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Author Topic: Low volume -- herd behavior?  (Read 1109 times)
Vandroiy
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June 29, 2011, 01:09:32 PM
 #1

Again and again I see this happening: the volume practically starves out until random fluctuations push price some way -- and then, something strange happens. More often than not, wild fluctuations occur after some disturbance. One might expect people having quite a few open orders and some placing new ones in similar patterns as before, but instead they suddenly change their minds, trading with much higher volume at a price less favorable for them.

It looks like a herd movement; if one goes one direction, others follow.

Anyways, volume is rather low once again. A single buy and some ghostly adding and removing of bids was all that really happened. We all know there are people with hundreds of thousands of BTC on mtgox, yet few sell orders are placed in advance, even at significantly higher rates. Probably it's again volume that appears late once there was a movement.

So far, stagnation with low volume was followed either by an accelerating decline or a sudden upwards spike and fluctuations. Someone holding on to BTC without having an order placed will profit from neither case, at least in the short term. Now, I know quite a few people intend to hoard BTC for a while, but we have a large amount of speculators here; illiquid market is an understatement for the current situation.
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epi 1:10,000
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June 29, 2011, 05:51:51 PM
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mooooooooooooooo
Nagle
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June 29, 2011, 06:18:08 PM
 #3

That's inherent in a system that's mostly limit orders - if the price isn't moving, trading stops.

What's really interesting is how many "buy" orders are outstanding on Mt. Gox. There are over a million dollars of limit orders displayed below the current price.  Each of those supposedly has a cash deposit behind it. Who's putting up all that cash? And why are they keeping it in Mt. Gox?
enmaku
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June 29, 2011, 06:22:17 PM
 #4

That's inherent in a system that's mostly limit orders - if the price isn't moving, trading stops.

What's really interesting is how many "buy" orders are outstanding on Mt. Gox. There are over a million dollars of limit orders displayed below the current price.  Each of those supposedly has a cash deposit behind it. Who's putting up all that cash? And why are they keeping it in Mt. Gox?

Does anyone have hard numbers on how many of the 61,000+ accounts compromised actually got reclaimed? I've heard estimates of 10 to 20 thousand. If so, 1,000,000/20,000 = $50 per user and 1,000,000/10,000 = $100 per user on average. Doesn't seem too outrageous to me...

bitclown
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June 29, 2011, 08:25:20 PM
 #5

Who's putting up all that cash?
IANAE, but I'd guess it's Bitcoin bigwigs who cashed out at 20-30$ and aren't really in a hurry to buy.

And why are they keeping it in Mt. Gox?
It takes ages to withdraw, so they may as well play with the market. They could push up the price or just risk buying coins at 1/2 the price they sold at.
Vandroiy
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June 29, 2011, 11:38:59 PM
 #6

Who's putting up all that cash?
IANAE, but I'd guess it's Bitcoin bigwigs who cashed out at 20-30$ and aren't really in a hurry to buy.

And why are they keeping it in Mt. Gox?
It takes ages to withdraw, so they may as well play with the market. They could push up the price or just risk buying coins at 1/2 the price they sold at.

I just want to add something to that.

This is one potential scenario I use, and in my mind, it is equivalent to an imminent crash. If the money influx dropped significantly, take even the current (low!) volume, those orders would be filled in a matter of two days. It would cause a classic crash, setting in within the next week or so.

So, if you hold on to BTC, you better hope it's not just early adopters playing speculator who kept the price supported for multiple days. Wink

Most likely, it's a mixture -- and the proportion will determine the short-term outcome. I guess we'll know more by the end of the week.
FreeMoney
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June 30, 2011, 12:36:37 AM
 #7

So you've noticed that when things stop being still they get wild?

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Vandroiy
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June 30, 2011, 12:48:58 AM
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So you've noticed that when things stop being still they get wild?

You don't find that strange? We jump between stagnation and nuclear, where's the normal in-between mode?
cbeast
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June 30, 2011, 12:58:47 AM
 #9

Maybe people are bored with bitcoins. It's not like you can roll around in them. There's not a lot you can spend them on yet. Wait until they have apps developed for using them out in public. You will see things done with bitcoin that have never been seen done with cash. Then there will be market interest.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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