.

[BitPirate]

I'll call him "Lamont" then

[meh32123]

Are we back in Denial once again?

[Arvicco]

I tried looking at some shorter term regressions, and I have to say that it only makes the picture more confusing.

Finally, i have settled on an even longer term than I was using when I started the thread that seems to put things into a pretty good focus. Given that, I am seeing a quiescent equilibrium point at about $114-$115, and I expect exchange rates to seek this level in the mid-term, or until we start to see some sort of concerted pressure one way or the other.

You're tracking only MtGox USD orderbook volume, right? I wonder if your analysis may be invalidated due to the fact that MtGox USD is currently illiquid trapped asset at best, and pure fiction at worst. There is strong suspicion that MtGox is artificially pumping 'virtual fiat' into their orderbook since May, which mostly coincides with the 'active management' artifact timeframe that you mentioned.

In my opinion, latest MtGox orderbook dynamics confirm this suspicion. Think about it, since July 12 MtGox orderbooks show almost linear inflow of up to 1 million USD per day, while other exchanges' orderbooks are pretty much flat. I mean, seriously?! Someone is putting 1 million USD per day into exchange that is NOT processing fiat withdrawals, but not into other LIQUID exchanges that have NO such restrictions, and BETTER exchange rate? Are you kidding me?

If this is indeed the case, your high equilibrium assessment is invalid because it is calculated based on 'virtual fiat' bid volume that has nothing to do with reality, but is there just to create an illusion of high demand.

I'd love to be proven wrong on this of course but Occam's razor is a fearsome weapon.

[notme]

I tried looking at some shorter term regressions, and I have to say that it only makes the picture more confusing.

Finally, i have settled on an even longer term than I was using when I started the thread that seems to put things into a pretty good focus. Given that, I am seeing a quiescent equilibrium point at about $114-$115, and I expect exchange rates to seek this level in the mid-term, or until we start to see some sort of concerted pressure one way or the other.

You're tracking only MtGox USD orderbook volume, right? I wonder if your analysis may be invalidated due to the fact that MtGox USD is currently illiquid trapped asset at best, and pure fiction at worst. There is strong suspicion that MtGox is artificially pumping 'virtual fiat' into their orderbook since May, which mostly coincides with the 'active management' artifact timeframe that you mentioned.

In my opinion, latest MtGox orderbook dynamics confirm this suspicion. Think about it, since July 12 MtGox orderbooks show almost linear inflow of up to 1 million USD per day, while other exchanges' orderbooks are pretty much flat. I mean, seriously?! Someone is putting 1 million USD per day into exchange that is NOT processing fiat withdrawals, but not into other LIQUID exchanges have NO such restrictions, and BETTER exchange rate? Are you kidding me?

If this is indeed the case, your high equilibrium assessment is invalid because it is calculated based on 'virtual fiat bid' numbers that have nothing to do with reality, but are just smoke and mirrors to create an illusion of high demand.

I'd love to be proven wrong on this of course but Occam's razor is a fearsome weapon.

Occam's razor would say that it is a simple case of fiat banks being shitty as usual.... not some crazy conspiracy threory.

[notme]

Lookee—I drew a line!

https://i.imgur.com/f4g2ZRn.png

So we're oversold/below equilibrium?

[HeliKopterBen]

I withdrew 150BTC from mtgox the other day and it showed up instantly.  Sorry you guys cant withdraw your fiat.

[Spekulatius]

I see a resistance range from 100-105 USD still. Before that is not broken I wont go long.

[N12]

Right now the magic threshold is really just about $100.

In the one week time frame I place $100 in the center of the negative feedback range. That means, the farther away from $100 we go on either side the greater probability we will go into positive feedback. There is still much greater sensitivity to positive feedback above $100.

Good observation, I see it the same.

99 = expensive
101 = cheap

[keystroke]

Right now the magic threshold is really just about $100.

In the one week time frame I place $100 in the center of the negative feedback range. That means, the farther away from $100 we go on either side the greater probability we will go into positive feedback. There is still much greater sensitivity to positive feedback above $100.

Well we got to $100.

[Arvicco]

Well we got to $100.

So now all we need is a good push beyond 115-120 to see if the positive feedback theory holds. If it does, we'll be back in all-too-familiar exponential overdrive mode before soon. If not, then maybe analysis based on doubtful orderbooktransaction volume of an illiquid exchange is not likely to provide meaningful insights.

[Arvicco]

It's not based on order book volume, but actual transactions.

Yes, I understand that you're tracking a form of OBV on equi-distant volume scale as related to price action. However, if we are working under assumption that the fiat order book side is artificially "managed" by Gox, what makes you think that the "actual" transactions volume is any more real?

[Kazu]

It's not based on order book volume, but actual transactions.

Yes, I understand that you're tracking a form of OBV on equi-distant volume scale as related to price action. However, if we are working under assumption that the fiat order book side is artificially "managed" by Gox, what makes you think that the "actual" transactions volume is any more real?

It would be terribly unfortunate for market participants if Gox were gaming the market in addition to extracting fees. I do not think that is what is happening. I really do think that Gox is simply bumping its head on the transaction volume available to it from its banking partners. Too bad for Gox, it really just means that they miss out on market share. I would like to think they are not willingly crippling themselves so.

Why would it hurt Mt. Gox's market share to trade on their own market? It just makes it look like its bigger than it really is, it seems like they really couldn't lose from doing it. That's why the entire centralized exchange model is unhealthy.

[adamstgBit]

Guess what happens next...

up up up 

[vokain]

so when slippage is low, whales will tend to accumulate?

[byronbb]

Hey chodpada can you recommend any books to read on the subject of markets etc. More layman than not and math isn't my language.

[humanitee]

I got to thinking about how a buy whale would calibrate a buying program by looking at the distribution of slippage for their buys. This is a view of my attempt to measure slippage, which is quite noisy. The yellow trace is a moving average of that metric scaled to price for reference.

Guess what happens next...

Dataporn.jpg

Nice chart, thumbs up. What was the function to calculate slippage?

[Nagle]

But that is not what I was talking about regarding their market share. The implication has been that foot dragging on USD withdrawals is supposed to somehow boost the price, and so benefit Gox somehow. Which is a ridiculous notion, because it ends up hurting their market share when they are less liquid than competing exchanges.

Mt. Gox's problems do increase the USD/Bitcoin price on Mt. Gox, because a dollar you can't get out of Mt. Gox is worth less than a dollar you can.

Whether Mt. Gox is 1) broke, 2) manipulating the market, 3) stealing customer funds, or 4) merely incompetent is not clear. Read the threads over in "Service discussion". The Mt. Gox situation is very bad and getting worse. 

[vokain]

I hope within 2 years I become proficient and familiar with all these tools like a carpenter's with his

[Arvicco]

The indicator is inherently noisy since it has a component of volume, so it is fairly useless to try to read it for the short term. The way I calibrated it was to adjust it so that the peaks lined up... Before you say, "that's just curve fitting" consider that, because there are many time constants at play it makes sense to focus in on a single time constant. Since I want to understand what is going on in the time frame of the major troughs and peaks that is where I focus the metric.

The metric you're tracking (yellow line) seems to be absolute rather than relative. So, during the previous boom/bust cycles it is just oscillating around zero while during the current cycle it's blown out of proportion. This makes the metric hard to compare across cycles. I would think that price-percentage wise, slippage is not so much different across cycles. Don't you think that a relative metric (taking out price scale effects) is more relevant here? Or you don't care much about comparing different cycles and only focused on current metric readings that help you to assess where we stand in terms of feedback?

[Adrian-x]

It seems to be focused pretty good at about $126. The time frame is iffy, but is on the order of 2-3 weeks.

If we hit the $126 how viable do you think the positive feedback loop thought will play out?