The Bounce is Official

[Bitcoin BEAR]

Remember that if someone is going to dump 1000 coins on Gox now, we would approximately go down by 40 USD. The guy doing that would have pocketed around USD 880.000, but the Bitcoin marketcap would decrease by USD 480 Mio.

Thats why Bitcoin market cap is not usefull indication of anything, what matters are the buy orders placed

This is a false sense of security!
Most of the bids have no intention of buying unless the price drops first to hit said orders. Many of those will be pulled and replaced at a better price or not replaced at all. Much of the bid side of the order book is just fluff... Padding and propping the price.

On the other side, I read a lot of posts talking about the cumulative ask depth and that there are believed to be "only 12K Bitcoins for sale" in existence.This is another wrong assumption. At these prices, where no one can truly know where the top is, most sellers don't place asks. They wait for their price to get hit before just dumping on the market. After all, they wouldn't want to create unnecessary resistance 'To Da MOOOON!', would they?

[1714918942]

1714918942

[1714918942]

1714918942

[1714918942]

1714918942

[1714918942]

1714918942

[Edward50]

Its interesting to watch and I think it is going to break $1000, and rally higher.

I am a long time bear and can not believe that the price has rose to the prices they are now. I also can not believe that it is shooting back up so fast.

Part of the reason is most people just sit away and let it climb, only a few people will cash out and benefit.

I think this is a good opportunity to buy short term and ride it up, as soon as it shows signs of weakening then sell.

[trace666]

Two words:  low volume.
Now that might change but until it does it doesn't show any conviction in the reversal.

I don't quite buy the low volume argument (whatever it may indicate for future price movements).
http://data.bitcoinity.org/#caaaaddgaa
Yesterday there was quite a bit of volume, in particular on btcchina. Not as much as in the last few days during the crash, but more than last month's average.

[Anon136]

Two words:  low volume.
Now that might change but until it does it doesn't show any conviction in the reversal.

I don't quite buy the low volume argument (whatever it may indicate for future price movements).
http://data.bitcoinity.org/#caaaaddgaa
Yesterday there was quite a bit of volume, in particular on btcchina. Not as much as in the last few days during the crash, but more than last month's average.

thats what i was thinking. if the price action was following a different market than there would be an objective quantified number that you are trying to reach therefor there wouldnt be any disagreement among bulls and bears in the trailing market, no debate about whether the price should be higher or lower. That would lead one to expect low volume. I think this is what we saw, mtgox was trailing btcchina and on btcchina we have very normal volume.

[rocks]

People need to cash out slowly. Imagine, if just 2% of all people cash out quickly (or everyone just sells 2%). That would be 240,000 coins hitting the exchanges. Look at the order books and make your own guess...

Remember that if someone is going to dump 1000 coins on Gox now, we would approximately go down by 40 USD. The guy doing that would have pocketed around USD 880.000, but the Bitcoin marketcap would decrease by USD 480 Mio.

EDIT: (not implying that one person can move the market as such, I just want to point out how fragile the whole wealth in Bitcoin is)

No market of any size can support immediate liquidation of 2% of the entire market value.

If people tried to quickly cash out 2% of the world stock of gold, the price of gold would crash.
If people tried to quickly cash out 2% of all housing, the housing market would crash.
If people tried to quickly cash out 2% of all gov bonds, the bond market would crash.

If bitcoin is a store of value, 2% won't be quickly cashed out. The market does not have to support that.

[move_zig]

Two words:  low volume.
Now that might change but until it does it doesn't show any conviction in the reversal.

This MtGox volume doesn't look low to me. It's significantly higher than it was during most of the run-up.



I guess I should add all the markets together to get a better picture.

edit: bitstamp and btce show a similar chart

I'm not making predictions about the price movement, but I don't understand how you decided the volume was low.

[DeathAndTaxes]

Take a look at the volume on the red candles compared to the reversal and uptrend.  I am not saying it won't go up further, it certain may but for me an increase in the green candle volume would improve my confidence that the leg up is sustainable. Show me a run of green candles with volume spiking to where the red candles and it will remove all my doubts.

[RenegadeMind]

Take a look at the volume on the red candles compared to the reversal and uptrend.  I am not saying it won't go up further, it certain may but for me an increase in the green candle volume would improve my confidence that the leg up is sustainable. Show me a run of green candles with volume spiking to where the red candles and it will remove all my doubts.

But doesn't the red candle volume show that it takes a higher sell-off to push prices down, while less volume drives prices up? That seems to indicate a very bullish market to me. I could very well be wrong though... Please correct me if I'm reading this wrong.

[DeathAndTaxes]

Is the price going up?  Probably but higher volume shows higher conviction in the movement.  If it was moving up under high volume I would be more suprised with it flash tanking back to $600 or something like that.   If it moves up rapidly on low volume it really shows no conviction in the price movement.  It means a few trades and potentially a wide spread it all it takes to move the price up.  It doesn't mean a massive number of players are "betting" massive sums on their conviction that the trend is sustainable. 

Easy up = (potentially) easy down.

For the record before I get flamed I am not saying dump it all, it is going to crash, you should short it, or some magical line told me we are going to $671.38 within 48 hours.   I don't try to day trade the market.  Just pointing out that a lack of volume indicates a lack of conviction, a lack of support or base and like before if it reverses it is going to free fall.

[Anon136]

Is the price going up?  Probably but higher volume shows higher conviction in the movement.  If it was moving up under high volume I would be more suprised with it flash tanking back to $600 or something like that.   If it moves up rapidly on low volume it really shows no conviction in the price movement.  It means a few trades and potentially a wide spread it all it takes to move the price up.  It doesn't mean a massive number of players are "betting" massive sums on their conviction that the trend is sustainable. 

Easy up = (potentially) easy down.

For the record before I get flamed I am not saying dump it all, it is going to crash, you should short it, or some magical line told me we are going to $671.38 within 48 hours.   I don't try to day trade the market.  Just pointing out that a lack of volume indicates a lack of conviction, a lack of support or base and like before if it reverses it is going to free fall.

did you happen to see my argument up there? does it make any sense to you?

[DeathAndTaxes]

Yes it means it takes less volume to move the price up.  So yes it is bullish as long as the trend holds and when it doesn't hold there really isn't an conviction in that movement so those gains will evaporate in the blink of an eye as the price falls until it reaches support (which is usually where there was sustained upward movement on higher volume).

So easy come, easy go.

Also keep an eye on future volume uptrends often will wimper out on fading volume so if the price keeps moving up and the volume keeps moving down that is generally an indicator of a reversal.  The reverse is true in a crash, near the bottom of a crash volume will often explode to the upside.  This is the capitulation when the weak hands who held all the way down throw in the towel.  An outsized volume followed by falling volume and a reverse in direction is a good indicator the crash is over.

Remember these are just signs.  Things to look for and say "hmm" they aren't magic and they aren't always right but in mass humans are often predictable.  Rapid price gains on low volume make me doubt the underlying trend in the short term and I will keep an eye on it for other indicators.

[Oldminer]

I'd rather be in Bitcoins than in $$

[bitcoinanon]

It seems this bounce will plateau soon or it already has. But will it continue to dip or correct itself until the new year. I hope so. There is definitely some money to be made off those dips.

[outofservice]

It seems this bounce will plateau soon or it already has. But will it continue to dip or correct itself until the new year. I hope so. There is definitely some money to be made off those dips.

Hey bitcoinanon,

do you think ppl will (or should I say continue) cash out for some extra money for christmas?
maybe this dip is reinforced to ppl already doing so

if that's the case maybe we will see it dip to ~750. i'd grab me a handfull at that price.

[Hfertig]

People need to cash out slowly. Imagine, if just 2% of all people cash out quickly (or everyone just sells 2%). That would be 240,000 coins hitting the exchanges. Look at the order books and make your own guess...

Remember that if someone is going to dump 1000 coins on Gox now, we would approximately go down by 40 USD. The guy doing that would have pocketed around USD 880.000, but the Bitcoin marketcap would decrease by USD 480 Mio.

EDIT: (not implying that one person can move the market as such, I just want to point out how fragile the whole wealth in Bitcoin is)

No market of any size can support immediate liquidation of 2% of the entire market value.

If people tried to quickly cash out 2% of the world stock of gold, the price of gold would crash.
If people tried to quickly cash out 2% of all housing, the housing market would crash.
If people tried to quickly cash out 2% of all gov bonds, the bond market would crash.

If bitcoin is a store of value, 2% won't be quickly cashed out. The market does not have to support that.

There is just a slight difference compared to Bitcoin. In Bitcoin you got less than 1000 people holding more than 50% of all bitcoins.... None of the assets above have such an unequal distribution of wealth.

[BitChick]

People need to cash out slowly. Imagine, if just 2% of all people cash out quickly (or everyone just sells 2%). That would be 240,000 coins hitting the exchanges. Look at the order books and make your own guess...

Remember that if someone is going to dump 1000 coins on Gox now, we would approximately go down by 40 USD. The guy doing that would have pocketed around USD 880.000, but the Bitcoin marketcap would decrease by USD 480 Mio.

EDIT: (not implying that one person can move the market as such, I just want to point out how fragile the whole wealth in Bitcoin is)

No market of any size can support immediate liquidation of 2% of the entire market value.

If people tried to quickly cash out 2% of the world stock of gold, the price of gold would crash.
If people tried to quickly cash out 2% of all housing, the housing market would crash.
If people tried to quickly cash out 2% of all gov bonds, the bond market would crash.

If bitcoin is a store of value, 2% won't be quickly cashed out. The market does not have to support that.

There is just a slight difference compared to Bitcoin. In Bitcoin you got less than 1000 people holding more than 50% of all bitcoins.... None of the assets above have such an unequal distribution of wealth.

As time goes on the distribution will change a bit though.  It already has a little.

[theonewhowaskazu]

It seems this bounce will plateau soon or it already has. But will it continue to dip or correct itself until the new year. I hope so. There is definitely some money to be made off those dips.

Sure it will plateau, but bounces are always finite. That doesn't diminish its bouncishness.

[Honeypot]

Dip? Crash? It's been stagnating for a while now. I think it needs to crash a bit more before it finishes the correction.

[Soopaman]

Dip? Crash? It's been stagnating for a while now. I think it needs to crash a bit more before it finishes the correction.

It's been a slow trickle down and bounce back after hitting about $840 (stamp).

I think we don't have quite the steam needed to push back up and we'll see a slow trickle back down into the low $700's or maybe high $600's.

[Le Happy Merchant]

There is just a slight difference compared to Bitcoin. In Bitcoin you got less than 1000 people holding more than 50% of all bitcoins.... None of the assets above have such an unequal distribution of wealth.

http://en.wikipedia.org/wiki/Nathan_Mayer_Rothschild

Start digging.