There is something weird going on in the BTC market:
The volume constantly decreases, while the price remains unchanged...
What does it mean ? Are we seeing market stagnation ? Or is the bitcoin overpriced perhaps ? Or maybe large speculators wants to fool us into thnking so ?
Can somebody with knowledge of currency markets put this in perspective ?
If anyone with coins thinks they are overvalued they can sell them right now, they are not, so that's not what's happening.
Fool us? Into thinking fewer trades are happening on mtgox? That's actually true, so we can't be fooled into thinking it.
People's relative desire for BTC compared to USD has not been changing much in the last few days, that's all.
Think about a very simple case. Person A has some red rocks and Person B has some blue rocks. A needs to have 2 blue rocks for some purpose, but generally prefers to have blue. Person B thinks they are roughly equal in value (since he just puts them in a bag hits people). So they trade 2 rocks on the first day. Now both have what they want. If nothing changes for them, they'll never trade again.
The more people involved the less likely it is for volume to drop to zero, but the idea is the same. Trades only happen when two people disagree about their marginal preference for the things involved. Once they happen the tension is relieved and another trade doesn't happen until there are pair of disagreers.
