Sentiment in 2011

[anu]

Bitcoins are hotter than ever. I don't think what happened in 2011 can really apply to what's going on now.

This time it's different.  

Maybe, maybe not. But every fool who bought at $10 in July or August 2011 because he thought it was a bargain has been proven right. 1300% gain is pretty good compared to everything else. If this time is the same, everyone who buys at $130 will look pretty good in 2 years. If this time is not the same, he will look good in a few months.

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[Gabi]

I just have a question for those that think this will play out like in 2011, with an eventual decline to pre-bubble levels.
Do you think this will still happen if some of the things being worked on right now come through? I'm mostly referring to the projects that will make bitcoins much easier to buy.

These include the ATMs, Coinlab, Coinsetter, and several other exchanges.

Coinlab and the first ATM are coming out next week, and there's plenty of other projects being worked on. Some of these fundamental improvements seem too important to support a decline back to $30. They would also bring back media coverage and increase the user base.

Bearish scenario to $30 (let's entertain this):

1. Price crashes to $30

2. Media starts saying "SEE WE TOLD YOU IT WAS A BUBBLE"

3. Most start buying like crazy (buy ASK side is super thin) because they realize shit I get a second chance to ride the BTC train! CHOO CHOO!

4. Back to $150 in 48 hours lol

5. Profits

** This is what all the so called "bears" are masterbating about on this forum.  

+1 this

Back in 2011 the sentiment was a bit "well maybe bitcoin is really a fad and now price will just drop to 0 and no one will use it, after all you can't use it for a lot of things..." wich is why it slowly dropped from 30 to 15 to 10 to 5 to 2.
But today??? After bitcoin went from 2 to 266 instead of dying? With Bitpay reporting millions of $ of transactions each month? Now people are looking to buy cheap bitcoins!

[sangaman]

We're not going to make it beyond $3.  Go ahead, watch.

These are really excellent. Great OP, I'd love to see a storyline with quotes and linked threads along the way following the history of bitcoin sentiment since early 2011.

[phelix]

it sure looks different this time...

i'm not quite sure it was 'just a bubble' anyway -- there might have a been a 'bubble top' but the market was aching for a regular old correction. and it feels like deflation is kicking in now -- BTC price can't go down without some serious selling if demand is growing. i even doubt we'll see below $100 anytime soon -- too many people think thats a cheap coin

--arepo

I keep thinking the same thing, but then I remember that people constantly said your last sentence almost exactly, but about $10 instead of $100 back in 2011. So, I don't know what to think.

Best statement on this board ever.

[RationalSpeculator]

Bitcoins are hotter than ever. I don't think what happened in 2011 can really apply to what's going on now.

This time it's different.  

Maybe, maybe not. But every fool who bought at $10 in July or August 2011 because he thought it was a bargain has been proven right. 1300% gain is pretty good compared to everything else. If this time is the same, everyone who buys at $130 will look pretty good in 2 years. If this time is not the same, he will look good in a few months.

Very good point!

[smoothie]

Bitcoins are hotter than ever. I don't think what happened in 2011 can really apply to what's going on now.

This time it's different.  

Maybe, maybe not. But every fool who bought at $10 in July or August 2011 because he thought it was a bargain has been proven right. 1300% gain is pretty good compared to everything else. If this time is the same, everyone who buys at $130 will look pretty good in 2 years. If this time is not the same, he will look good in a few months.

Very good point!

Just give it 1 year...let alone 2 years.

Next april I wouldn't be surprised if we are in or above the $500-$800 range.

[wobber]

I think this summer will be mindblowing...

All the mainstream media news, Cyprus bank issues (remember Cyprus is just a little island)

[N12]

You wouldn't listen.

How are things now, arepo?

[arepo]

You wouldn't listen.

How are things now, arepo?

this isn't the beginning of any long, slow, slide, i'll tell you that. we are very close to a market bottom, we just had to let off some steam.

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-===-

RSI as low as our second visit to $50, yet the price is more than double. can you say bullish divergence?

[N12]

A usual bullish divergence would be a lower low on price and a higher low in the RSI reading.

Very well, we'll talk again in a few weeks.

[Maged]

the June '11 event cannot be compared to this. you can be a bear, but not for this reason.

how can this model account for the recent run-up to $165? nothing like that occurred after the $33 peak, and the proportions are entirely wrong: the run-up was much shorter, and the crash was much longer.

The run-up to $165 can be explained by the recent sentiment we've had of "It's different this time!". That caused a feedback-loop of more and more people thinking that things are different now, running up the price. Once the market comes to the realization that things really aren't different this time, that's when things will stop being different.

[arepo]

the June '11 event cannot be compared to this. you can be a bear, but not for this reason.

how can this model account for the recent run-up to $165? nothing like that occurred after the $33 peak, and the proportions are entirely wrong: the run-up was much shorter, and the crash was much longer.

The run-up to $165 can be explained by the recent sentiment we've had of "It's different this time!". That caused a feedback-loop of more and more people thinking that things are different now, running up the price. Once the market comes to the realization that things really aren't different this time, that's when things will stop being different.

this quote was a little ambiguous. i meant the run-up from the last ATH to $266. the first bit about $165 was pretext.

the run-up was completely different (1000% over months?), and the crash was completely different (80% in days?). this is a completely different price pattern. almost like a reverse-June-bubble, who's run-up was as short as our crash, and whose crash was as long as our run-up.

[N12]

2/32*266=16.625

For perspective. 80% is very large indeed in the short term. That's why I bought the rebound, as it was near certain to retrace a lot. But over the long term?

Many people are still sitting on huge unrealized profits. A too bullish sentiment is well displayed by upvote ratio and abundance of posts like this one. "Just hold, it will go up again".

Make no mistake, the Great Dollar Extraction is here, and it has come to consume us.

[arepo]

2/32*266=16.625

For perspective. 80% is very large indeed in the short term. That's why I bought the rebound, as it was near certain to retrace a lot. But over the long term?

Many people are still sitting on huge unrealized profits. A too bullish sentiment is well displayed by upvote ratio and abundance of posts like this one. "Just hold, it will go up again".

Make no mistake, the Great Dollar Extraction is here, and it has come to consume us.

there will be a bear market, but it will (necessarily) end before most people think it will

[N12]

Of course. Sentiment will have to be very bearish after a long period of the downtrend, and ideally, shorting will get popular somewhere and bring us a nice short squeeze to form a real capitulation bottom.

[SlipperySlope]

I recently decided to go through some of the posts from the 2011 bubble, so here is some of what I found. Feel free to read the threads to get a better understanding of what people were thinking.

June 11, 2011
"Heads up! Market Bottom? You can buy now for under $22/BTC..."
"...this is a high reward / somewhat low risk time to buy"
https://bitcointalk.org/index.php?topic=14914.0
I needn't tell you what happened next, but this was where we dropped below $13 and stabilized around $20, dropping to around $17 by the time MtGox got hacked.

July 18, 2011
"There are no rallies. There are no crashes.  There is just a slow, steady slide."
"I dont think its gonna go down to 7"
https://bitcointalk.org/index.php?topic=29900.0
It stayed stable at $14, but...

August 03, 2011
"I think we could nick $6 short-term, but looking at $8 in the mid-term"
"I can't help but feel we haven't seen the bottom yet"
https://bitcointalk.org/index.php?topic=34053.0
Both statements were right-on.

August 15, 2011
"...a reversed Head & Shoulders bottom formation has developed"
"...a target price of around 13,5 USD/BTC can be expected"
https://bitcointalk.org/index.php?topic=37296.0
After bouncing between $11 and $12 dollars the next few days, we dropped to around $8.

September 07, 2011
"We have seen the bottom. $6.12 will be the starting point for a long road upward."
"We will never see $6.12 again."
https://bitcointalk.org/index.php?topic=42094.0
A few days latter, the price dropped to just over $4 and stabilized between $5-$6 for about a month before dropping further.

September 09, 2011
"It is following the trend perfectly, now is the time to get in"
"If it drops below $4 today ... will you shut up?"
https://bitcointalk.org/index.php?topic=42495.0
"Bitcoin is over. If you're not out, get out."
https://bitcointalk.org/index.php?topic=42514.0
Stabilized between $5-$6 for about a month before dropping further.

October 22, 2011
"buy, buy, buy!!11111"
"The $3 wall: the gift that keeps on giving."
"We're not going to make it beyond $3.  Go ahead, watch."
https://bitcointalk.org/index.php?topic=49389.0
We broke above $3 and later dropped back to $2. But, if you bought at this time, you were golden.

Anyway, I hope you guys enjoyed this. I encourage more of you to go back and check the old threads out!

@Maged

This recollection is so awesome!

[Maged]

the June '11 event cannot be compared to this. you can be a bear, but not for this reason.

how can this model account for the recent run-up to $165? nothing like that occurred after the $33 peak, and the proportions are entirely wrong: the run-up was much shorter, and the crash was much longer.

The run-up to $165 can be explained by the recent sentiment we've had of "It's different this time!". That caused a feedback-loop of more and more people thinking that things are different now, running up the price. Once the market comes to the realization that things really aren't different this time, that's when things will stop being different.

this quote was a little ambiguous. i meant the run-up from the last ATH to $266. the first bit about $165 was pretext.

the run-up was completely different (1000% over months?), and the crash was completely different (80% in days?). this is a completely different price pattern. almost like a reverse-June-bubble, who's run-up was as short as our crash, and whose crash was as long as our run-up.

I think I get where our misunderstanding is here. Where are you saying each bubble started, ended, and collapsed? The way I see it, the 2011 bubble started at $1 (mid-April 2011) and lasted about 2 months with a 3000% increase, crashing 70% over a few days, and 95% over several months. This bubble started in January at around $13.50, and saw a 2000% increase over four and a half months, crashing 80% over a few days. Tell me, how is that different?

[N12]

I would sell my kidney to buy $16 bitcoins (if I could do such a thing). I think we might approach $50 again, or even break it. But it won't last very long at all. New ATH in 2014. Unless of course, bad shit happens to the fundamentals. I'm assuming infrastructure/services growth of past several years continues, as well as increased understanding/appreciation from general public around the world.

I'm not one so bold to assume that the fundamentals will remain unchallenged within a new bear market. I don't know if Bitcoin really will emerge as #1 Digital Cash out of this, because it appears that xyz crapcoins are actually gaining in significance, and at least two of them will be trading on MtGox. Then, there is the tx/block scaling issue and there's the "cp in blockchain" thing.

Basically, I have no idea if Bitcoin is MySpace or not. I'll let the market point that out as the Great Dollar Extraction proceeds.

[N12]

Isn't it pretty much decided that the blocksize limit will be increased?

AFAIK, there is no consensus whatsoever amongst developers whether it should be done at all. We will likely hit the ceiling before anything is done.

In terms of fundamentals, people are still zealously innovating/building services. I get the feeling there is a generally optimistic mid-term/long-term outlook in terms of bitcoin development/utility.

Judging from your account date, I'll just assume you weren't here in 2011. Back then, following the MtGox hack and some other exchanges failing, there have been good news all along with cool stuff being built. People just didn't care about them, in the same way they didn't care about bad news during the parabolic rise. This market likes to alternate between positive and negative feedback loops. It's not based on "fundamentals" but almost exclusively psychology.

[Rampion]

Oh, and of course that there are no popular actually used (ie, by lots of people with lots of volume) economic applications I know of besides SatoshiDice and Silk Road. There is still no Bitcoin economy.

this is not true... bitcoin is finding its niches in many small places, just planting seeds -- no flowers yet, but soon

i can also tell you from first hand experience that seals with clubs (bitcoin poker) saw a massive influx of new users over the course of the last 6 months.

i think you're underestimating the amount of media coverage we received... bitcoin was all over reddit, tumblr, etc, in a big way. these kinds of things have a gradual effect.

in other words, i think the bitcoin userbase is expanding at an unprecendented rate, even still, though said figure may have taken a hit after the crash.

The question is, how different is this from 2011, percentage wise? If it's about the same, then our target price is around $30 ($15 (pre-current-bubble) * ($2 (post-2011-bubble)/$1 (pre-2011-bubble)).

That's about right. But I would say it's 100% different (more people understanding BTC, better news post-burst), so our target price is around $60. And long term, BTC looks stronger than ever - but still needs real businesses around it.