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

[JorgeStolfi]

The China bad news had been priced in. No more CNY into exchanges through bank deposit. Minor exchanges had closed. I can't think of any more China news worse than what we already knew, can you? If no more bad news, where will the price go?

We do not know how many coins the Chinese traders still have, in-exchange and off-exchange.  We do not know how much CNY can enter the exchanges. (The convenient channels have been blocked, but there are still some less convenient ones, and they may be enough for a few traders to move large amounts.)

Right now it seems that the Chinese traders too are uncertain about what the price will do.  Some traders probably dumped their coins and left the game, but many apparently are still there, waiting.  Volume is small compared to the good old days, but still large compared to the Western exchanges.  The latter still seem to track Huobi and OKCoin more than the other way around.

It seems likely that there will be further bad news, such as other exchanges closing, or the loss of some of those roundabout deposit channels.  However, in the short run those news may cause the price to go up rather than down, since they may create demand for BTC as a way to leave and/or continue speculating.  Eventually, however, more coins must move from the Chinese exchanges to the Western ones, so the price should go down.  The momentary dip on Apr/12, to 2230 CNY = 340 USD, shows how far down it could go.

PS. Note that the market does not react to "news", it reacts to facts (real or false) that it learns from the news...

[mooncake]

We do not know how many coins the Chinese traders still have, in-exchange and off-exchange.  We do not know how much CNY can enter the exchanges. (The convenient channels have been blocked, but there are still some less convenient ones, and they may be enough for a few traders to move large amounts.)

Right now it seems that the Chinese traders too are uncertain about what the price will do.  Some traders probably dumped their coins and left the game, but many apparently are still there, waiting.  Volume is small compared to the good old days, but still large compared to the Western exchanges.  The latter still seem to track Huobi and OKCoin more than the other way around.

It seems likely that there will be further bad news, such as other exchanges closing, or the loss of some of those roundabout deposit channels.  However, in the short run those news may cause the price to go up rather than down, since they may create demand for BTC as a way to leave and/or continue speculating.  Eventually, however, more coins must move from the Chinese exchanges to the Western ones, so the price should go down.  The momentary dip on Apr/12, to 2230 CNY = 340 USD, shows how far down it could go.

PS. Note that the market does not react to "news", it reacts to facts (real or false) that it learns from the news...

You are saying that the following may be potential bad news:
1. Other (Chinese) exchanges closing; and
2. Loss of roundabout deposit channels.

(1) can happen to small exchanges, as had happened to FXBTC. It is unlikely to happen to large exchanges, which are backed by large VC funding. If China bans exchanges or btc explicitly, then VC funding is irrelevant. But this is unlikely. Hence, (1) has little effect on price.
Most of the fund came from bank deposits. A smaller portion came from (2). (2) should have a larger impact on price than (1). Even so, it has been priced in to a large extent owning to the ban on bank deposit.

Please suggest worse potential news. Then we can analyse its impact on price. Thank you.

[rpietila]

Also the ones that forgo investing because it is "difficult" are the same group that tends to sell a majority of their collective coins anyway after the next major move (towards either direction  )

If you buy into Bitcoin despite the difficulties, you are much more probably still holding it 2 years from now, and a rich guy/gal.

The impact to USD/BTC (quoting Aminorex) is in BTC*d.  

[YogoH]

rpietila,

What percent of your net worth is in Crypto, PM, Real Estate, etc?

What percent do you recommend the average person to put into Crypto and PM?


Thanks for time and opinion.

[edwardspitz]

Is it not obvious that without FRESH FIAT (I think I am going to change my user name to this) that these markets cannot go up? And there is no way for fresh fiat to reach the Chinese exchanges.

And if the markets don't go up (and we all should be fully prepared for the market to meander right on past the cross point of this multi-month wedge that everyone's talking about) then the markets are all SITTING DUCKS to bad news coming out of China - like an exchange(s) closing, etc.

Buying here is ridiculous. Shorting isn't a great idea either - although you can often borrow it for almost free, just in case.

I agree with you. But the price could go up if the Chinese realize that they can't get their fiat out of the exchanges (I don't know if this is the case or how likely this is). But in that scenario prices should go up as they buy b/c. I think we will still follow China (even though they should be irrelevant imo).

I think the point is, how are they going to buy BTC (or keep buying it anyway) if they can't get money into the exchanges?

Yes that is true, but they may already have fiat on the exchanges. The traders who wanted to get out must have cashed completely out by now (I know I would have). If the remaining traders realize that buying b/c and transferring it off the exchange is the only way they can avoid losing everything, then they will buy bitcoin with their remaining fiat (on the exchange). This buying will push the price up. This is bitcoin, and something crazy like this could happen although I don't find it likely. I hope that Chinese exchanges will shut down before this happens.

[ChartBuddy]

Explanation

[rpietila]

rpietila,

What percent of your net worth is in Crypto, PM, Real Estate, etc?

What percent do you recommend the average person to put into Crypto and PM?

Thanks for time and opinion.

More than half is in crypto. Otherwise it's quite balanced (I view all other investments as a hedge against BTC's failure - they are not expected to generate returns).

The percent depends so much on your individual way of viewing things. For the poker players, going all-in or even leveraged all-in has generated good results with acceptable risk (losing all and then some, but hey - you are young!). I prefer to play all scenarios, so that I never lose. (Of course some pay out better than the others). Many people cannot sleep if they have even 10% of their worth in BTC, so that must also be taken into account.

**

A practical way to see how much crypto you can bear, and organize it, is to buy 5% (or really - whatever %) of your net worth this week. After 1 week if it feels good, buy another 5%. If it does not feel good, don't buy more. The system has a 3-month rule, as follows:

- After 3 months has passed from your latest purchase, you may never ever in your life anymore, buy bitcoins.
- Until 3 months has passed from you latest purchase, you may never ever in your life, no matter what, sell bitcoins.

This way you have a clear high point in your bitcoin holdings, the 3-month period, because before that you can only buy and after that you can only sell. Try to buy as many coins that they are enough for you for the rest of your life. Then when you sell, you cannot replace the coins - when you sell, they are gone permanently and irreversibly.

One way to sell the coins without emotion is the SSS plan.

I am sure the readers see the various psychological levers the plan outlined here pulls, to give the best results.

[windjc]

Is it not obvious that without FRESH FIAT (I think I am going to change my user name to this) that these markets cannot go up? And there is no way for fresh fiat to reach the Chinese exchanges.

And if the markets don't go up (and we all should be fully prepared for the market to meander right on past the cross point of this multi-month wedge that everyone's talking about) then the markets are all SITTING DUCKS to bad news coming out of China - like an exchange(s) closing, etc.

Buying here is ridiculous. Shorting isn't a great idea either - although you can often borrow it for almost free, just in case.

NEWSFLASH

CHina = Irrelevant

That's bullshit. You can't say the exchange ALL the other exchanges are following is irrelevant. That is illogical.

Unless Bitstamp can lead us somewhere, and it CANT without fresh fiat, then good luck with the whole "breaking up" theory.

Meanwhile, holding long is risky.

[Raystonn]

Is it not obvious that without FRESH FIAT (I think I am going to change my user name to this) that these markets cannot go up?

Fresh fiat is one way for the market to go up.  But it's not the only way.  Every time someone sells, they may buy back at a higher price.  The guy he sold to may also be buying back at a higher price.  The "don't want to miss the train" can cause a great deal of this.  To get ever higher highs without new fiat, the market must sell more rationally than it buys.  The process of unwinding positions must move the price less than the process of opening long positions.

[windjc]

Is it not obvious that without FRESH FIAT (I think I am going to change my user name to this) that these markets cannot go up?

Fresh fiat is one way for the market to go up.  But it's not the only way.  Every time someone sells, they may buy back at a higher price.  The guy he sold to may also be buying back at a higher price.  The "don't want to miss the train" can cause a great deal of this.  To get ever higher highs without new fiat, the market must sell more rationally than it buys.  The process of unwinding positions must move the price less than the process of opening long positions.

Yeah we keep seeing this play out and we keep seeing the market dump lower because that can only go so far.

Meanwhile almost 4k coins get mined everyday and most bulls here believe NONE of them get sold on exchanges.

[dreamspark]

windjc, while realising that fresh fiat is important its also necessary to remember the other ways the market can move. eta say theres $10mm on the sidelines at Stamp. Say there's 10k BTC to $1000 if the sellers all leave their sells then $10mm is needed to get there. Say the sentiment changes and or good news. All of a sudden there's only 4k BTC to $1000 this only takes $4mm, 60% less. Im not arguing that fresh fiat isn't important or that it wouldn't help the cause but I think its important to consider other dynamics in the price rising.

[T.Stuart]

Is it not obvious that without FRESH FIAT (I think I am going to change my user name to this) that these markets cannot go up? And there is no way for fresh fiat to reach the Chinese exchanges.

And if the markets don't go up (and we all should be fully prepared for the market to meander right on past the cross point of this multi-month wedge that everyone's talking about) then the markets are all SITTING DUCKS to bad news coming out of China - like an exchange(s) closing, etc.

Buying here is ridiculous. Shorting isn't a great idea either - although you can often borrow it for almost free, just in case.

I agree with you. But the price could go up if the Chinese realize that they can't get their fiat out of the exchanges (I don't know if this is the case or how likely this is). But in that scenario prices should go up as they buy b/c. I think we will still follow China (even though they should be irrelevant imo).

I think the point is, how are they going to buy BTC (or keep buying it anyway) if they can't get money into the exchanges?

Yes that is true, but they may already have fiat on the exchanges. The traders who wanted to get out must have cashed completely out by now (I know I would have). If the remaining traders realize that buying b/c and transferring it off the exchange is the only way they can avoid losing everything, then they will buy bitcoin with their remaining fiat (on the exchange). This buying will push the price up. This is bitcoin, and something crazy like this could happen although I don't find it likely. I hope that Chinese exchanges will shut down before this happens.

But for Bitcoin to go back through the roof quite a lot of money is needed. Only the management of Huobi and the other Chinese exchanges know how much money is in at the moment but I bet it's relatively low. And with the incoming channels being stifled...

In a way this situation is starting to remind me of Gox. Although the spread widened as things got worse the price of BTC on other exchanges remained affected by Gox until the bitter end. As fiat shortage issues plague the Chinese exchanges the same dynamic will play out as long as said exchanges are on display alongside "western" exchanges.

A few months ago I wrote to Bitcoinwisdom asking them to remove Gox from their charts. We were quite clearly watching Bitcoin prices no longer - the price of Gox shares was on display. But everything was presented as per the other exchanges. I know many people dismissed the idea of removing Gox data from Bitcoinwisdom, but I think it is important to understand exactly what is being displayed, which was not made clear.

I am not necessarily saying that there should be suppression of data coming from Chinese exchanges (fight censorship with censorship eh  ) but I think some kind of development is needed vis-a-vis price reporting services, to include for example analysis of regulatory issues in different territories, and to segregate data accordingly.

[windjc]

windjc, while realising that fresh fiat is important its also necessary to remember the other ways the market can move. eta say theres $10mm on the sidelines at Stamp. Say there's 10k BTC to $1000 if the sellers all leave their sells then $10mm is needed to get there. Say the sentiment changes and or good news. All of a sudden there's only 4k BTC to $1000 this only takes $4mm, 60% less. Im not arguing that fresh fiat isn't important or that it wouldn't help the cause but I think its important to consider other dynamics in the price rising.

Sentiment is not going to change without fresh fiat. It's not. Hell, how much more bullish can sentiment get anyway? We are in a 5 month bear market and most people here are incredibly optimistic. However, these same people have very little new money to invest.

If no one chooses to sell we can't go down. But the longer we flatline the greater the chance that "big bad news" from China will rear its head.

And for those of you that say it can't get worse, it CAN.

I.e. ---> Houbi closes, Houbi is insolvent, China bans bitcoin literally including exchanges, etc etc

[T.Stuart]

windjc, while realising that fresh fiat is important its also necessary to remember the other ways the market can move. eta say theres $10mm on the sidelines at Stamp. Say there's 10k BTC to $1000 if the sellers all leave their sells then $10mm is needed to get there. Say the sentiment changes and or good news. All of a sudden there's only 4k BTC to $1000 this only takes $4mm, 60% less. Im not arguing that fresh fiat isn't important or that it wouldn't help the cause but I think its important to consider other dynamics in the price rising.

Sentiment is not going to change without fresh fiat. It's not. Hell, how much more bullish can sentiment get anyway? We are in a 5 month bear market and most people here are incredibly optimistic. However, these same people have very little new money to invest.

If no one chooses to sell we can't go down. But the longer we flatline the greater the chance that "big bad news" from China will rear its head.

And for those of you that say it can't get worse, it CAN.

I.e. ---> Houbi closes, Houbi is insolvent, China bans bitcoin literally including exchanges, etc etc

All that would be incredibly bullish in my opinion (after a short sharp slap of course!)

[windjc]

windjc, while realising that fresh fiat is important its also necessary to remember the other ways the market can move. eta say theres $10mm on the sidelines at Stamp. Say there's 10k BTC to $1000 if the sellers all leave their sells then $10mm is needed to get there. Say the sentiment changes and or good news. All of a sudden there's only 4k BTC to $1000 this only takes $4mm, 60% less. Im not arguing that fresh fiat isn't important or that it wouldn't help the cause but I think its important to consider other dynamics in the price rising.

Sentiment is not going to change without fresh fiat. It's not. Hell, how much more bullish can sentiment get anyway? We are in a 5 month bear market and most people here are incredibly optimistic. However, these same people have very little new money to invest.

If no one chooses to sell we can't go down. But the longer we flatline the greater the chance that "big bad news" from China will rear its head.

And for those of you that say it can't get worse, it CAN.

I.e. ---> Houbi closes, Houbi is insolvent, China bans bitcoin literally including exchanges, etc etc

All that would be incredibly bullish in my opinion (after a short sharp slap of course!)

I know why you say that, but China exchanges being open and solvent adds to the overall demand. So really it's not bullish.

[atoni]

Windjc is right, it takes a lot of money to raise btc price at this mkcap. And without A LOT of fresh fiat it is not very possible scenario. We better hope BTC adoption suddenly accelerates and creates a new hype. Its good that money is flowing into infrastructure and eco-system because without that btc has no sense except for speculation, and at least it is getting some positive news coverage.

[mooncake]

I.e. ---> Houbi closes, Houbi is insolvent, China bans bitcoin literally including exchanges, etc etc

This is unlikely. However, for the sake of argument, let's assume it happens. Exchanges will then move their operations offshore. Traders cannot get money in (which is already the current case) and traders cannot get money out (which only means buying btc). So I do not think this is a worse news. Please offer counter argument.

[ChartBuddy]

Explanation

[T.Stuart]

windjc, while realising that fresh fiat is important its also necessary to remember the other ways the market can move. eta say theres $10mm on the sidelines at Stamp. Say there's 10k BTC to $1000 if the sellers all leave their sells then $10mm is needed to get there. Say the sentiment changes and or good news. All of a sudden there's only 4k BTC to $1000 this only takes $4mm, 60% less. Im not arguing that fresh fiat isn't important or that it wouldn't help the cause but I think its important to consider other dynamics in the price rising.

Sentiment is not going to change without fresh fiat. It's not. Hell, how much more bullish can sentiment get anyway? We are in a 5 month bear market and most people here are incredibly optimistic. However, these same people have very little new money to invest.

If no one chooses to sell we can't go down. But the longer we flatline the greater the chance that "big bad news" from China will rear its head.

And for those of you that say it can't get worse, it CAN.

I.e. ---> Houbi closes, Houbi is insolvent, China bans bitcoin literally including exchanges, etc etc

All that would be incredibly bullish in my opinion (after a short sharp slap of course!)

I know why you say that, but China exchanges being open and solvent adds to the overall demand. So really it's not bullish.

With the investment being made in a plethora of services in the US alone, and the current stance of the gov there, I think the demand would quickly be replaced.

In my eyes the biggest problem facing BTC price appreciation now and for the foreseeable future is simply continuing the status quo, without any extra bad news from China necessary at the moment.

In a "perfect" Bitcoin-world (Moon and space programs  ) Huobi and the rest would establish themselves outside of China as soon as possible. Or China bans Bitcoin.

[T.Stuart]

Windjc is right, it takes a lot of money to raise btc price at this mkcap. And without A LOT of fresh fiat it is not very possible scenario. We better hope BTC adoption suddenly accelerates and creates a new hype. Its good that money is flowing into infrastructure and eco-system because without that btc has no sense except for speculation, and at least it is getting some positive news coverage.

I am a long-term bull but what you hope for is not enough. Adoption can take off all over the world but if it does not take off in China (and clearly this is what the Chinese government wants) then Houston, we have a problem! (Please see above posts for why I think this is the case)