rpietila Wall Observer - the Quality TA Thread ;)

[vokain]

When "everyone" thinks it will go down, the reverse happens. Right now the number of actual bears is quite small. There is much bear-ridicule though. That is a sign that the bulls are nervous.

Fact is that price has been sliding down for 3+ weeks, making 4-5 lower highs and the recent lower low. Nobody is buying.

A sudden massive influx of new money would make it a CCMF now. Otherwise, next week or the one after, the most nervous of the bulls will pull the trigger and the capitulation will start.

Another thing is that because it's been taking so long, the ones who sold in anticipation of a buyback have started wasting the money For example I have taken more and more out of the exchange. The hopes of the bulls, that bears will capitulate and start buying at these levels are delusional. It has not happened so far and will not happen. My buyback level has not budged from $400.

I'm actually not sure about that. It's something bulls keep repeating (followed by the "bears will panic buy after nothing happens on the 31st" prediction), but it's not so obvious to me.

I am 0% in Bitcoin at the moment, because I am essentially a bear for the near term. However, I pulled my latest short bet as:

A) Fk all is happening for the time being.

B) I could see Bitcoin taking a surge upwards as the Bitcoin Nutters pile in on the back of some 'good news' or whale manipulated bullish signals, inspiring widespread confidence and investment to rush into Bitcoin, at which point some whale(s) looking to actually turn a sizeable chunk of of his digital code into actual spendable wealth will pull the trigger and smash a shit load of coins into rabidly aggressive bid walls on markets all over, maximising yield of USD but turning the tide on Bitcoin horribly.

Bitcoins rapid rise in 'value' is based largely on restricted supply. It is a cornered market and the Bitcoin whales know this and know what they need to do to make sure they maximise their benefit from it.

This is perhaps a bit of a wild theory, but as a bear, I do not trust right now to be a good time to be short Bitcoin, but a bear I have to remain because my gut tells me that I have got to be at this point in time in addition to my Tech Analysis 101 skills adding weight to the bearish case by the day, especially the break down from the 3 week long descending triangle a few days ago.

I am not just bearish, I sense that there is going to be a slaughter. I am musing over the idea of Bitcoin taking a ostensible bullish leap forward before the bloodbath, simply because this would be the absolutely most brutal scenario that could possibly play out, and the Bitcoin world is a ruthless cut-throat shark infested world.

Bitcoin......run and dominated by 'libertarian lovers of freedom'?

Not in the world that I live in it aint.

if you bears here have already sold and are publicly talking about it, how many are left to keep/bring the price down considering their upside risk? panicking hodlers i could see, but even then the crowd has been disciplined enough (i see it in the crowd around me, selection bias possibility i know) with bitcoin's past wild price movements. it's just an expectation for people buying into bitcoin  nowadays.  I also suspect that it is becoming more obviously apparent that bitcoin is a superior store of wealth as compared to fiat, so the incentive to hold/buy in has never been stronger. is purchase demand really not that strong enough to support seller demands above 400? I simply find the idea a bit dramatic is all, considering rising user counts (per Mr. Pietila's research) and the 12.x million Bitcoins outstanding

just trying to assess and weigh buyer and seller flows

[1714298586]

1714298586

[1714298586]

1714298586

[1714298586]

1714298586

[aminorex]

The folks who only read about mining, or politics, on this forum will mostly be holders, quietly and mildly bullish, or flippers, quietly and mildly bearish.  They won't swing with momentum much if at all.  The speculators who read here will be quite bimodally distributed, prone to reverse at the worst time, and the speculators who don't read here will be somewhat more diffusely distributed.

[vokain]

The folks who only read about mining, or politics, on this forum will mostly be holders, quietly and mildly bullish, or flippers, quietly and mildly bearish.  They won't swing with momentum much if at all.  The speculators who read here will be quite bimodally distributed, prone to reverse at the worst time, and the speculators who don't read here will be somewhat more diffusely distributed.

curious, how did you get into bitcoin? was it anyone in particular you know?

better question actually, did anyone learn about bitcoins from you?

and what do you tell them when they ask you if they should buy/sell their coins?
hold?

do they typically do as you say, perhaps out of trust?

-considering subnetwork effects of culture
my subnetwork typically trusts me more than they trust bitcoin is why I ask

[MatTheCat]

if you bears here have already sold and are publicly talking about it, how many are left to keep/bring the price down considering their upside risk? panicking hodlers i could see

I am a relative small fry who never actually got into Bitcoin on a speculative basis until the $700 range in Nov. I missed the boat. Clearly my capital is going to be a lot more sensitive to the potential for downside volatility. It is the likes of me, whether with a large or small ball of capital to roll around, whose investment Bitcoin needs to attract to really get up to the next level. But at this point in time, I am not convinced.

But you are correct. It is not Johnny Come Lately bears that you have to fear for causing a Bitcoin landslide. It is the Bitcoiner at the exact opposite end of the scale that you need to concern yourself with. I read that only 3% of all Bitcoins are in regular circulation. The rest hoarded. About half of them owned by just 49 early adopter whales. These whales, whoever they are, will know very well that Bitcoin is hyperinflated on the back of limited supply being combined with the surge of interest from China, which is being brought to an abrupt halt. Even at $800, these guys know that Bitcoin is wildly overvalued. It will just take one of the these guys to get nervous or break ranks and make a grab for gold (Bitcoin is not gold, USD is gold) and this market will take exactly the same kind of slaughtering that any hyper ramped penny stock market takes when the early investors/ ramp masters decide to close their position.

At this point in time, I believe that there is a very strong possibility of this sort of scenario playing out and the market would have to convince me emphatically otherwise, in order for me to change my outlook and feel confident in a long position. I imagine that most new wise money to Bitcoin feels the exact same, which is perhaps why a 'final capitulation' needs to happen.

[vokain]

It is the Bitcoiner at the exact opposite end of the scale that you need to concern yourself with. I read that only 3% of all Bitcoins are in regular circulation. The rest hoarded. About half of them owned by just 49 early adopter whales. These whales, whoever they are, will know very well that Bitcoin is hyperinflated on the back of limited supply being combined with the surge of interest from China, which is being brought to an abrupt halt. Even at $800, these guys know that Bitcoin is wildly overvalued. It will just take one of the these guys to get nervous or break ranks and make a grab for gold (Bitcoin is not gold, USD is gold) and this market will take exactly the same kind of slaughtering that any hyper ramped penny stock market takes when the early investors/ ramp masters decide to close their position.

i've heard this during every single consolidation period we've had since the climb from 2 back to 32 in 2011-12
there does come a point where those guys you speak of, the whales, will not need any more capital from bitcoin to necessitate the risk of selling out more than trivial amounts, where the risk of not being in bitcoin outweighs said selling


I wish there were statistics on the performance of those dumpers you speak of. I wonder how many were able to buy back more bitcoins than they sold

[MatTheCat]

I wish there were statistics on the performance of those dumpers you speak of. I wonder how many were able to buy back more bitcoins than they sold

At some point, the goal may not be about owning as many Bitcoins as possible, but maximising profit from a venture that government action around the world could bring to an abrupt halt, or at least send crashing back into the underground and with it, the Bitcoin price back to underground levels.

[vokain]

if you bears here have already sold and are publicly talking about it, how many are left to keep/bring the price down considering their upside risk?

I don't know. What % of bitcoiners post on the speculation subforum? I'm thinking not many.

unfortunately it's a question I don't think can be feasibly answered, more rhetorical than anything. But still, I wonder how much is left of the Bitcoin sliver that needs to be sold & bought before bear capitulation (pending prior bull capitulation of course) and how much volume of fiat is on the sidelines

I wish there were statistics on the performance of those dumpers you speak of. I wonder how many were able to buy back more bitcoins than they sold

At some point, the goal may not be about owning as many Bitcoins as possible, but maximising profit from a venture that government action around the world could bring to an abrupt halt, or at least send crashing back into the underground and with it, the Bitcoin price back to underground levels.

i thought the point of Bitcoin was that it was antifragile, idk.

you are referring to Bitcoin as a venture?
I see you and I count profit in different ways. I am trying to maximize profit from a venture that may or may not be crashing into the underground and with it, state prevalence back to underground local levels.

[Peter R]

MatTheCat, you discussed the possibility of early adopters selling coins.  But isn't this what's happening right now?  

If you look at almost any metric (blockchain.info wallets, Coinbase merchants, r/bitcoin subscribers, bitcoinqt downloads) they all show that adoption continues to rapidly grow.  Based on this alone, would you not expect the price to also be rising right now?  

Of course, the reason the price isn't rising is that these new people buying in are balanced by hodlers cashing out (to varying degrees).    

People who bought $500 worth of bitcoin in December are thinking: "hmm, I could really see this bitcoin idea taking off, now that I understand it.  I'd like to invest another $5000 over the next few month."

Meanwhile, people who invested $5000 over this last summer are now sitting on near $40,000 of value.  Perhaps a lot are in their 20s and this is now 80% of all their money.  They are thinking: "hmm, I'm more confident than even in bitcoin but maybe I should diversify a bit more, because nothing is a guaranteed bet."

I think this is exactly the same dynamic that took place after the April growth spurt too.  Eventually, all the people sitting on large gains have done enough soul-searching and sleepless nights that they've divested that magic amount that allows them to sleep soundly.  

Yet new people keep entering the market, and newbies keep increasing their positions.  

And then we see the next leg up.....

[N12]

We have seen the ups and downs and have realized it all works out in the end. 

This is the great delusion that markets bestow upon people, that a trend is invulnerable and "it all works out in the end" almost sounds like religious faith. I know that nothing I can say could possibly make you think otherwise, but still, please consider how you would react if Bitcoin slid 80% or 90% from here during the next 6 months. Even if the probability is small, are you ready for it?

Because this has happened before, and it happened in this very asset (even if you tell me that times are "different" now – well, to compensate, the price is higher to begin with!). I remember that time well. At the time, there was a long-term log support trendline, too, that was being drawn by everyone in this forum. It was violently BROKEN:



And guess what? That break ended up being the best time to buy. But few bought, for few had money to spare, and many of those who did have given up on Bitcoin. I will tell you that all along this decline, there was plenty of good news as well. I believe Bitpay was created amidst the bear market for example.

All I want to say is that eventually, all trends break. Prepare yourself for the improbable, because it is devastating to lose almost all of your wealth. Do not let your mind be compromised by Bitcoin cultists. Let this be a lesson from a former Bitcoin cultist who has made a fortune off Bitcoin by turning himself into a Bitcoin pragmaticist.

[Peter R]

All I want to say is that eventually, all trends break. Prepare yourself for the improbable, because it is devastating to lose almost all of your wealth. Do not let your mind be compromised by Bitcoin cultists.

Thanks Blitz.  This is the point I was trying to make regarding divesting until you can sleep soundly at night.  

Although I believe that bitcoin will be successful, how will I feel if it isn't?

If I don't divest enough now, it will be more painful if it all falls apart.  If I divest too much now, then it will be painful when it gloriously succeeds!  What to do, what to do....

I recommend Risto's SSS plan with a 10% - 15% divestment per "doubling."

Meanwhile, I'm staring at my cavirtex account pondering whether I've diversified enough.  Funnily enough, last night I was pondering whether I had diversified too much.  


EDIT: I should add that if you are young and have like $5,000 or $10,000 in bitcoins--just ride this f*&cker.  Worry about portfolio diversification in your thirties or after you're up $50k - $100k.

[N12]

Yes, exactly. Even if you initially intend to hold "long-term", if you don't have some form of risk management, there is too great a chance your mind will slide from Bitcoin illusioned to Bitcoin desillusioned purely because of a bear market – after all, it was merely a bull market that led you to the other opinion in the first place! – which creates a risk that even if you end up being correct in a few years, you will have sold out near the bottom and forsaken Bitcoin.

The importance of managing your expectations in order to have the ability to execute your plans is incredibly important IMO.

By the way, the flattest long-term support trendline that is being drawn nowadays, even though it is much less steep than the one drawn in 2011, still has the price doubling every couple of months. It would not be too difficult to go below it given enough time.

EDIT: I should add that if you are young and have like $5,000 or $10,000 in bitcoins--just ride this f*&cker.  Worry about portfolio diversification in your thirties or after you're up $50k - $100k.

Sure, if the money is nothing to you to begin with or it is easily regained from income, then there is less worry in the first place and you won't have to care.

[vokain]

Do not let your mind be compromised by Bitcoin cultists. Let this be a lesson from a former Bitcoin cultist who has made a fortune off Bitcoin by turning himself into a Bitcoin pragmaticist.

coming from the guy who spent all day everyday 'warning' everyone here "no more triple digits in 2013" as Speculation's moderator.
so at least I know where your neutrality stands.
I would only agree that today you are more pragmatic.

and honestly the least anyone here on this website who first owned Bitcoins in 2011 could do is make a fortune, relativity aside.

[N12]

coming from the guy who spent all everyday day 'warning' everyone here "no more triple digits in 2013" as a forum moderator.
so at least I know where your neutrality stands.
I would only agree that today you are more pragmatic.

and honestly the least anyone here on this website who first owned Bitcoins in 2011 could do is make a fortune, relativity aside.

I'm sorry if people took me seriously, it was fun for me, and I like triple digit Bitcoins. It was my way of managing expectations, and I wanted to point to the possibility of this. If you care to know, I've never shorted it and I still don't. Maybe I will reconsider that stance in quintuple digits.

The question nowadays is keeping the fortune, that is where the skill is involved. No risk management and soon it can be poof. I realize that many people here believe there is absolutely no risk to Bitcoin long-term though.

edit: Yes, I was a pure troll at that time, was having too much fun there agitating people. Same way I trolled the bears in Winter 2011 who were shorting on leverage via Bitcoinica. Maybe I need a disclaimer in my signature that I am not to be taken seriously sometimes?

[seleme]

No, you were not warning of possibility, you were warning of certainty.

You're uber bull now with all your bearishness compared to bullshit you were talking in June/July.

I agree about being careful and protecting new wealth that is created but that's about all I agree with you after all crap you posted here last summer.

[seleme]

Maybe, otherwise trolling is always good excuse to use if you are wrong on something.

Now I look as idiot after you deleted your previous post 

[vokain]

coming from the guy who spent all everyday day 'warning' everyone here "no more triple digits in 2013" as a forum moderator.
so at least I know where your neutrality stands.
I would only agree that today you are more pragmatic.

and honestly the least anyone here on this website who first owned Bitcoins in 2011 could do is make a fortune, relativity aside.

I'm sorry if people took me seriously, it was fun for me, and I like triple digit Bitcoins. It was my way of managing expectations, and I wanted to point to the possibility of this. If you care to know, I've never shorted it and I still don't. Maybe I will reconsider that stance in quintuple digits.

The question nowadays is keeping the fortune, that is where the skill is involved. No risk management and soon it can be poof.

i was annoyed more than once to be honest, guess you got me
You do speak the truth about risk management, and we are still due to break below the trendline according to Risto's regression

I have a question: how do you tell if a data set is exponential or something higher such as e^x^y

[seleme]

I'm always amazed at how much butthurt can be produced just by reading someone's forum posts.

Blit's actions in summer pissed me more than anything I've been reading on this forum as I strongly believe the man who was talking shit about Bitcoin should never be a moderator on Bitcoin forum though he is doing his job pretty well beside that.

Now he says he was trolling but whatever, moderator here should not act like that.

[CoolStoryBro]

I really wonder how all that transaction mechanics works on the stocks for BTC, in terms of real money availability on stocks' balance.

According to this site current "bictoin capitalization" is around 11,2 billion $
http://www.coinometrics.com/bitcoin/bmix
and current amount of btc existing is 12,2 millions

But we understand, that "capitalization" is oversimplified model, basically calculated as
[current value per bitcoin ($/btc) multiplied by the number of bitcoins in circulation]

It's nice to think in terms of "that huge amount of money" but it's just the stock, and price is fully depends on the supply/demand, as example

On 5th of december, selling ~200 000 bitcoins (2% of total)  on btc-e caused price drop from 1068 to 556  in 3 days (by 50%).
We might add there other stocks, as ~175k  for bitstamp and ~200k on gox, it's still aboout 5,5% of all volume.

That's how fast wealth disappearing.



Now, the most interesting question for me - is how much money was invested into btc by now? It's certainly not 11,2 billions, nor it's 5 billions. Sum must be way, way less.

Most of these sums must be stored on main stocks (btistamp, gox, btc-e, okcoin/huobi?), who performed transaction operations. //assuming, that people not cashed out to fiat//

And in the end, that sum will determine how much btc you can sell, without going price to zero. Because if one (or several guys) wants to liquidate his BTC holdings, if sum will be big enough, there just wouldn't be enough demand ($) in stock balance to buy even at low levels (and deposit takes several hours), and that will crash price to zero.

Having approximate amount of all cash invested to btc, which are in stocks now, might allow us to predict how much % btc will be required to completely crash the market.

Sure we can't predict how much support (buying power) will be waiting on $100 mark, but in the end, it's all about current cash  on stock balance - if potential buyer don't have much cash his order will be filled up and price will drops further.

If we have some figures about stock balance funds, we can create approximation scenarios (like 1kk btc to be bought at $100 before cash ends and drops further, etc).

Is there any way to obtain something like that?
I mean all stocks are legal organisations and must provide some finance reports to the govt (and at least partly these reports are open to public).

P.S. in before "who the hell will liquidate all his holdings at one day" stuff - scenario might happen if several major holders (up to I dunno, 1kk BTC?) will liquidate their positions at once for whatever reasons.

[HairyMaclairy]

Just look at the order book of any exchange. 

[CoolStoryBro]

This is perhaps a bit of a wild theory, but as a bear, I do not trust right now to be a good time to be short Bitcoin, but a bear I have to remain because my gut tells me that I have got to be at this point in time in addition to my Tech Analysis 101 skills adding weight to the bearish case by the day, especially the break down from the 3 week long descending triangle a few days ago.

I am not just bearish, I sense that there is going to be a slaughter. I am musing over the idea of Bitcoin taking a ostensible bullish leap forward before the bloodbath, simply because this would be the absolutely most brutal scenario that could possibly play out, and the Bitcoin world is a ruthless cut-throat shark infested world.

Why would you think that one would want to liquidate all at once? Just wondering.
It wouldn't be wise, comparing to dump in a slow manner (or portions).

It's little bit contradicts with my previous post, but previous is more of a theory.

Just look at the order book of any exchange.  

That not helps, cause it's not accounting for orders not in the book, and real "walls" might be way, way bigger (I assume biggest players using trading bots).

btw it's also would be nice to understand what amount of btc each stock is holding (assuming some of them do provide shorting btc with leverage).