In my
last post I said, on 22th Oct (1200CNY)
it is definitely not solid, Chinese traders are not confident - you have to decide for your own if there will be a straight bull market as confidence gets confirmed and grow, or an early rush sell. I myself betted the former and am exposed to the risk of latter, because it is too risky to be prudent.
So I was right. You may think I made money. No, that's another story, see end of this post*.
Yesterday the price had topped 2680CNY and this morning (in China) at 2200CNY for the whole morning.
My esitmation of the sentiment is, like before, that people (Chinese) don't hold positive outlook of the future of digital currency, but we play it. This is a Chinese thing; the fun is in the game. We played it in A-share stock market and name the game 搏傻. To summarize the culture background: When psycology is at work there isn't much debate of currency's future value. That means capitulation comes more complete than in the west.
So as I observed. The price dived -200CNY or -300CNY a few times in the last 24h hour, there are players who are ready to quit the game. But the price was pushed back also as quickly. It is hard to believe this would happen if you just look at the order book - usually the sell queue is more dense than the buy queue, the space between sell order is usually 1 to 3 CNY and the space between buy orders, 10CNY. In this case, market should crash, but it didn't. Why?
It means there are a lot of 'hidden' contract, whose master is defending certain lines, or using the crash opportunity to build profolio. The question is who are they. Are they the mod? I think this behaviour is
not inline with the sentiment I observed.
To me it means there are bigger fish in this small pond. I assume they talk less in QQ (I hang there for some time) and is using the same tactic they did with stock market. They are late in the party and need time to build profolio. I couldn't verify this with data models (as I do stat in GNU R from time to time) as I am travelling in Thailand and couldn't concentrate, yet there is no time for the prudence to post well verified theory here. They used hidden contracts a lot back in the days they manipulate Shanghai A-share, urben ledgent of such people was popular. (hidden contracts are market orders that is placed when the price reaches a threshold).
The big fishes are not value-based investors - to build a lasting currency against government manipulation is simply out of the line of the Chinese zeitgeist I observe - the zeitgeist is to try to take advantage of government manipulation - you may notice there are rarely cursees and resentment towards government in bitcoin forums and qq in China like you would observe here, despite Chinese government being not any kinder. Fewer believed it is a better world if BTC replaces fiat currency. We take government mainpulation as you take nature: use it, keep it, not to fight it. In China we do to the nature like you do to your goverment: criticize it, ask more from it, ask even more from it, and blame its failure.
So are the big fishes satiated? I feel not. It takes a lot of effort to build data model to study this, by the time I can deliver a report it would be too late. But consider the size of China and lack of investment outlet for the rich, I feel the fishes are not satiated with the current 35billion CNY market size. The small players who mined hard and ready to leave the game is being replaced by the professionals - and professional gamblers too, who are also ready to quit the game at later stage. These big fishes are satiated when most small players give out their holding. That's my take. This could be very wrong, if the trade data is carefully studied. It is not backed by hard evidence and the hidden contracts has other explanations, like worried speculators.
--
* So why I didn't make money even I betted the right horse? My homebrew tradebot caught unaware when BTCChina changed their API's behaviour (of accepting Null in an API call -> changed from string 'false' to digit 0 then to boolean False, and the change was without announcement, even the API document is not downloadable, had to fetch from search engine cache to see the change). It caused my pet trade bot to misbehave, reaping the flower before it boom (sold all before the hike). I am not going to take legal action or try getting money back from BTCChina, other Chinese on the forum knows it doesn't work. BTCChina offers such rudimentary API and change it as their wish, awaring of the disruptive nature at the current stage means speculators are to cover themselves.
Even worse, right after my pet trade bot misbehaved, I engaged a tight-planed trip, and have no time to correct until today, and the price doubled since. That's why I really want to partner someone to work on bitccoin trading (in my signature I said I am open to partnership), so when I am really engaged in something others can cover me.
And I am welll aware of BTCChina's problems, I even wrote an post:
"World's biggest, China's safest" exchange BTCChina.com is far from professional, had to live with the world's biggest trading platform, I experimented with 6 trade platforms, ANY other markets have better API but ANY other markets' spread is too wide for a trade bot.
