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

[Cassius]

To clarify, your models suggest that:
1) BTC will bottom out in the period you have suggested (shortly after the China deadline, as it happens)
2) The US stock market is due for a downturn later this year (pointing to an economic downturn a few months later?)
3) Therefore Bitcoin 'outperforming' in this context could mean no growth at all, while the stock markets dip

What are your models' track records?

Correct.  The broad market model gives me roughly an 12% edge on directional r2k futures positions over 1 month.  The BTC model is not mature enough to measure accurately.  The more parameters in your model, the more data you need to avoid overfit.  BTC doesn't have enough history to provide useful quality metrics on a scale more than a few hours, for models of this complexity.  I've tried to use some tricks to avoid overfit, but I can't yet quantify my success or failure in that regard, for the current model, with a usable p value.

Thanks. So another way of putting this might be:
"Not sure about bitcoin. By the way, recession in 12 months."

[Syke]

it seems quite possible that the Chinese speculators (active exchange clients) own 80-90% of all the bitcoins owned by speculators worldwide. 

lmao

[aminorex]

1) Once sellers are done? You do realize that at this moment bitcoin is still inflationary right?
2) Increased adoption? China has just stated that it does not want anything to do with bitcoin, as well as Russia, so global must mean the rest of the world, excluding the two largest countries on earth?

1) Supply in reserve is not supply to the market.
2) Whether the PBoC wants bitcoin or not, the Chinese people want bitcoin.  I frankly wasn't counting on the PBoC being a buyer for another 5 years or so.

I general I agree that the last bubble was largely China-driven.  This is normal.  There is always something that drives the bubble, and something that drives the decompression that follows.  Every time a bubble occurs, it is indicative of more fiat finding its way into BTC.  The 2011 superbubble -- correct me if I err -- was driven by the opening of Mt.Gox, a stable exchange (at the time).  That removed the barriers for a large tranche of fiat to flow into BTC.  It seems obvious that the next bubble will occur when a new mechanism, lowering the fear, cost and inconvenience barriers, allows a larger influx of fiat precisely at a time when the BTC bonanza meme gets resurrected.  The heartbeat schedule would put that event in the summer.  If it skips a beat, then it would more likely coincide with the opening of ETPs in New York and London.  In that case, it is likely to be another superbubble, because it would facilitate a much much larger money flow than previous channels have allowed.

Meanwhile, we will continue to grind down until all the coins have flowed from weak hands to strong hands.  I keep buying small amounts because I think it is premature to lever, but we are close enough to the bottom so that I see more risk of being caught unawares by a sudden CCMF than I do risk of missing a deep-cutting plunge which increases my buying power substantially.  I don't want to watch the paint dry in hopes of a sudden opportunity -- did that, found it unfruitful in low volatility conditions.  I'd rather just average in near the bottom and leave a modest order in the 350 neighborhood in case I'm lucky.

[Ultros]

[aminorex]

if a small fraction of those coins were to be dumped on the public market, they could easily push the price below 100$/BTC.  There is no dispute on this point, I suppose?

True.  And if China dumped their tsys on the market, interest rates would go over 100%.  Both are counter-productive behaviours, and hence unlikely.  Actually, the China scenario is more likely, because it could be a rational move, in a trade war or a shooting war.  Dumping a million BTC is extremely unlikely to be a rational move, ever.

[ChartBuddy]

Explanation

[Spaceman_Spiff]

thought it was funny so i share

, made me lol.

[N12]

Hey Guys look what I found on pastebin, looks like someone leaked some marching orders from the puppet masters.

How embarrassing!

Troll Talking Points
 May 6th, 2014

Greetings gentlemen, first let me start off and say you have been doing very good work lately.
However we would like to remind you that you need to post in other forums besides Speculation,
as it is becoming quite apparent when you purchased your account from a real member since the account
stopped posting in other forums. Remember keep up your appearances, so as to not blow your cover.

Also some of you have been posting too much in "TOTAL TROLL" mode. Remember you need to dial it back
every now and then and post like an actual moderate bear would. This lends you creditability for your
"TOTAL TROLL" mode, when it is deemed necessary by the powers that be. And also keeps the actual bears
on your side, and they will even back you up sometimes... LOL.

Now onto today's talking points:

* OPERATION FUD - People were starting to react positively to the term FUD being thrown around, and it was
  starting to dilute our message. As you know the effort to re-term it to mean Fact U Dislike has worked moderately.
  Please keep mentioning it when someone points out our actual use of FUD.
  
* CHINA, CHINA, CHINA - The powers that be are coming to the end of the China ban milking. Now that China's actual
  influence on the markets has dwindled its time to switch tactics. Let's try "China is the only thing that makes
  Bitcoin worth more than $100". Find correlations between events in China to price rising and failing. Nevermind
  the growth outside of China, keep them focused on China. We want maximum panic when the exchanges finally mention
  they are leaving China.
  
* CHARTS - Now that you've all been through "negative slope" training, don't forget throw up a couple trendlines
  that point out how Bitcoin is going down to $0. Remember its not you making the numbers go down, its just what
  the trend it pointing out. Don't forget an emoticon for an effective reaction
  

That's it for today. Your Bitcoin payments are on their way. Don't forget to put your shorts in, as you know we
definetely will let YOU know when the squeeze begins.

That's hilarious.

[shmadz]

While everyone is bored, what about the transaction fee fraud Bitstamp is doing?

(I assume most of you trade there)

https://bitcointalk.org/index.php?topic=597647.0

"fee fraud"... big words, huh?

Fact is, I knew about it, but it doesn't affect me more than for just a few cents (despite large volume), because I don't trade with bots or by splitting up a large trade into many small ones.

I can see how it would affect two types of traders: those that use bots to make many very small trades, and the example from the thread, of putting up a large order, and then having someone else "nibble" at it, thus driving up the relative fees.

Not ideal, but I have to ask: how do you prefer it to work otherwise? Rounding to a full cent seems reasonable, so the only solution I can see it calculating the x% fee they advertise over some time span's volume, as opposed to the volume of each (tiny) trade, which is then rounded up to a cent. I can see how Bitstamp would consider that an unnecessary effort to save some traders a few cent.

In either case, and in the spirit of choosing your words super carefully in here (remember kids, there are Bitcoin /fanatics/ in here, not /cultists/), the term "fraud" is entirely misplaced.

emphasis mine.

This is a dirty, underhanded way of calculating fees. the fees that market maker is charged should not be determined by the market takers.

How would I prefer it to work? Just look at CaVirtex as an example. when you place the order, you pay a fee. both the fee and the order are placed in escrow until the order is filled. if you cancel your order, both the amount of the order plus the fee are refunded to your account. - simple system, easy accounting.

Hopefully this is just a bad implementation of their processes, but it is a very shady set-up regardless of how it came about.

[JorgeStolfi]

Chinese markets were open as early as 2011 so your mistaken [ in relating them to the Oct/2013 bubble ]. .

Are you refering to BTC-China?  When did Huobi and OKCoin open?

On Bitcoinwisdom, BTC-China's data starts 2011-06-09 with ~1.5 BTC/day, OKCoin's data starts on 2013-06-12 with 0.004 BTC/day, Huobi's starts on 2013-09-01 with 134 BTC/day.  BTC-China always charged trading fees; I am not sure about OKCoin, but I think I read that they initially charged fees until Huobi came up with its zero-fee policy and they had to follow.  So maybe it was the zero-fee trading by Huobi, specifically, that attracted the Chinese habitual speculators.

I cannot follow that reasoning.  The busting of SR made people realize that bitcoin transactions were not invisible to the FBI at all. How could that have helped other uses?

The "cleansing"of bitcoin's image (which did not actually happen, it is still the "coin of crime" for many people)  cannot possibly explain a rise of 1000% in 2 months.  "Other uses" could not and did not expand that fast.  The Chinese market could and did.

By the way, I still don't know what caused the April/2013 jump.  Some said it was videos on YouTube; perhaps.  Could it have been the opening of the illegal drug market by SilkRoad?  Or was it the initial opening of the non-Mainland Chinese market by BTC-China?

The only thing people like you had to say about BTC was its just used for buying drugs theres no other reason for it etc etc. Well look , the price didn't go to $0 as many were trying to say guess what that does? All the detractors who wrote it off as drug money are suddenly very interested, I mean how can something that was only used to buy drugs have value outside of drugs  

Really with the same old rhetoric ? The dollar and its ponzi scheme is the coin of crime.

There can't possibly be other people like me.  

It is not me who is saying that "bitcoin is the coin of crime", that is still a common perception out there.  But on the other hand, based on what people write here and in other forums, I would think that at least 10% of the bitcoin enthusiasts still love it because they (naively) think that it will allow them to make illegal payments and protect their illegal money from confiscation. ("Illegal" here in the literal sense of "prohibited by the laws of the land and times."  That includes tax evasion, bribes, contributing to outlaw organizations, etc.)

Silk Road was open in 2011 so no.

Well, then that leaves only BTC-China and those YouTube videos.

By the way, Wikipedia says that "Company CEO Bobby Lee [ who had experience in Yahoo Exclamation and Walmart China ] approached the then two-person company in early 2013, and after investing his own money and attracting investors, oversaw the company's rapid expansion and marketshare growth by the end of the year."  Which seems to fit quite nicely with the timing of the April 2013 bubble...

You seem to think the market is 100% speculation and needs 'news' to move. The market can move by normal dynamics such as adoption as well you know.

The bitcoin market now is still probably >95% speculation.  Dumping by miners and buying for long-term investment must be a small fraction of the exchange's volume, and buying for use in commerce must be almost nil.

I agree that mere "news" have little influence in the market.   The things that moved the market since Dec/2013 were not "news" but hard facts (sometimes false): the December five-agency decree, the Huobi and OKCoin workarounds, the "bug in bitcoin", the bank account closures.  News were merely the channel through which the market learned the facts.  

On the other hand, many of the "positive developments" that people keep mentioning here were just news (rather: thinly edited commercial press releases) which did not materialize.  

As it currently stands millions of dollars of vc funds and normal investors are building Bitcoin businesses, everyday those services open and gain a wider customer base.

I see venture capital and established investors shunning bitcoin per se and investing instead in services like Bitpay, bitcoin fund management (SMBIT, PBP), and exchanges, which are profitable independently of the price of bitcoin.

Bitpay for example claimed to have made 100 M$ of payments last year.  Their revenue is the fees on that, a few million dollars.  They must still be lucrative in spite of the 50% BTC price loss since January.   But how much of that volume is new bitcoin adopters, and how much is bitcoiners who have piles of cheap old BTC and are spending some of them?

EDIT fix bad [ quote ] marks

[ChrisML]

$2100,- at the end of august?


2 DA MOON.

[JorgeStolfi]

[ ... ]

Jorge has been wooed by Chinas pretty volume numbers and actually thinks they own 90% of the coins.

GIGO

Garbage in, garbage out

Ahem, ahem, my Masters thesis in 1979 was on garbage collection.  So THAT is something I am competent at.  

You should see my office if you don't believe it.  

EDIT fixed [ quote ]s

[N12]

Choice FUD4U: Without Emptygox artificially inflating the price by disallowing SWIFT withdrawals (as happened since April 2013) and thus dragging up all the other markets thanks to its former market leader role, will it be as easy?

[adamstgBit]

[ ... ]

Jorge has been wooed by Chinas pretty volume numbers and actually thinks they own 90% of the coins.

GIGO

Garbage in, garbage out

Ahem, ahem, my Masters thesis in 1979 was on garbage collection.  So THAT is something I am competent at.  

You should see my office if you don't believe it.  

you done so many interesting things

you should buy a bitcoin, so in the future you have one more amazing story to tell.

[boumalo]

429$, will it go up or down?

To clarify, your models suggest that:
1) BTC will bottom out in the period you have suggested (shortly after the China deadline, as it happens)
2) The US stock market is due for a downturn later this year (pointing to an economic downturn a few months later?)
3) Therefore Bitcoin 'outperforming' in this context could mean no growth at all, while the stock markets dip

What are your models' track records?

Correct.  The broad market model gives me roughly an 12% edge on directional r2k futures positions over 1 month.  The BTC model is not mature enough to measure accurately.  The more parameters in your model, the more data you need to avoid overfit.  BTC doesn't have enough history to provide useful quality metrics on a scale more than a few hours, for models of this complexity.  I've tried to use some tricks to avoid overfit, but I can't yet quantify my success or failure in that regard, for the current model, with a usable p value.

Thanks. So another way of putting this might be:
"Not sure about bitcoin. By the way, recession in 12 months."

A recession is much overdue

[JorgeStolfi]

Hey Guys look what I found on pastebin, looks like someone leaked some marching orders from the puppet masters.

How embarrassing!

Troll Talking Points
 May 6th, 2014

Greetings gentlemen, first let me start off and say you have been doing very good work lately.
However we would like to remind you that you need to post in other forums besides Speculation,
as it is becoming quite apparent when you purchased your account from a real member since the account
stopped posting in other forums. Remember keep up your appearances, so as to not blow your cover.

Also some of you have been posting too much in "TOTAL TROLL" mode. Remember you need to dial it back
every now and then and post like an actual moderate bear would. This lends you creditability for your
"TOTAL TROLL" mode, when it is deemed necessary by the powers that be. And also keeps the actual bears
on your side, and they will even back you up sometimes... LOL.

Now onto today's talking points:

* OPERATION FUD - People were starting to react positively to the term FUD being thrown around, and it was
  starting to dilute our message. As you know the effort to re-term it to mean Fact U Dislike has worked moderately.
  Please keep mentioning it when someone points out our actual use of FUD.
  
* CHINA, CHINA, CHINA - The powers that be are coming to the end of the China ban milking. Now that China's actual
  influence on the markets has dwindled its time to switch tactics. Let's try "China is the only thing that makes
  Bitcoin worth more than $100". Find correlations between events in China to price rising and failing. Nevermind
  the growth outside of China, keep them focused on China. We want maximum panic when the exchanges finally mention
  they are leaving China.
  
* CHARTS - Now that you've all been through "negative slope" training, don't forget throw up a couple trendlines
  that point out how Bitcoin is going down to $0. Remember its not you making the numbers go down, its just what
  the trend it pointing out. Don't forget an emoticon for an effective reaction
  
That's it for today. Your Bitcoin payments are on their way. Don't forget to put your shorts in, as you know we
definetely will let YOU know when the squeeze begins.

Why, those three points are a short and lucid summary of the bitcoin community and market situation today.  (Although a bit pessimistic. It is only the linear extrapolation that gives 0$ by Sep/2014; the log extrapolation can't go to zero ever.  )

Thanks for posting, I will tell my patrons to send you a small comission too. 

[JayJuanGee]

BTC China, Huobi, Okcoin and two other exchanges are pulling out of the BTC Summit. 

http://www.coindesk.com/five-chinese-exchange-ceos-pull-out-conference/

"CEOs of five major Chinese bitcoin exchanges have withdrawn from this weekend’s Global Bitcoin Summit in Beijing, after banks forced most of them to close accounts related to bitcoin activity."

I saw that too.  It seems pretty last minute and pretty bearish.

Yea, the BTC Summit is going to be a bust.

The earlier advertisement of the BTC Summit that I saw a few weeks ago had listed several prominent members of the various exchanges as presenters.  The most recent listing of presenters showed only a couple of prominent presenters.  They won't need a very big room, and maybe they will NOT need any break out sessions.  The big name presenters may run out of things to say after half a day, and they will just have question / answer sessions.

[xulescu]

A recession is much overdue

The only thing I'm worried about is that the CB's freak out when stocks try to correct and put the printers on overdrive again. Nobody affords deflation right now. The tower of debt is too high compared to the tower of currency.

[JayJuanGee]

As far as i know we had bubbles of comparable magnitude before, with or without China.

The evolution of the BTC price since Oct/2013 can be explained in terms of Chinese events only, and does not seem to react to any events outside China.  Even the Feb/10 drop related to MtGOX was probably due to Mark's claim of a 'bug in the protocol' rather than the dealings of MtGOX itself.  

So it is hard to deny that the rise from ~100$ to ~1000$ and the current ~450$ are entirely due to the Chinese market.  If we consider percentual increase in price, indeed there were comparable bubbles before.  If we consider total demand for BTC, China was about 10x all the previous bubbles combined.

You are talking baloney, Jorge, by attempting to give so much weight to China.  Surely they have had an effect on price, but the effect is NOT as big as you seem to be making it out to be.   Even you were GOX obsessed for several weeks, and NOW you are China obsessed b/c you seem to be turning this subject and spin into a form of FUD spreading.

[adamstgBit]

small dip 426.8.

could this be the beginning of the end?