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

[Erdogan]

 Is there any evidence to the belief that expansions in the bitcoin ecosystem, services & economy actually increase the price..??
...
 So why in the WORLD is there this MYTH continuing about merchant adoption, growing ecosystem = higher price? Wtf? What am I missing..?

Welcome to the forum! Hope you've had the good first 6 days. Btw. the question is off-topic for this thread but let's not be picky.

Your question is discussed for example here.

Ok, though it's worth noting that a 'transaction' for bitcoin generally means something different than for PayPal/Mastercard etc - especially at this point.
For current figures, most bitcoin transactions aren't purchases, they're people moving coins to and from exchanges, between their own addresses, etc. Whereas I imagine almost every PayPal transaction is someone buying a Thing of some sort.
No doubt that will change, but the current figures aren't representative of use or adoption.

They still are to some extent; if the transactions represent real people who need to do the transactions; a growing number of transactions means growing adoption

The money velocity, talked about in econometrics, is not a useful measure. All transactions are not alike, and financial transactions are taken out. It is supposed to mean transactions where real goods are exchanged. Therefore measuring the velocity has the same problems as GDP and various price indexes. In short, it is meaningful only in the bizarre world of Krugman (which means it is not meaningful at all).

The value of bitcoin, all kinds of money, is the demand to hold. Every time you sell, you depress the value, and any time you buy, you raise the value.

This is the same for any trade. When you buy a hamburger, you raise the value of hamburgers and depress the value of money. Of course there is someone on the other side of each trade.

[JorgeStolfi]

Only if they hold BTC, if they convert straight to fiat as most do then it actaully creates downward pressure on the market.

No, even if they immediately exchange for another currency, it still creates a demand when people use BTC.  While that BTC is in the air, it can't be used for anything else.  The number of BTC-days consumed in the transaction is a reduction in money supply.

I don't follow...

The demand would go up very little if people were buying BTC for the purpose of spending them right away.  Each transaction of this type would decrease the circulating bitcoin supply (CBS) for a short time but that would be reveresed when the merchant or payment processor converts the BTC back to fiat. Therefore, the persistent decrease of the CBS from these uses would be proportional to the (total daily BTC volume V1 in these transactions) x (time T that each of those BTC stays off the system).  As long as transaction volume remains constant, this term will not change the CBS.

However, some of the bitcoin purchases are being made by people who were hoarding BTC and started spending some of them.  Assuming the coins are converted to fiat by selling on market, each of those transactions increases the CBS permanently by the amount transacted.  So these transactions keep increasing the CBS as time passes.  

I would guess that most of BitPay's 100 M$/year volume in 2013 is due to the second type of transaction, because buying bitcoins just for e-payment does not seem to be sufficiently attractive to people who do not own bitcoins already.  If we assume a 50-50 split, and off-market time T of 3 days then perhaps 0.5 M$ worth of bitcoins were taken out of the CBS temporarily by type 1 transactions, and 50 M$ worth of coins were permanently added to the CBS by type 2 transactions last year through BitPay. 

EDIT: clarified "last year"

EDIT2: Clarified "through BitPay". The same analysis should apply for commercial payments that do not use BitPay. Is there an estimate of this volume?

[TERA]

The train is rocketing up right now.

The train has slowed down but it is still going up.

We're going up after this brief consolidation.

We're going up after a long consolidation.

We're going up after this small dip.

We're going up after a large dip.

Ok it's crashing but it's not going to go below the last support.

It's only going to go a little bit past the last support.

It could go anywhere but fundamentals will bring it back up eventually.

[0x3d]

http://bitcoinsounds.0x3d.lu/

Improved version now online!

[oda.krell]

The train is rocketing up right now.

The train has slowed down but it is still going up.

We're going up after this brief consolidation.

We're going up after a long consolidation.

We're going up after this small dip.

We're going up after a large dip.

Ok it's crashing but it's not going to go below the last support.

It's only going to go a little bit past the last support.

It could go anywhere but fundamentals will bring it back up eventually.

I'm convinced we'll see ~470 again pretty soon (38% fibo), and probably ~440 as well (50%).

What matters is how price will react to to those levels. Going through them with no support: March false breakout all over again. Putting up a fight: Maybe it's July 2013 after all.

[Cassius]

The train is rocketing up right now.

The train has slowed down but it is still going up.

We're going up after this brief consolidation.

We're going up after a long consolidation.

We're going up after this small dip.

We're going up after a large dip.

Ok it's crashing but it's not going to go below the last support.

It's only going to go a little bit past the last support.

It could go anywhere but fundamentals will bring it back up eventually.

I'm convinced we'll see ~470 again pretty soon (38% fibo), and probably ~440 as well (50%).

What matters is how price will react to to those levels. Going through them with no support: March false breakout all over again. Putting up a fight: Maybe it's July 2013 after all.

This makes a lot of sense. The 'bottoms' that people have called so far have seemed far too bouncy for me. I don't know a great deal about TA and the way markets move, but shouldn't a capitulation be a bit more depressingly flat, rather than recovering 30% in a matter of hours/days?

[oda.krell]

The train is rocketing up right now.

The train has slowed down but it is still going up.

We're going up after this brief consolidation.

We're going up after a long consolidation.

We're going up after this small dip.

We're going up after a large dip.

Ok it's crashing but it's not going to go below the last support.

It's only going to go a little bit past the last support.

It could go anywhere but fundamentals will bring it back up eventually.

I'm convinced we'll see ~470 again pretty soon (38% fibo), and probably ~440 as well (50%).

What matters is how price will react to to those levels. Going through them with no support: March false breakout all over again. Putting up a fight: Maybe it's July 2013 after all.

This makes a lot of sense. The 'bottoms' that people have called so far have seemed far too bouncy for me. I don't know a great deal about TA and the way markets move, but shouldn't a capitulation be a bit more depressingly flat, rather than recovering 30% in a matter of hours/days?

Depends, I'd say. In July 2013 we saw an almost immediate recovery of more than 50% up from the final capitulation bottom.

Then we lost a lot of that in the following week(s), especially through one large dump on July 18.

What made the reversal last however (imo) was how price found support across some of the levels. It went quite low, but touched the 61% retracement once. Then recovered really beautifully. 20 days after the first post capitulation swing up, we had a new high.

That's the situation I'm (more or less) looking for to consider we've really left the bear market of 2014 behind.

[ChartBuddy]

Explanation

[adamstgBit]

get your tickets now

train leaving soon



If you don’t believe me or don’t get it, I don’t have time to try to convince you, sorry. -Satoshi

[dreamspark]

get your tickets now

train leaving soon

I think you came out of cryo around the wrong time Adam

[podyx]

Beartrap coming up

[windjc]

The train is rocketing up right now.

The train has slowed down but it is still going up.

We're going up after this brief consolidation.

We're going up after a long consolidation.

We're going up after this small dip.

We're going up after a large dip.

Ok it's crashing but it's not going to go below the last support.

It's only going to go a little bit past the last support.

It could go anywhere but fundamentals will bring it back up eventually.

I'm convinced we'll see ~470 again pretty soon (38% fibo), and probably ~440 as well (50%).

What matters is how price will react to to those levels. Going through them with no support: March false breakout all over again. Putting up a fight: Maybe it's July 2013 after all.

I think we are going down too. But it looks like its going to be slow and painful. Despite this really boring "contraction"  I don't see a major move. I think its going to be like March, a slow boring bleed out. I think every resistance point is going to resist.

It may take us weeks to have a chance of a real volume fight.

[windjc]

The train is rocketing up right now.

The train has slowed down but it is still going up.

We're going up after this brief consolidation.

We're going up after a long consolidation.

We're going up after this small dip.

We're going up after a large dip.

Ok it's crashing but it's not going to go below the last support.

It's only going to go a little bit past the last support.

It could go anywhere but fundamentals will bring it back up eventually.

This is actually a very funny post.

But as bearish as Ive sounded lately, I am not convinced we are going to market too many more of that list.

[magicmexican]

Looks like that 12h MacD does not fuck around, i wonder if 450 will hold

[Erdogan]

Sometimes I think that the sentiment this thread rules the market.

[adamstgBit]

470 is long gone

it will only go up

This is the train



You've been waiting for

[ChartBuddy]

Explanation

[Guinpen]

Looks like that 12h MacD does not fuck around, i wonder if 450 will hold

Could someone please explain this whole MacD stuff for us newbies? Thanks.

[windjc]

Sometimes I think that the sentiment this thread rules the market.

Lack of fresh fiat rules the market. Maybe if we continue down slowly for the next 3 weeks, perma bulls will finally admit this.

Maybe sometime after that we can get a real final capitulation.

[bigdave]

Surely if we continue dropping we will hit a point where all the bulls will start mass buying and hopefully drive the price back up.