And the reason I believe in that chart is because I really do believe bitcoin is a honeybadger. If it wasn't for chinese people who brought us to 1.2k I think there would be other people bringing us above $1k because it undervalued and then comes overbuying. And overselling right after that. And then it repeats because of statements I made above. This would make no sense in a normal market but again, I draw this conclusion because it's something new and nobody really knows what it is and what it's future holds, if any.

That chart however is probably slightly bullish because it's only showing the year of 2013.
It is suggesting, on average, a ~17x rise every year

I believe 10x is a more accurate pattern which the last 5 years have been suggesting too, in the big picture that is.

[JayJuanGee]

 At current difficulty growth rates, if hardware margins go to zero, by July it will cost $3000 to buy and operate hardware which produces 1 btc after 1 year of operation.

How is that relevant? It doesn't change the equation of how much money needs to come into BTC. Difficulty will not grow forever, it's likely to overshoot putting small scale miners into the red, sure. But that doesn't drive the price.

Margins drive price.  The equation is a constraint but cannot drive price and it only applies under the assumption that the coins are sold.  If I buy a miner in the full knowledge that it will produce 1 coin costing $3000, that means I do not plan to sell that coin until it goes over $5000.  Supply withheld from the market is no supply at all.

 The only miners selling coins at this price are wealthy attackers who want to burn fiat in order to drive btc down.  They exist only in the minds of the paranoid.

You got it backwards.

BTC price drives demand for mining equipment. If you can spend $10k on equipment that will generate virtual currency you can sell for $20k then people will want and buy that equipment.

A lower BTC price does not translate to less coins being sold by miners, it just means there will be less demand for mining equipment.

If you buy a miner in the full knowledge that it will produce 1 coin costing $3000 then you're a complete idiot. You're just desperately trying to convince yourself that the BTC price will go up because you believe people are willing to do what is obviously very bad investments.

I have seen this $3k being thrown about... and is it a very accurate calculation or even approximation or price to produce a BTC in a year or so?  I understand difficulty going up etc etc... but it if it is really true that cost to produce a BTC is going up to anywhere in the ballpark of $3k per BTC within a year or so, then we are gonna have to have BTC prices above $3k in that same time frame.. otherwise it makes NO logical sense that very many people or machines would engage in such BTC mining.

[JorgeStolfi]

The price wasn't exactly going to the moon before the china ban rumor. Total bid sum on Stamp continued to decline and we saw repeated fail pump attempts.

This is going to change if the rumor turns out to be false? Yea right.

If the rumor is false, I expect that the price will go back up to the pre-rumor level (around 3500--3700 CNY or  580--610 USD), and then resume the slow descent from there.

However there may be a permanent residual price drop, due to people becming aware that such a ban is possible in the future even if not right away.

[JayJuanGee]

. Lots of money was lost there, putting people permanently out of the game. Gox was one of the major, if not the major propellant upwards. With that money out of the game and not supporting the high price anymore, the price is set to go a lot lower than 500.

Permanently out of the game means dead.  I don't think they died.
Gox victims have a lot of btc to buy if they hope to recover. 

Yeah, that's how people think..."hhmmm...I lost a load of money on BTC...I have no money left...I'd better work harder to buy MORE BTC".

C'mon...

Hey.... that is what i have been doing.. more or less...  It is called dollar cost averaging and I do NOT believe that i am crazy.. b/c it is an investment strategy.. have you heard of it?  It is a pretty solid investment strategy when predicting that an asset is going to go back up in value.  I began investing in BTC at $1200.  And, BTC prices have been declining ever since.  I have been buying BTC when the prices gets lower.

My average buy in price began at $1200, and currently, my average buy-in price is down to about $670 - including transaction fees.  So, one of the ways that I get into the black, is if the price goes back up above my average price per BTC.  If BTC prices continue to fall, as you naysayers seem to be predicting, then I will lose quite a bit.  At this point, if I were to sell my BTC holdings, out of fear that the BTC sky is falling, I would lose about 25% of my investment funds...

I am NOT going to sell any of my BTC at this time and lock in losses, b/c I am quite confident that we are going back up above my average buy in price.  If the price continues to lower or linger in these lower price areas, then my average BTC buy in price will continue to come down, and accordingly, the BTC price does NOT have to go up as high for my BTC investment portfolio to be back in the black... .

Anyhow, should take place within the next month or two.. and if it does NOT, I am willing to wait it out.. b/c initially I though that I was investing long term.. .in the at least 2 year time frame, absent some catastrophic reason that would signal cashing out... which has NOT taken place, yet.

[JayJuanGee]

Gox is not out, they still admit to hold 1/3 of the money, the quiestion now is when will they pay back? I don't really understand what's going on with them, they lost some BTC and still hold some, why not redistribute those among their clients to at least show some good will?

When GOX is under the supervision of various courts, their hands are likely QUITE tied concerning whether and how they could engage in any kinds of distribution... b/c court(s) have to agree to distribution and various creditors have to be given an opportunity to be heard and to sufficiently understand the situation in order to be given an opportunity to be heard... once in the court system.. distribution becomes much delayed by the whole process of allowing the various stake holders to be heard and to be notified about the situation.. which seems to be evolving as GOX "finds" more coins.

[aminorex]

big move coming soon, probably in the next 48h

Of course, in 48 hours we will probably know whether the "PBoC ban" rumour is true or not.  Either way, we can expect a large change in price.

The most we can expect in that regard is a confirmation of the circular directive closing bank accounts linked to exchanges.  It will not change the market action significantly, because that has been known since December.  It will not affect trading in China significantly because anyone still in the market has other exit strategies at this point.  It's a leaky bucket.  It will prevent dramatic growth in exchange user bases, no doubt.  Did anybody expect dramatic growth in exchange user bases, in China, since December?  I think not.  It's not even a sentiment event.

[aminorex]

. Lots of money was lost there, putting people permanently out of the game. Gox was one of the major, if not the major propellant upwards. With that money out of the game and not supporting the high price anymore, the price is set to go a lot lower than 500.

Permanently out of the game means dead.  I don't think they died.
Gox victims have a lot of btc to buy if they hope to recover. 

Yeah, that's how people think..."hhmmm...I lost a load of money on BTC...I have no money left...I'd better work harder to buy MORE BTC".

C'mon...

Hey.... that is what i have been doing.. more or less...  It is called dollar cost averaging and I do NOT believe that i am crazy.. b/c it is an investment strategy.. have you heard of it?  It is a pretty solid investment strategy when predicting that an asset is going to go back up in value.  I began investing in BTC at $1200.  And, BTC prices have been declining ever since.  I have been buying BTC when the prices gets lower.

Yes, you are probably behaving rationally under your assumptions, to a high degree -- whether you are correct or incorrect about your price trajectory assumptions is another question.  But I think  creekbore's point remains:  Mass psychology is somewhat less rational, more brutish and reactive.  "Once burned, twice shy" is an apt aphorism describing his inferred assumptions about market behaviour.

[aminorex]

You got it backwards.

BTC price drives demand for mining equipment. If you can spend $10k on equipment that will generate virtual currency you can sell for $20k then people will want and buy that equipment.

A lower BTC price does not translate to less coins being sold by miners, it just means there will be less demand for mining equipment.

If you buy a miner in the full knowledge that it will produce 1 coin costing $3000 then you're a complete idiot. You're just desperately trying to convince yourself that the BTC price will go up because you believe people are willing to do what is obviously very bad investments.

I am not saying the causal flow is one direction.  I am saying it is vicious cycle.  When price is low, mining is attractive because it is profitable.  Miners rush in.  Mining becomes difficult and competitive.  As a result, miners cannot sell their coins, because they would take a loss.  Consequently, supply is restricted.  Prices rise.  Again mining is attractive.   It is similar to predator-prey dynamics, or a coupled oscillator system, with all the quasi-periodicity that entails, but in this case, it is confounded with exponentially expanding demand.  As a result it is a vicious rising spiral.

I think the data makes this obvious.  Do you really disagree?

[JayJuanGee]

big move coming soon, probably in the next 48h

Which direction, and how do you know?

[arepo]

one thing that ive rarely seen come up in solar power conversations is the fact that you are capturing a huge fraction of the solar energy onto the black panel, rather then reflecting it back into the air/space like if it hit water or hit green foliage. Solar Panels effectively act like blacktop pavement in that regard.

MO, the future is wave power and nuclear.

are you implying that this is problematic because of the "heat island" effect? blacktops heat up because the solar energy is absorbed because of the color and must be dissipated in some form -- that form is heat. solar panels absorb the same energy but effectively convert it into electricity. hence, solar panels would not act like blacktops because of the principle of energy conservation.

--arepo

[JayJuanGee]

big move coming soon, probably in the next 48h

Of course, in 48 hours we will probably know whether the "PBoC ban" rumour is true or not.  Either way, we can expect a large change in price.

The price is NOT likely to spurt up in the event that the PBOC ban rumor is NOT true.. but the price may spurt down if the rumor were to be true (highly unlikely that the rumor is true in my opinion).  

And, clarification.. when is that going to come.. maybe the rumor will linger for a week or more.. no assurances to get clarification any time soon

[aminorex]

I have seen this $3k being thrown about... and is it a very accurate calculation or even approximation or price to produce a BTC in a year or so?  I understand difficulty going up etc etc... but it if it is really true that cost to produce a BTC is going up to anywhere in the ballpark of $3k per BTC within a year or so, then we are gonna have to have BTC prices above $3k in that same time frame.. otherwise it makes NO logical sense that very many people or machines would engage in such BTC mining.

Small differences in assumptions lead to radically different outcomes.  Here's a sheet based on the most optimistic cost-effectiveness assumptions I can justify (dragonminer):
https://tradeblock.com/mining/a/0ffeb25931

Short story:  It breaks even in November if BTC is not sold until 950 USD.  After that it loses money.  Monthly electric is 65 USD.  If miners were free, and difficulty continued at the current growth rate, in 4 years you could not mine a $500 BTC, ever, unless with very advantageous power costs.

Even if some share of BTC is mined at much lower cost  (but it isn't, really, since large scale operations have high initial plant costs, which retail miners do not pay, or rather amortize over their sunk domicile costs) it is the marginal producer who determines the marginal supply.

*That* is the critical point for price dynamics.  Prices fall until enough marginal producers with-hold their supply so that demand exceeds supply at the market clearing price.  When prices rise, some of that supply comes back into the market.  If future marginal supply has higher cost than present marginal supply, then the price rise required in order to draw out that supply is greater.  The result is upward pricing pressure.

[aminorex]

big move coming soon, probably in the next 48h

Of course, in 48 hours we will probably know whether the "PBoC ban" rumour is true or not.  Either way, we can expect a large change in price.

The price is NOT likely to spurt up in the event that the PBOC ban rumor is NOT true.. but the price may spurt down if the rumor were to be true (highly unlikely that the rumor is true in my opinion).  

And, clarification.. when is that going to come.. maybe the rumor will linger for a week or more.. no assurances to get clarification any time soon

What rumor?  You mean the rumor Jorge just started?  I hadn't heard of a "ban" until Jorge mentioned one.  All that Caixin said was that withdrawals from exchange bank accounts would cease on the 15th.  Deposits are already halted.  BTC trading continues regardless.  The only interesting questions are what the change in funding methods implies for the volume and price in onshore RMB, and how that affects the free markets.

[spooderman]

A while away we learned that some internet trolls are paid to do what they do by some government agencies.

Jorge is a good example of this.

This the simplest explanation for someone spending so much time talking about something they don't rate very highly.

[JorgeStolfi]

The most we can expect in that regard is a confirmation of the circular directive closing bank accounts linked to exchanges.  It will not change the market action significantly, because that has been known since December.  It will not affect trading in China significantly because anyone still in the market has other exit strategies at this point.  It's a leaky bucket.  It will prevent dramatic growth in exchange user bases, no doubt.  Did anybody expect dramatic growth in exchange user bases, in China, since December?  I think not.  It's not even a sentiment event.

Between Dec/20 and Jan/01 the Chinese exchanges became convinced that they could still operate legally as they do today: namely, that clients could still get money in or out as long as it was in yuan, via the exchange's corporate bank accounts.  It is clear that they did not expect that channel to be closed, and almost certainly it has been the main deposit and withdawal channel since then.

Yes, no one shoudl have been expecting an increase in client base in China after the December decrees, because they closed most of the potential uses of bitcoin in commerce and in the finance industry.  However trading still went on, basically for investment or speculation, with far more volume than in the West.

I am quite convinced that the Chinese exchanges were responsible for the price rise from ~100$ to ~1100$ on October-November, for the recovery in late december, and for its support at the current level.  Does anyone doubt that they were responsible for the crash in early December, and for that of last Thursday?

In my understanding, the price has been declining since january because Chinese investors and speculators have been gradually taking their money out of the bitcoin market.

If this "PBoC ban" rumor is true, most of those clients will probably sell their BTC at a low price and take the money out before April 15.  They could move their BTC to their wallets or to foreign exchanges, but what would they do with them?

I can't imagine what would happen after April 15 if the ban is true.  Perhaps, before that date, all the coins in the Chinese markets will be bought by arbitragers to sell on the Western exchanges, or by the subset of the investors who can take money out after April 15 by other means, such as cash or vouchers. (I don't know how those vouchers work, but doubt whether one can move a million Yuan with them.)  Trading may continue after that deadline, but surely not as vigorous as today.  there will be fewer traders, fewer investors, and diminished hopes of short or medium-term gains.

Thus, if the ban report is true,  it can only lead to a substantial and persistent drop in BTC price between Monday and April 15.

[JorgeStolfi]

What rumor?  You mean the rumor Jorge just started?  I hadn't heard of a "ban" until Jorge mentioned one.  All that Caixin said was that withdrawals from exchange bank accounts would cease on the 15th.  Deposits are already halted.  BTC trading continues regardless.  The only interesting questions are what the change in funding methods implies for the volume and price in onshore RMB, and how that affects the free markets.

Come on, "ban" is a shorthand for "ban on the use of bank accounts to move money into or out of the exchanges".

Deposits are NOT already halted, that is part of the rumor.  If the rumor is false, everything will continue as it is now, with withdrawals AND deposits through the exchange's bank accounts.

[JayJuanGee]

I believe we'll see consodilation for some days or maybe even weeks before we start a new uptrend and a new journey to a new ATH (my guess is $6k)

When we gonna get to 6k?  

I am sorry but I proclaimed that I was a HODL kind of guy... however, if we get to 6K very quickly, as in within the next year, I am going to have to SODL a bit in order to relieve myself somewhat... and then buy in again at $4000... he he he... .. but then if we convert to mBTC, then that will only be $6 per mBTC and $4 per mBTC respectively.. .what a bargain!!!!!!!

Well, I expect a large bubble in june or july

A more correct price at the time of the $6k peak however would be $1.5k-3k

But people are gonna get greedy and overbuy of course, like we all seen, atleast 1 more time, probably 2 then we will see a more stable rise

Past events might not replay but I believe it will simply because bitcoin is new and nobody really has a clue what it fucking is

However, i am no professional and refrain from helping with financial advises, hence my signature this is simply my belief and im just posting for perspective/discussion

Also, I largely base this prediction on https://www.tradingview.com/v/7YEmxS3K/ (press play button at right) which shows we are at the bottom

And the reason I believe in that chart is because I really do believe bitcoin is a honeybadger. If it wasn't for chinese people who brought us to 1.2k I think there would be other people bringing us above $1k because it undervalued and then comes overbuying. And overselling right after that. And then it repeats because of statements I made above. This would make no sense in a normal market but again, I draw this conclusion because it's something new and nobody really knows what it is and what it's future holds, if any.

That chart however is probably slightly bullish because it's only showing the year of 2013.
It is suggesting, on average, a ~17x rise every year

I believe 10x is a more accurate pattern which the last 5 years have been suggesting too, in the big picture that is.

YOU may be correct, but I really have a hard time believing any straight line analysis for any asset class, and models that show various phases of an asset make more sense to me, like we are going to have spurts, and those spurts depend upon adoption, marketing, political circumstances, legal framework, competition, manipulation and other factors and how those factors may play out.  Surely, we have had the performance of various kinds of assets that may kind of resemble bitcoin in a variety of ways..and then again, bitcoin has some unique properties..   


Also, retroactively, you may be able to look at any specific asset and see that it has performed in a straight line, even though it may NOT have seemed straight, while going through the ups and downs... ..

Sometimes a very high growth rate may cause a pulling back b/c the asset class's growth has outpaced its infrastructure... anyhow, even getting a doubling of bitcoin on a yearly basis would be amazing.. I doubt that we can really sustain a ten times grown on a yearly basis for any extended period of time.. even though maybe we could get 10 times growth for the next 2 to 3 years... and surely it is possible for longer.. but real pie in the sky to be banking on any kind of expectation that would generate that kind of growth over that period of time.