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

[molecular]

Molecular hasn't started buying yet, yet he is a donator. Weird.

mining?

used to be all fun and games. Didn't think it would turn out so well financially back then.

To be fair: I have bought also, but it was in 2011, not during the current bear market. So I think saying "I haven't started buying yet" is applicable given the context.

[justusranvier]

Like the dudes on wall street?

Especially them.

[JorgeStolfi]

[ ... ] comical hunt for "causes" of local price increases, but this one is too good to pass on:

Current price is the result of "three bubbles", starting Jan 2013?

So the entire trading history of late 2010 to late 2012, when price discovery was truly bootstrapped, with maybe the first major milestone being dollar parity, is just a historical footnote? No effect on price today?

Prices do not move on their own, by looking at their past history, without any external causes.  Apple stock goes up or down because of their current products and marketing, not because of what its price did 5 or 20 years ago.

I wonder how the poor BTC price managed to survive 2009 without going insane.  Imagine having to decide whether to go up or down, every single day, without even one year of past history to tell it what to do.

Seriously, the previous history of bitcoin (and not just of its price) certainly influenced those 3 events, especially since they appear to have been mostly the opening of short-term speculative markets (as opposed to communities of computer nerds, as in 2009, or people using bitcoin for payments, as may have been the case of some previous bubbles).  Presumably, many of the people who bought coins in those three events did so because they saw those multi-year trend extrapolations and believed them.  But even they surely were more impressed by the price increase in the previous year than by what happened in the previous years.

The events before 2013 also prepared the ground by soaking up the most part of the 14 million coins, leaving a relatively small amount for short-term speculators to play with; so that the entry in 2013 of N new traders in the game would have a much larger effect on prices than it would have had otherwise.  And, granted, many of the long-term investors who are holding the bulk of those older coins may do so because they believe in that multi-year TA, too.

However, the price got from 140$ to 800$ not because of some mysterious "multi-year trend force" pulled it up, but because the Chinese speculators discovered bitcoin and bough it en masse; and it fell from 800$ to the present 350$ not because of some even more mysterious "correction force", but because the Chinese government policies have been driving most of those speculators away.  It can't get more obvious than that.

Three discrete events causally determine today's price. Got it.

Great. You will see that it will all begin to make sense from now on.   

Too bad that it makes the price nearly impossible to predict.  Lines on charts cannot tell whether Bitcoin will be the next TelexFree in Brazil, or whether the US government will change its mind and decide to ban it...

[molecular]

Like the dudes on wall street?

Especially them.

There's a difference, though: average gamblers don't get bailouts.

[spooderman]

Molecular hasn't started buying yet, yet he is a donator. Weird.

mining?

used to be all fun and games. Didn't think it would turn out so well financially back then.

To be fair: I have bought also, but it was in 2011, not during the current bear market. So I think saying "I haven't started buying yet" is applicable given the context.

yeah I know, I was just being a dick

I've been buying during this bear market, then I sodl for lower than I bought, then I bought back for even lower than I sodl, ending up where I started. This is about as good as you can hope for daytarding.

I'll be buying more if we hit the 200s again for sure.

[octaft]

I've been buying during this bear market, then I sodl for lower than I bought, then I bought back for even lower than I sodl, ending up where I started. This is about as good as you can hope for daytarding.

Just because you suck at something doesn't mean everyone else does. 

Note that I suck at daytrading (which is why I don't do it), so don't think I'm hating.

[grappa_barricata]

[Tzupy]

...
However, the price got from 140$ to 800$ not because of some mysterious "multi-year trend force" pulled it up, but because the Chinese speculators discovered bitcoin and bough it en masse; and it fell from 800$ to the present 350$ not because of some even more mysterious "correction force", but because the Chinese government policies have been driving most of those speculators away.  It can't get more obvious than that.
...

The price was already in an obvious uptrend when the Chinese speculators stepped in and pumped it, so instead of a peak of around 600$ in spring 2014,
the peak was around 1200$ in December 2013 (market moved a lot faster up with the Chinese). Events can heavily influence the market, but price affects price.

[spooderman]

I've been buying during this bear market, then I sodl for lower than I bought, then I bought back for even lower than I sodl, ending up where I started. This is about as good as you can hope for daytarding.

Just because you suck at something doesn't mean everyone else does. 

Note that I suck at daytrading (which is why I don't do it), so don't think I'm hating.

I don't think I suck, I think I was neither lucky nor unlucky. I came out where I started.

Point being, I consider it a gamble rather than a skill. (Yes there's skill involved, but short of having the ability to travel through time in a way that other people cannot, luck is the main factor in trading success for sure.)

A very disciplined, skillful trader might make a profit for sure, but a big move and some bad luck and it's over.

[justusranvier]

I've been buying during this bear market, then I sodl for lower than I bought, then I bought back for even lower than I sodl, ending up where I started. This is about as good as you can hope for daytarding.

Just because you suck at something doesn't mean everyone else does.  ;0

The only thing that anyone sucks at here is basic math and statistics.

http://www.alphaarchitect.com/blog/2011/06/30/mission-impossible-beating-the-market-over-long-periods-of-time/

http://www.moneyshow.com/articles.asp?aid=No-Nonsense-32901

The number of expert stock traders who can consistently beat the market is statistically indistinguishable from zero. This result is only surprising because with the amount of blatant fraud on Wall Street you'd expect the cheaters to be able to muster more than 0.6%.

Stock trading is just gambling. Apparent skill at trading is an artifact of human brains seeing patterns in randomness that don't exist.

[grappa_barricata]

But the data is not really random, and some of the patterns do indeed repeat with some predictability. Some people trade 'at random', without any clue whatsoever. So what, this doesn't mean anything. If everybody is losing, who's winning?

[octaft]

I've been buying during this bear market, then I sodl for lower than I bought, then I bought back for even lower than I sodl, ending up where I started. This is about as good as you can hope for daytarding.

Just because you suck at something doesn't mean everyone else does. 

Note that I suck at daytrading (which is why I don't do it), so don't think I'm hating.

I don't think I suck, I think I was neither lucky nor unlucky. I came out where I started.

Point being, I consider it a gamble rather than a skill. (Yes there's skill involved, but short of having the ability to travel through time in a way that other people cannot, luck is the main factor in trading success for sure.)

A very disciplined, skillful trader might make a profit for sure, but a big move and some bad luck and it's over.

Ha I'm just busting your balls, man. As I said, I can't do that shit, either.

[JorgeStolfi]

Please stop referring to the May 2014 price rise as a "bubble". It is part of the deflation pattern of the November 2013 (mania phase of the) bubble. [ ... ] (that I called bull trap)

Sorry for abusing the term.  I used "bubble" in the very broad sense of "fast price increase that starts and stops rather abruptly". 

Is "bull trap" appropriate, though?  The price was relatively flat at the top for about two months.  "Trap" suggests a move that quickly reverses, causing the traders who bought or sold late in the move to lose money.

IMO there are 2 reasons for the May 2014 uptrend : the PBoC stopped feeding bad news to the market, so the market lost some downward momentum and the linear descending channel broke, which was inevitable at some point, otherwise price would have reached 0$ by now.

The stabilization of the price at ~450$ from Apr/25 to May/19 must indeed have been due to absence of further bad news from the Chinese government, and to the "five exchanges" public pledge to make the game more friendly to small players.  But I don't see why the sudden rise after May 20 could have been due to that.

The May/2014 "bubble" was also very different from the typical bubble -- not an exponential that started off gradually and accelerated, but instead a steep linear rise, starting with no advance warning at all.  Looking closely, it was actually a series of concentrated buying episodes, each lasting only a couple of hours, separated by days of aimless (or downward) wandering.   

I explained earlier my theory about that "bubble", although I still cannot tell who those mystery buyers were.  I think (but with not much confidence) that those late-May buyers are still mostly holding; so that the -300$ drop after Aug/2014 is not due to to them, but is only a continuation of the drop from Feb to Apr, namely the Chinese speculators continuing to pull out.  (By the way, Bobby Lee of BTC-China claimed that the Huobi and OKCoin broke their pledge, some time after May.)

[molecular]

If everybody is losing, who's winning?

The exchange?

[spooderman]

I've been buying during this bear market, then I sodl for lower than I bought, then I bought back for even lower than I sodl, ending up where I started. This is about as good as you can hope for daytarding.

Just because you suck at something doesn't mean everyone else does.  

Note that I suck at daytrading (which is why I don't do it), so don't think I'm hating.

I don't think I suck, I think I was neither lucky nor unlucky. I came out where I started.

Point being, I consider it a gamble rather than a skill. (Yes there's skill involved, but short of having the ability to travel through time in a way that other people cannot, luck is the main factor in trading success for sure.)

A very disciplined, skillful trader might make a profit for sure, but a big move and some bad luck and it's over.

Ha I'm just busting your balls, man. As I said, I can't do that shit, either.

As I said, (and Justus) I don't think anyone can!

Leave my balls alone plz, they are for spoodergril only.

If everybody is losing, who's winning?

The exchange?

word

[ChartBuddy]

Explanation

[justusranvier]

If everybody is losing, who's winning?

The people who earn a cut on every trade, and the people who get out of the ponzi scheme first.

Here's what happened:

In 1978 the US passed a law that introduced the 401k.

The effect of this law was to funnel a huge amount of money into the markets in an attempt to escape taxation. This happened right as the Baby Boomers were approaching their peak earning years.

All this money being forcefully shoved into the market solely because of tax policy, instead of because there was something actually worth buying, bid up the prices of everything into the stratosphere, and all the people on Wall Street thought they were geniuses just for being there when the money spigot opened.

Most slot machines have a average payout of < 100%. Imagine if you were playing on a slot machine with a 120% average payout. Play on that machine long enough and you'll eventually delude yourself into imagining you're some kind of god of probability.

This was all well and good until the demographics shifted and all of a sudden there were more people wanting to pull money out of the market than were adding new money into it.

Naturally, the market crashed.

Now a bunch of rich, deluded, (mostly) sociopaths screamed, and cried, and stomped their feet, and threatened Congress with tanks in the street, unless they got bailouts.

Now the Federal Reserve prints new money into existence for the primary dealers to pour into the market to make up for the missing Baby Boomer earnings.

Thus, we all lose because of inflation (except for the sociopaths).

[samsonn25]

I've been buying during this bear market, then I sodl for lower than I bought, then I bought back for even lower than I sodl, ending up where I started. This is about as good as you can hope for daytarding.

Just because you suck at something doesn't mean everyone else does.  

Note that I suck at daytrading (which is why I don't do it), so don't think I'm hating.

I don't think I suck, I think I was neither lucky nor unlucky. I came out where I started.

Point being, I consider it a gamble rather than a skill. (Yes there's skill involved, but short of having the ability to travel through time in a way that other people cannot, luck is the main factor in trading success for sure.)

A very disciplined, skillful trader might make a profit for sure, but a big move and some bad luck and it's over.

Ha I'm just busting your balls, man. As I said, I can't do that shit, either.

As I said, (and Justus) I don't think anyone can!

Leave my balls alone plz, they are for spoodergril only.

If everybody is losing, who's winning?

The exchange?

word

Middlemen Bookies

[empowering]

I've been buying during this bear market, then I sodl for lower than I bought, then I bought back for even lower than I sodl, ending up where I started. This is about as good as you can hope for daytarding.

Just because you suck at something doesn't mean everyone else does.  

Note that I suck at daytrading (which is why I don't do it), so don't think I'm hating.

I don't think I suck, I think I was neither lucky nor unlucky. I came out where I started.

Point being, I consider it a gamble rather than a skill. (Yes there's skill involved, but short of having the ability to travel through time in a way that other people cannot, luck is the main factor in trading success for sure.)

A very disciplined, skillful trader might make a profit for sure, but a big move and some bad luck and it's over.

Ha I'm just busting your balls, man. As I said, I can't do that shit, either.

As I said, (and Justus) I don't think anyone can!

Leave my balls alone plz, they are for spoodergril only.

If everybody is losing, who's winning?

The exchange?

word

EMH says (if that is your thing)

Passive investment with wide diversification within asset classes in your portfolio beats active portfolio management in the long run.

(though more rational traders can sometimes profit from less rational traders imo)
 

[Tzupy]

@JorgeStolfi:
These market movements represent each 2 EW upward sub-sub-waves of wave C. The second one took about 4 times longer, for various reasons.