Quick Market Analysis - 7/29 10 PM EST

[DrYe5]

TH Asks: $253,500.1
Gox Asks: $277,886.64
TH Bids: $160,727.65
Gox Bids: $643,869.39

Total Market Cap.: $1,335,983.78

TH Asks: 9,908.38 BTC
Gox Asks: 1,5696.07 BTC

25,604.45 BTC in Market
0.38% of all BTC Making the Market

TH + Gox Bids: 227,935.33 BTC
3.404% of all BTC Demanded


With so few bitcoins in the market place, it's safe to assume that the price is inflated. Long-time miners likely hold most of it and are currently responsible for the downward pressures. I believe most of the large holders are devout believers in bitcoin and will defend the price. I wouldn't rule out a fall to previous trading ranges.

EDIT: As discussed later in the thread, these values only represent fractions of Mt. Gox orderbook.

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[fascistmuffin]

I don't think miners are happy with the price being so low. The difficulty increased by 50%, and the market still hasn't changed. A lot of miners are holding on BTC hoping that price will follow the difficulty since mining profitability has effectively halved.

[peach]

Well said, DrYe5. I foresee either very nominal price increases or price drops in the short term.

[evoorhees]

Maybe I'm a noob here... but how are these figures relevant when there are "dark pools" which hide X amount of orders?

Furthermore, how many people just sit on the sidelines watching, without putting in formal bids? If I want to trade at X price, it doesn't mean I'll have a standing bid.

Seems that these are very big unknowns, no?

[DrYe5]

Maybe I'm a noob here... but how are these figures relevant when there are "dark pools" which hide X amount of orders?

Furthermore, how many people just sit on the sidelines watching, without putting in formal bids? If I want to trade at X price, it doesn't mean I'll have a standing bid.

Seems that these are very big unknowns, no?

Well that certainly leaves a lot of BTC to be accounted for. How much more than $800k do you think people are trying to spend on BTC?

Which dark pools exactly?

[stic.man]

are you seriously taking into consideration the fact that you can see tradehills entire book vs a much smaller percentage of gox's?

also where are you getting TH has 4X the asks of gox?

[chuckypalumbo]

I don't think miners are happy with the price being so low. The difficulty increased by 50%, and the market still hasn't changed. A lot of miners are holding on BTC hoping that price will follow the difficulty since mining profitability has effectively halved.

Agreed, I don't think those miners or holders like myself are going to bend at this level and get taken for a ride. The buyers side is going to have to come up because I don't see the sellers coming down. I'm not coming down, I've got my sell prices locked in and that's it

[Confucius]

Except difficulty follows price, not the other way around. The 50% difficulty increase is the lag behind the recent price rises. In two weeks if the price doesn't rise again the difficult will most probably drop.

[DrYe5]

are you seriously taking into consideration the fact that you can see tradehills entire book vs a much smaller percentage of gox's?

also where are you getting TH has 4X the asks of gox?

Wow thanks for catching that. Fixed. Someone is trying to sell 5 at $20 Million on TH. Makes the market look a wee bit bigger than it should. (Leaving the 5 in the total bitcoin count though ).

Data from:
http://bitcoincharts.com/markets/thUSD_depth.html
Buy or Sell 99999999: "Can't fill complete order! Buy 9957.58 BTC for 100254214.95 USD"

[Klestin]

Except difficulty follows price, not the other way around. The 50% difficulty increase is the lag behind the recent price rises. In two weeks if the price doesn't rise again the difficult will most probably drop.

Price can be affected by difficulty.  A miner who is now making half the number of bitcoins that he was two weeks ago may be less likely to sell at a particular price point.  It takes both a buyer AND a seller to make a trade, so something that affects the number of sellers at a particular price point can absolutely affect the price.

It's not the only factor in the price, nor even likely one of the larger factors, but it is undeniably A factor.

[newMeat1]

Nice try but your logic sucks. Lots of people are looking to buy, very few wanting to sell.

[NO_SLAVE]

is this stable enough for you?

doctor, the patient is deceased.

[Confucius]

EDIT: Contradicted myself completely. CBF replying again. too high
 


how to delete toast??

[bearbones]

I think the OP is a little misleading. As the mtgox crash showed us, there are hundreds of thousands of dollars sitting on the sidelines. If my memory serves me correctly, $1.3M worth of orders were filled by the sell off down to 0.01. Sure, some of that money may have moved, but I doubt that anyone was able to while mtgox was down. It is probably still there.

What's more, the mtgox depth chart does not nearly cover all orders. There are probably hundreds of thousands of dollars and at least tens of thousands of bitcoins in orders further out.

If 0.3% of the market was really setting prices, it would be entirely too easy to move funds into an exchange and shake these "market makers" out. If bitcoins were significantly overpriced, there would be an influx of bitcoins to exchanges and prices would drop.

The market is speaking, and we should listen.

[dinzy]

Except difficulty follows price, not the other way around. The 50% difficulty increase is the lag behind the recent price rises. In two weeks if the price doesn't rise again the difficult will most probably drop.

Price can be affected by difficulty.  A miner who is now making half the number of bitcoins that he was two weeks ago may be less likely to sell at a particular price point.  It takes both a buyer AND a seller to make a trade, so something that affects the number of sellers at a particular price point can absolutely affect the price.

It's not the only factor in the price, nor even likely one of the larger factors, but it is undeniably A factor.

More difficulty means more miners means more people in the market for BTC.  How many people that just hear of BTC start mining on their solo GPU or use BTC as an excuse to upgrade and also become part of the market?

I suppose it could also just mean some parties are investing more to get a bigger share of the pie, albeit at lower margins.

[DrYe5]

I think the OP is a little misleading. As the mtgox crash showed us, there are hundreds of thousands of dollars sitting on the sidelines. If my memory serves me correctly, $1.3M worth of orders were filled by the sell off down to 0.01. Sure, some of that money may have moved, but I doubt that anyone was able to while mtgox was down. It is probably still there.

Memory not acceptable as data. What I have shown is the entire book according to the above site. If you have a better source please share it.

If 0.3% of the market was really setting prices, it would be entirely too easy to move funds into an exchange and shake these "market makers" out. If bitcoins were significantly overpriced, there would be an influx of bitcoins to exchanges and prices would drop.

There is faith in a higher price.

[bearbones]

I think the OP is a little misleading. As the mtgox crash showed us, there are hundreds of thousands of dollars sitting on the sidelines. If my memory serves me correctly, $1.3M worth of orders were filled by the sell off down to 0.01. Sure, some of that money may have moved, but I doubt that anyone was able to while mtgox was down. It is probably still there.

Memory not acceptable as data. What I have shown is the entire book according to the above site. If you have a better source please share it.

By all means, research the crash yourself. I'm not digging around the internet for an hour to show you data I've already seen. Regardless of the USD holdings of mtgox users, it is well known that ~430k BTC were in their accounts. This is roughly 6.5% of the bitcoins in existence, if you believe that none have been lost.

If you think that the mtgox depth of market data is the full order book, you have to believe that there are no orders below $14.90. https://mtgox.com/code/data/getDepth.php

[bearbones]

I'd also like to add that you're only analyzing the USD portion of a global economy. There is an obvious flaw in that logic.

[DrYe5]

I think the OP is a little misleading. As the mtgox crash showed us, there are hundreds of thousands of dollars sitting on the sidelines. If my memory serves me correctly, $1.3M worth of orders were filled by the sell off down to 0.01. Sure, some of that money may have moved, but I doubt that anyone was able to while mtgox was down. It is probably still there.

Memory not acceptable as data. What I have shown is the entire book according to the above site. If you have a better source please share it.

By all means, research the crash yourself. I'm not digging around the internet for an hour to show you data I've already seen. Regardless of the USD holdings of mtgox users, it is well known that ~430k BTC were in their accounts. This is roughly 6.5% of the bitcoins in existence, if you believe that none have been lost.

If you think that the mtgox depth of market data is the full order book, you have to believe that there are no orders below $14.90. https://mtgox.com/code/data/getDepth.php

1. I have been served.

2. So you're saying only 6.5% of BTC are making the market?

[bearbones]

Full order books are not publicly available. You're misinterpreting what IS made available.

Or do you really think that EUR, GBP, OTC transactions, and even SSL don't make the market?

I'll leave services and goods out of this, as they obviously have nothing to do with valuing a currency...

[EDIT]I was, perhaps, overzealous. I get worked up when I read that bitcoin is overvalued. [/EDIT]