Alternative Indications of Price Trends

[GoWest]

June 1st was the beginning of the run from approximately $8 to $30 which took place over eight days.



Member sign-ups on this forum have fallen to the level they were at around May 12th, so we can say that interest in Bitcoin is currently around mid-May levels.  Member sign-ups actually rose to the high two-hundreds and above four hundred on May 31st (not shown) before the big price increase to $30, so we should expect to see a comparable rise before the next big up trend.



Google Insights for Search indicates that current interest in Bitcoin continues to slump and is around the May 15th level.  You could also say that we're at the May 28th level, but based on the number of forum signups we're seeing right now, interest seems to be more in line with what we were seeing back in the middle of May.



I would conclude, therefore, that an immediate spike over the next few days is highly unlikely (unless one of the big online players suddenly announces that they're accepting Bitcoin), and that we probably have two more weeks of consolidation left before the next big price increase, which could take us to the mid-40 range sometime around August 8th.  Don't expect a straight line up either, it will probably be a bumpy ride through the 20's as we grapple with several levels of yet-to-be challenged resistance from early to mid June.

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[afro25]

So, to sum it up into three words....

Buy, Buy, Buy!


Right?
I wish i had some more money i could invest lol.

[nmat]

So, to sum it up into three words....

Buy, Buy, Buy!


Right?

Not really. I think it was more like: nothing is really happening right now so let's wait and see.

[Smalleyster]

Very interesting analysis, thank you!

[afro25]

So, to sum it up into three words....

Buy, Buy, Buy!


Right?

Not really. I think it was more like: nothing is really happening right now so let's wait and see.

He talks about a potential price increase to $40+ around August 8th...

[netrin]

Thanks for sharing the forum registration (and google) trends. However, your conclusion rests on the premise that new liquidity comes from new members. This may be correct, and certainly new blood would help, but it does not logically follow from the trends.

As a falsifying case, because of the recent collapse and plateau I no longer suggest that ignorant friends buy bitcoin. Indeed one friend sold his positions and despite my arguments does not intend to buy again until prices increase. None the less, I am buying modestly.

[error]

Thanks for sharing the forum registration (and google) trends. However, your conclusion rests on the premise that new liquidity comes from new members. This may be correct, and certainly new blood would help, but it does not logically follow from the trends.

As a falsifying case, because of the recent collapse and plateau I no longer suggest that ignorant friends buy bitcoin. Indeed one friend sold his positions and despite my arguments does not intend to buy again until prices increase. None the less, I am buying modestly.

I hope you didn't advise him to follow the "buy high, sell low" strategy!

[netrin]

Thanks for sharing the forum registration (and google) trends. However, your conclusion rests on the premise that new liquidity comes from new members. This may be correct, and certainly new blood would help, but it does not logically follow from the trends.

As a falsifying case, because of the recent collapse and plateau I no longer suggest that ignorant friends buy bitcoin. Indeed one friend sold his positions and despite my arguments does not intend to buy again until prices increase. None the less, I am buying modestly.

I hope you didn't advise him to follow the "buy high, sell low" strategy!

In effect $17-$14, but I tried to argue "...if I may say, history
has shown bitcoin/dollar cycles of steady plateau, slight declines
before surging up, overshooting, and steady again at new plateaus in
roughly 2-3 month time series. Buying high and selling low is not a
winning strategy on a volatile asset. Despite Mt. Gox getting hacked a
few weeks ago (unfortunately just before your buy in), we're..."

[GoWest]

Thanks for sharing the forum registration (and google) trends. However, your conclusion rests on the premise that new liquidity comes from new members. This may be correct, and certainly new blood would help, but it does not logically follow from the trends.

As a falsifying case, because of the recent collapse and plateau I no longer suggest that ignorant friends buy bitcoin. Indeed one friend sold his positions and despite my arguments does not intend to buy again until prices increase. None the less, I am buying modestly.

I hope you didn't advise him to follow the "buy high, sell low" strategy!

I bought at 25, 23, 20, 18, 16, 15, 14, 13.... each time with more money.  Looks like I finally caught the dagger!!

[Bitcoin Swami]

I've never heard the buying high selling low strategy.. seems like that isn't very smart?

[SlipperySlope]

It may be that the proposed indicators are not predictive, but rather coincident or lagging.  If the rally of the past couple of days persists, it will be interesting to align the turning points of the proposed alternative indicator data series with the bitcoin price series to see whether the rally was indeed predicted, or perhaps merely confirmed.

I put more stake in the indicators that track active bitcoin wallet nodes and transaction bitcoin-days, as proposed elsewhere.

[error]

I've never heard the buying high selling low strategy.. seems like that isn't very smart?

It's not, but that doesn't stop people from doing it. In fact, somewhere close to half (give or take) of the people trading Bitcoins do it.

[spruce]

I've never heard the buying high selling low strategy.. seems like that isn't very smart?

It's not, but that doesn't stop people from doing it. In fact, somewhere close to half (give or take) of the people trading Bitcoins do it.

Not necessarily. You may find there are a bunch of people who bought high and haven't sold (like me), and a bunch who mined long ago who "sold low," where it would be low for me but not for them.

[GoWest]

Just a quick note that today we hit a one-week high for new member registrations on this forum. 

Yesterday, Google Insights for Search reported high interest from France - it was the first time I've seen France on the top 10 list.

The overall global search popularity still remains low compared to the last two months.

I will keep an eye on the stats and continue to report in this thread.

[spruce]

I will keep an eye on the stats and continue to report in this thread.

Thank you. It will be interesting to see how your theory pans out. 

[GoWest]

Yesterday, July 28th, there were only 142 registrations, which is the lowest since May 15th, two-and-a-half months ago. 

Assuming this is one of the leading indicators, as I'm postulating, then we're going to be headed lower in the near term.

[Tronlet]

I've never heard the buying high selling low strategy.. seems like that isn't very smart?

It's not, but that doesn't stop people from doing it. In fact, somewhere close to half (give or take) of the people trading Bitcoins do it.

Are you serious? How do you know this and why on earth do they do this, as a charitable service to the rest of us?

[error]

I've never heard the buying high selling low strategy.. seems like that isn't very smart?

It's not, but that doesn't stop people from doing it. In fact, somewhere close to half (give or take) of the people trading Bitcoins do it.

Are you serious? How do you know this and why on earth do they do this, as a charitable service to the rest of us?

Remember, you can only buy what someone else is selling, and only sell when someone else is buying. It takes two to tango.

[Tronlet]

I've never heard the buying high selling low strategy.. seems like that isn't very smart?

It's not, but that doesn't stop people from doing it. In fact, somewhere close to half (give or take) of the people trading Bitcoins do it.

Are you serious? How do you know this and why on earth do they do this, as a charitable service to the rest of us?

Remember, you can only buy what someone else is selling, and only sell when someone else is buying. It takes two to tango.

Ah, excellent point. I was a bit distracted in my previous post. In the end no one wins or loses overall except the exchanges, since the money someone earns was lost by someone else, of course.

[GoWest]

24hr volume on MtGox is currently at 7439BTC - I have never seen it so low.  Also it looks like today's registration count on the forum is going to be in the 120s, even lower than yesterday.

To put it succinctly, we are in a major lull.  Volume has essentially dried up, and new interest in Bitcoin has waned significantly.

The question is, are we at a trough in the trend or are we headed lower?

My recommendation would be to continue accumulating at this level.  On a daily basis, we're seeing breakthroughs in accessibility and easy of use.  The "green address" approach that was introduced today effectively eliminates transaction delays altogether - that's huge.

Additionally, on a recent Bitcoin Show, the CEO of CampBX mentioned that they're in negotiations to allow for credit-card purchases of Bitcoins, which would be another huge breakthrough, opening the market to a whole other demographic.

I would not be surprised to see other announcements in the coming weeks which will re-invigorate interest in Bitcoin - resulting in a large increase in Bitcoin value.

Until then, we trudge along...

[netrin]

I've never heard the buying high selling low strategy.. seems like that isn't very smart?

It's not, but that doesn't stop people from doing it. In fact, somewhere close to half (give or take) of the people trading Bitcoins do it.

Are you serious? How do you know this and why on earth do they do this, as a charitable service to the rest of us?

Remember, you can only buy what someone else is selling, and only sell when someone else is buying. It takes two to tango.

Ah, excellent point. I was a bit distracted in my previous post. In the end no one wins or loses overall except the exchanges, since the money someone earns was lost by someone else, of course.

"Husbands cheat more often on their wives than wives cheat on their husbands."

For every coin sold was a coin bought, but not for every winner was there a loser. It is possible that ten fools bought the same coin for a price twice as high as the previous fool but sell to the next fool for twice again. Only the last fool is a potential looser until he sells.

Bitcoin is a scarce resource. Fiat is not. The only losers are the holders of dollars and euros.

[GoWest]

Notable uptick on Google Insights for Search on July 31st.  I've noticed, in the past, that these upticks are sometimes "false" and end up being corrected over time, but I will keep an eye on this one.  Consider this a warning of possible sentiment change in the near future.

[Edward50]

before the next big price increase, which could take us to the mid-40 range sometime around August 8th. 

LOL, mid-40 range by August 8th. Your right that we are heading back to previous months interest levels,  you specifically said mid-may. Do you know the price range in Mid-may? try around $5 dollars, that is where we are heading.

 I do not know how you can analyze all that information and conclude we are heading back to previous months interest, which is much lower, and then expect to have a whopping price increase in such a short time when interest is falling and probably will continue to fall.

your analysis proved one thing, SELL SELL SELL, interest is falling and we are heading back to mid-may levels, and will even go back to further lower interest levels.

[GoWest]

before the next big price increase, which could take us to the mid-40 range sometime around August 8th. 

LOL, mid-40 range by August 8th. Your right that we are heading back to previous months interest levels,  you specifically said mid-may. Do you know the price range in Mid-may? try around $5 dollars, that is where we are heading.

 I do not know how you can analyze all that information and conclude we are heading back to previous months interest, which is much lower, and then expect to have a whopping price increase in such a short time when interest is falling and probably will continue to fall.

your analysis proved one thing, SELL SELL SELL, interest is falling and we are heading back to mid-may levels, and will even go back to further lower interest levels.

Yeah, the price prediction was obviously premature, if not baseless.  From now on I'll stick with assessing the trend and not predicting prices.

[CurbsideProphet]

before the next big price increase, which could take us to the mid-40 range sometime around August 8th. 

LOL, mid-40 range by August 8th. Your right that we are heading back to previous months interest levels,  you specifically said mid-may. Do you know the price range in Mid-may? try around $5 dollars, that is where we are heading.

 I do not know how you can analyze all that information and conclude we are heading back to previous months interest, which is much lower, and then expect to have a whopping price increase in such a short time when interest is falling and probably will continue to fall.

your analysis proved one thing, SELL SELL SELL, interest is falling and we are heading back to mid-may levels, and will even go back to further lower interest levels.

Yeah, the price prediction was obviously premature, if not baseless.  From now on I'll stick with assessing the trend and not predicting prices.

Well, this is the speculation section.  Feel free to speculate

[GoWest]

The Google Insights for Search uptrend remains intact.  This is the most significant uptrend since July 14th, though there wasn't a notable price change at that time.  There was no corresponding increase in the rate of forum membership registrations over the last few days (could be partially because bitcoin.org no longer points to these forums), however, Bitcoin media attention is also on the rise - there was a significant number of new articles/reports on Bitcoin today.

If the search interest continues to increase through to the weekend, I am predicting a price move to the upside by early next week, perhaps back to the $13-$14 range.

Yes, I'm back to predicting prices again. =)  What can I say, it's the fun part.

[netrin]

Despite enormous chaos in our little economy, the news has been generally positive for weeks. I think journalists who felt the need to call out a ponzi scheme trawled their trolls in previous weeks. Nay-sayers hoping to report 'i told you so' will have to keep their mouths shut for now.

I am not as optimistic as you in the near term. However, I compare the price of today with the price in December 2010. If the correlation is real, we're gonna bounce around for a while but should skyrocket this or next month. I'd be very curious to see you compare your indicators October-January with April-today.

[GoWest]

I'd be very curious to see you compare your indicators October-January with April-today.

There you go.  Back in January, the search volume increase lags the price increase (I was just looking at your chart and comparing it to mine).  It makes sense for back then, because there just wasn't a lot of media coverage, if any.  The upward price movement would have driven interest, not the other way around.  These days, with all the media attention, I believe interest is driving price movement.  That being said, a sharp upward price move would also generate further interest, creating a positive feedback loop.

[netrin]

[GoWest]

Google Insights for Search continues to be a leading indicator of price trends.  The search uptrend began on July 30th while the Bitcoin price did not bottom out until August 6th.  This looks like a clear breakout from the 5 week-long downtrend and could signal the long awaited post-bubble bull market which could take us to new highs in the coming weeks.  I would definitely recommend a buy and hold strategy.

[zby]

The google trend looks promising until you realize that it is mostly from the negative press, in the long term this still might turn positive but in the short term it will not mean any break out - so there will be plenty of time to buy at better prices after people realize this.  Of course this is pure speculation (but I have sold what I bought on the weekend

[TiagoTiago]

I wanna see where this is going

[Oldminer]

Yea a bit contradictory of late I must say...

[GoWest]

Let's take a look at the latest data...



New memberships on the forum continue to decline, and we're now at April levels, with even some days in March having higher numbers than what we've seen over the last couple of days. 



Google Trends continues to decline, although there was a spike at the beginning of the month.  Was the spike a leading indicator of the price recovery? Possibly.  Google Trends is telling us that we'll be back in the single digits shortly, though I would say everyone else on this board thinks that is highly unlikely, going into the Bitcoin Conference.



And of course, the chart.

Overall, these alternative indicators predict a continued downtrend.  If we continue up past $15, I would say these indicators are not helpful.  If we continue back down to $5 and below, then they've proven themselves useful.

[Bitcoin Swami]

Let's take a look at the latest data...



New memberships on the forum continue to decline, and we're now at April levels, with even some days in March having higher numbers than what we've seen over the last couple of days. 



Google Trends continues to decline, although there was a spike at the beginning of the month.  Was the spike a leading indicator of the price recovery? Possibly.  Google Trends is telling us that we'll be back in the single digits shortly, though I would say everyone else on this board thinks that is highly unlikely, going into the Bitcoin Conference.



And of course, the chart.

Overall, these alternative indicators predict a continued downtrend.  If we continue up past $15, I would say these indicators are not helpful.  If we continue back down to $5 and below, then they've proven themselves useful.

The sharp decline of members could be because the site was ripped away from the bitcoin.org homepage.  As for the other indicators who knows.