rpietila Wall Observer - the Quality TA Thread ;)

[Tzupy]

The 500$ wall was partially eaten, partially pulled. Not let's see how deep it falls.
The last brick of the wall was 500 BTC buy. 120 were eaten, the rest pulled.
And now it's back. This is going to be fun to watch.

The replenishment of the 500$ wall got eaten and now there's a sell wall at 500$.

[porcupine87]

Hi rpietila. When you made you estimate of the bottom, did you factor in potential bad news such as exchanges all screwing up, protocol exploits, and government bans, or will it go lower now? Does it make a difference?

In December, when I made the estimate for $400 bottom in January-March time, I based it solely on trendline analysis. The trendline in turn, takes into account everything that happens in the infrastructure or anywhere else.

I do not think that it will go lower, ie. $300s on a permanent basis, but may very well dip there, or even $100, temporarily, just like BTCe already did.

Midterm I would be more than content if 500 was accepted as a fair price and volatility would calm down.

But what has the trendline of december to do with the future? When you go with your car, do you try to predict the the next curve based on your look into your driving mirror? I mean, what has the price of decemeber to do with the price on february?

Sorry, you might be right, but I can not understand it. The only possible chance that I see for your analyisis is, that there are a significant amount of trades who think like you. Otherwise it is just like predicting the pips of a dice... Based on the trendline I guess 1-3 pipes

[porcupine87]

Hi rpietila. When you made you estimate of the bottom, did you factor in potential bad news such as exchanges all screwing up, protocol exploits, and government bans, or will it go lower now? Does it make a difference?

In December, when I made the estimate for $400 bottom in January-March time, I based it solely on trendline analysis. The trendline in turn, takes into account everything that happens in the infrastructure or anywhere else.

I do not think that it will go lower, ie. $300s on a permanent basis, but may very well dip there, or even $100, temporarily, just like BTCe already did.

Midterm I would be more than content if 500 was accepted as a fair price and volatility would calm down.

But what has the trendline of december to do with the future? When you go with your car, do you try to predict the the next curve based on your look into your driving mirror? I mean, what has the price of decemeber to do with the price on february?

Sorry, you might be right, but I can not understand it. The only possible chance that I see for your analyisis is, that there are a significant amount of trades who think like you. Otherwise it is just like predicting the pips of a dice... Based on the trendline I guess 1-3 pipes

the trendline is the average price, bulls and bears fight over the average price. its a zero sum game, so the bulls and bears equate to no net change. the average represents the genuine and growing commercial demand, or the 'fair' price. I dont know why you cant see that is a legitimate edge.

I understand what the market price is, but I don't know, how it is based on the priced of last december. I mean, good news make the price go higher, bad news make the price go lower. So how are this news connected to the prices 6 weeks ago? Do Gox only have this problems and in this time, because there were some trend line in december?

[chessnut]

In December, when I made the estimate for $400 bottom in January-March time, I based it solely on trendline analysis. The
I understand what the market price is, but I don't know, how it is based on the priced of last december. I mean, good news make the price go higher, bad news make the price go lower. So how are this news connected to the prices 6 weeks ago? Do Gox only have this problems and in this time, because there were some trend line in december?
[/quote]

At this stage, good/bad news does not entail commercial demand/supply at all, only demand/supply to come because the infrastructure still needs to grow. all the swings are caused by the speculators, that must orbit around an average because it's a zero sum game.

[GreekGeek]

http://www.forbes.com/sites/leoking/2014/02/13/mt-gox-ceo-mark-karpeles-responds-to-widespread-bitcoin-criticism/

[rpietila]

What is The Trendline.

Basically it is a price that grows every month 23.5%, which means a double in every 99 days. If we are above the trendline price of that date, bitcoin is overvalued. Below it is undervalued. It is calculated from the average rate of growth over the past 5.1 years.

Currently we are right on the trendline, or a little bit below it. Bitcoin is not expensive any more, but past experience suggests that we go significantly below the trendline in the near future. This can happen in the following ways:
- Price drops.
- We stabilize around this level for such a long time (~3 months) that the trendline rises enough.

Of course trendline has no magical ability to forecast the price (and it also changes albeit little all the time). In the past it has been a reliable +EV tool to time entry and exit points in the very slow swing trade (a few trades per year).

[chessnut]

I wouldnt expect it to be very accurate, but I wouldnt be surprised if in a market of critical mass things grew at a scientific rate. I dont know what the formula is though.

the theoritical formula is simple: exponential growth
rats and rabbits theoretically follow the Fibonacci series

  
edit: read above for a more accurate explanation of the exponential growth

thanks - but in theory this cannot truly be exponential, perhaps more like an 'S' curve so they say. certainly exponential growth is a component.

[Pruden]

I understand exponential growth but who chose 10 as the exponent?

The best-fit exponential curve is +23.5%/month, which is x12.6/year. The base, not the exponent, would be 12.6.

"x10" is thus a round, conservative number.

[Carlton Banks]

thanks - but in theory this cannot truly be exponential, perhaps more like an 'S' curve so they say. certainly exponential growth is a component.

You are right , S-curve is the (very)long term trend

but keep in mind that the S-curve for a certain time window may grow faster than the exponential

As well as slower.

It's amusing to think that all the divergences from the trendline will appear like tiny sampling errors once the overall shape of the growth curve is established (an effect that's already evident when you look at the current long term linear price chart). And the extent to which the current trendline can be altered by these divergences signifies just how immature this market still is. It seems like the next 18 months may generate a turning point in this characteristic though, certainly if all the promised professional investment bodies actually become involved. We will see.

[Torque]

The problem with the trendline is that if you follow it indefinitely, then the conclusion is that eventually BTC will have infinite value. Which is obviously not true.

It also changes over time. Its easy to take historical data and draw a line on it, but that doesn't necessarily predict what the line will look like in future.

If growth was to carry on at the rate in the trendline, in under 10 years BTC would be worth more than everything else in the world put together. Its not very realistic

That's because it's not really exponential, it only looks exponential. The real shape is probably a bell, so after an unknown future ATH, bitcoin will enter
a bear market from which it will never recover. It will simply be replaced by something better. I hope it's not that buggy litecoin clone with a cute mascot.

If at that point bitcoin is serving both as a valid store of wealth and and as a stable currency, why would it be replaced?

[Tzupy]

So far, bitcoin has had little competition from other crypto-currencies. This may change in the future, considering that
now it's worth a lot of money to have a successful crypto. Apple may launch one, Google may launch one, both could have cute mascots.
Bitcoin is just the first and a good one, but not perfect. And against the marketing power of Apple or Google, bitcoin would eventually lose.

[Torque]

So far, bitcoin has had little competition from other crypto-currencies. This may change in the future, considering that
now it's worth a lot of money to have a successful crypto. Apple may launch one, Google may launch one, both could have cute mascots.
Bitcoin is just the first and a good one, but not perfect. And against the marketing power of Apple or Google, bitcoin would eventually lose.

Didn't answer my question, but ok.  Maybe your answer should have been "because if bitcoin no longer appreciates in value, it would in that case no longer be a speculative vehicle, so all the speculators would sell their bitcoins and leave (to another alt coin)."  But by the time bitcoin becomes THAT stable with very little gains (or loses), all the speculators would have already left.

[TheGhost]

So far, bitcoin has had little competition from other crypto-currencies. This may change in the future, considering that
now it's worth a lot of money to have a successful crypto. Apple may launch one, Google may launch one, both could have cute mascots.
Bitcoin is just the first and a good one, but not perfect. And against the marketing power of Apple or Google, bitcoin would eventually lose.

Agreed.

Take intel for example. They created a FREE open rendering system called Embree. Why for free? Well because they are in the business of selling CPU's, and the more people that use rendering software, the more CPU's they sell (especially if it takes advantage of all of intels hardware optimizations).

AMD and NVIDIA have certainly not ignored the sales spike AMD has had due to mining. It would be beneficial for them to start funding development and promoting into an alt coin, even if they don't own it, because it means more sales for their hardware. And you can certainly bet they will get a bigger team behind it than exists for bitcoin, because they have the money to do so (well... AMD is questionable).

[Tzupy]

That's the problem: if all speculators leave, then bitcoin would drop to it's real value, which is currently under 100$ IMO.
Speculators leaving is going to happen on a small scale in the coming months, like in the previous bear markets.

[darklight]

The problem with the trendline is that if you follow it indefinitely, then the conclusion is that eventually BTC will have infinite value. Which is obviously not true.

It also changes over time. Its easy to take historical data and draw a line on it, but that doesn't necessarily predict what the line will look like in future.

If growth was to carry on at the rate in the trendline, in under 10 years BTC would be worth more than everything else in the world put together. Its not very realistic

That's because it's not really exponential, it only looks exponential. The real shape is probably a bell, so after an unknown future ATH, bitcoin will enter
a bear market from which it will never recover. It will simply be replaced by something better. I hope it's not that buggy litecoin clone with a cute mascot.

Yeah totally agree. Its frustrating that many people seem to think the price can increase 10x per year forever, haven't done any basic maths to work out what that would mean, and then point at the past data as proof of their theory.

If anything the bell curve is already leveling out. The growth from Oct 2010 to mid 2011 was far steeper than anything after it

[seleme]

Wow guys, just wow.  I guess you guys believe that both a) bitcoin has no value unless it is a speculative vehicle, and b) it will get usurped by a supposedly better "Corpcoin".

Please do us all a favor, sell your BTC and go buy some Ripples, or Dodgecoins, or Maxcoins, whatever.

The smell of troll is suddenly high in this thread.  I'm out.

More of the posts you answered to closer we are to new rally

[ErisDiscordia]

If one goes to bitcoinwisdom and views the 3day chart one can observe how similar the pattern between February 2013 - June 2013 and October 2013 - February 2014 looks.

I have been observing this similarity for a while and the longer it goes on the more confident I feel in the probability of this continuing. This would mean that the time point corresponding to today would be the middle of June. The two lines on the chart (anyone care to enlighten my TA ignorant self what they are called and how they are calculated?) have just crossed and are diverging and a firm downtrend is established. If the pattern continues we can expect some more downward movement with a final capitulation around the price point of 400$ in about a month from now.

Needless to point out this is a pretty exact playing out of rpietilas predictions. Much impressed!

I am calling the bottom in 23 days from now! Because 23!

EDIT: I see I am not the only who had pretty much the same idea --> http://www.reddit.com/r/BitcoinMarkets/comments/1xuz9h/daily_discussion_friday_february_14_2014_early/cfevo8z

[merkin51]

I have to admit, having been an ignorant and uneducated bull since I joined this forum, I'm glad I started paying attention to both Rista but also MatTheCat (even if he was a bit annoying with his threads). I cashed out around $790 and so glad I did, it's pretty much playing out exactly as Rista said. I can't wait to buy back in, hopefully sub-$500, but I really hope that we start getting some good positive news about Bitcoin over the next few weeks.

[RAJSALLIN]

If one goes to bitcoinwisdom and views the 3day chart one can observe how similar the pattern between February 2013 - June 2013 and October 2013 - February 2014 looks.

I have been observing this similarity for a while and the longer it goes on the more confident I feel in the probability of this continuing. This would mean that the time point corresponding to today would be the middle of June. The two lines on the chart (anyone care to enlighten my TA ignorant self what they are called and how they are calculated?) have just crossed and are diverging and a firm downtrend is established. If the pattern continues we can expect some more downward movement with a final capitulation around the price point of 400$ in about a month from now.

Needless to point out this is a pretty exact playing out of rpietilas predictions. Much impressed!

I am calling the bottom in 23 days from now! Because 23!

EDIT: I see I am not the only who had pretty much the same idea --> http://www.reddit.com/r/BitcoinMarkets/comments/1xuz9h/daily_discussion_friday_february_14_2014_early/cfevo8z

There isn't any thing that says it has to play out exactly the same way. I'd actually say it usually never does. I think the bottom is coming much sooner, in fact my guess before the weekend is over. Another interesting point is Gox has seen a low of $302. If Gox does in fact recover from it's mess (not ready to give any kind of odds on that) the current low on Gox will correspond to a newer low and will be sufficient going forward imo.

Edit: the flash low on btc-e not included.

[rpietila]

I think it is going as planned. We will need to spend some time in these levels so that nobody believes that it will go to 800 again in the immediate future.

Unless people believe that it is good to sell the coins for 400, they will not do it Also the buyers need to be tamed to not buy the flashcrashes. Time is an answer to these issues.

Be wary for Bitstamp price. It is much higher than the other functioning exchanges now. If Gox finds all the bitcoins and withdrawals are resumed, they will be sold in other exchanges (bitstamp being the only one with fiat withdraw option) with massive damage to bitcoin price.


ADD: If anyone thought that Bitstamp is somehow Slovenian, the following excerpt from open orders shatters the belief:

Sell   Feb. 14, 2014, noon   30.00000000   $648.20   $19,446.00   Open

It is impossible to think that anyone else but the British would have specifically coded their software to show "noon" for 12:00 GMT.

Probably there's also "midnight", try it out