rpietila Wall Observer - the Quality TA Thread ;)

[Syke]

If necessary SWAT teams show up at physical locations where the bulk of the ASICs are since for example one miner has 10% of network hash rate all in one location in East Washington.

Why do you keep making up "facts"? MegaBigPower would be the mine in East Washington, and they're running about 1 PH. that is under 2% of the network.

[AnonyMint]

If necessary SWAT teams show up at physical locations where the bulk of the ASICs are since for example one miner has 10% of network hash rate all in one location in East Washington.

Why do you keep making up "facts"? MegaBigPower would be the mine in East Washington, and they're running about 1 PH. that is under 2% of the network.

I saw a TV documentary and it said 7% (I remember that well) and they said they hoped to reach 10% very soon. I saw the racks and racks of ASICs in a huge cooled warehouse-like facility and he was adding more continuously. I don't remember the name. They said they were keeping the exact location secret. The title was something like "The man who owns 10% of Bitcoin".

Found it:

http://arstechnica.com/information-technology/2014/03/meet-the-manic-miner-who-wants-to-mint-10-of-all-new-bitcoins/

"2.2 petahash"

That was months ago. Surely it has increased since then. So you are the one who needs to get your "facts" straight before you attack.  

Hey does that look like a personal home computer mining operation to you much?  

You don't see a qualitative difference in centralization much.  

Any more dicks who need me to change their tampon?

BitChick: No offense intended. Males need to find their leader, it is simply way the hierarchy of males functions (as much as I wish it wasn't so).

[jmw74]

I love these boastful, overconfident people who think they know computer science better than me (which I have been doing for 30 years on and off).

Oh, I think we have a winner in the e-peen contest.  30 years, that is impressive.  That makes me, a computer science educated programmer with 20 years experience, feel inadequate. 

I'm sure you will want to see my credentials, which university I attended, which companies I worked for, and my github account, so that you can find some tiny detail to mock? 

Or will that suffice so that you can stop arguing from authority?

[rpietila]

Quick TA update:
- 6H candle color/volume: one green with high volume, awaiting for more which confirms the bottom of March 31, conclusion: hopeful
- Bid/ask strengh at market: slippage to sell 5k: $32, slippage to buy: $98, conclusion: explosive upside potential
- Trendline comparison: we are now at -0.291 log units. The trendline is at $932 and rising $7 per day, conclusion: rock bottom
- Sentiment: last week was quite extreme in fear, fud and bearishness, conclusion: supports that the bottom is behind us, deceitful
- Prognosis: intact from yesterday

Quick TA update:
- 6H candle color/volume: one huge red has nullified the positive effect of previous green (what a heck), conclusion: can go either way, esp. down
- Bid/ask strengh at market: slippage to sell 5k: $38, slippage to buy: $58, conclusion: selling pressure has built up
- Trendline comparison: we are now at -0.328 log units. The trendline is at $932 and rising $7 per day, conclusion: rock bottom
- Sentiment: unchanged, conclusion: unchanged
- Prognosis: 400 is the critical level, if it holds, upside is sure - if it falls, there may be a flash crash to lower levels

[cosmofly]

Quick TA update:
- 6H candle color/volume: one green with high volume, awaiting for more which confirms the bottom of March 31, conclusion: hopeful
- Bid/ask strengh at market: slippage to sell 5k: $32, slippage to buy: $98, conclusion: explosive upside potential
- Trendline comparison: we are now at -0.291 log units. The trendline is at $932 and rising $7 per day, conclusion: rock bottom
- Sentiment: last week was quite extreme in fear, fud and bearishness, conclusion: supports that the bottom is behind us, deceitful
- Prognosis: intact from yesterday

Quick TA update:
- 6H candle color/volume: one huge red has nullified the positive effect of previous green (what a heck), conclusion: can go either way, esp. down
- Bid/ask strengh at market: slippage to sell 5k: $38, slippage to buy: $58, conclusion: selling pressure has built up
- Trendline comparison: we are now at -0.328 log units. The trendline is at $932 and rising $7 per day, conclusion: rock bottom
- Sentiment: unchanged, conclusion: unchanged
- Prognosis: 400 is the critical level, if it holds, upside is sure - if it falls, there may be a flash crash to lower levels

awesome rpietila, much respect. I said the same thing in relation to your prognosis days ago in my Cosmopolis thread, but was only laughed at by trolls

There is about $5 Million between $400 and $200 (approx) they could be pulled out and the price is allowed to plunge/flash crash

[Pruden]

My take on the matter: I think Chinese blockade is mostly priced in. While, by reading this forum, you might feel like it's only a stupid rumour, I believe the market is more competent at assesing news than a bunch of permabulls. Which ironically is bullish, because the more the bad news is priced in, the less downside there is.

Besides, it takes only so many exchanges closing channels before the news can be considered confirmed and the announcements are no longer followed by a flash crash.

On the upside, look at how the price just cannot help but going up whenever things are calm. [movie trailer]This summer... [/movie trailer]

[aminorex]

@ slipperyslope, peter r

do you think transaction volume is largely a lagging indicator?  

Measure it in an external reference, e.g. as USD.  Then it should be a leading indicator.

[aminorex]

The dominant economy is the reserve economy right now.  Speculation is small relative to reserve.  Transactional circulation is smaller still.  It is certainly useful to fraction the economy.   An aggregated model and the disaggregated transactional model should provide the same valuations, however.   It only the relative allocations to M vs. V which change.  Otherwise, arbitrage.

In fiat economies financials are included in GDP.  If you start factoring the model, you could discriminate some useful dynamics, but the quality of data will decline enormously, which is likely to lead to Lyapunov-compounding model error in any predictive derivate.

As Peter R's observation would infer, Fisher and Metcalfe both are best suited to describe relative value under distinct parametric conditions, as, e.g. at distinct times in history.   To properly model value relative to an external numeraire, it is necessary to link to the numeraire economy.  We do this by repricing PQ in, e.g. USD, but there are other ways to do it, which would be much more predictive.  Neither Fisher nor Metcalfe have any dependency on time.  They do not describe dynamics.  They are just constraints on the attractor domains of the price dynamics.

[AnonyMint]

Paraphrased:

...[who cares if I am not correct as long as I'm sure you are wrong even though I've never asked to know what you know]...

I need to think of a funny name for that phenomenon.

No one can predict what the government will rule. If Homelust ScrewUrity can create the TSA to let aspiring closet pedophiles put their hands down your kids' pants and jackoff in the viewing room to your wife's nude Infrared breasts, there is nothing they can't potentially do.

I wonder if people think we are living in normal or dangerous times. I guess many ignore the signs. Seems people are willing to ignore just about anything that conflicts with the succulent shrimp hanging in front of their face.

Myopiacumen?

Tunnelcision?

Statusquaaludes?

P.S. And exactly how many months have you spent studying hash functions. It is good you didn't first ask me what I know before blabbering about how you know everything there is to know about hash functions, because in this instance I wouldn't tell you. Sorry. Some things necessarily must be secret. I can share one already public open source inadequate effort. Search "tromp Cuckoo Cycle". That will get you started down the rabbit hole of adjusting your myopia.

[Syke]

If necessary SWAT teams show up at physical locations where the bulk of the ASICs are since for example one miner has 10% of network hash rate all in one location in East Washington.

Why do you keep making up "facts"? MegaBigPower would be the mine in East Washington, and they're running about 1 PH. that is under 2% of the network.

I saw a TV documentary and it said 7% (I remember that well) and they said they hoped to reach 10% very soon. I saw the racks and racks of ASICs in a huge cooled warehouse-like facility and he was adding more continuously. I don't remember the name. They said they were keeping the exact location secret. The title was something like "The man who owns 10% of Bitcoin".

Found it:

http://arstechnica.com/information-technology/2014/03/meet-the-manic-miner-who-wants-to-mint-10-of-all-new-bitcoins/

"2.2 petahash"

That was months ago. Surely it has increased since then. So you are the one who needs to get your "facts" straight before you attack.  

Guess I have to bitch slap you again. Read the damn title you posted.

Meet the manic miner who wants to mint 10% of all new bitcoins

I'm sure you can understand the meaning of the word "wants". Just because he "wants" it, doesn't make it true.

Global hashing power is estimated at about 39.5 petahash, putting Carlson's 2.2 petahash at about 5.6 percent of the world's total.

What was it you claimed? Let me see...

one miner has 10% of network hash rate all in one location in East Washington.

Absolutely wrong, and since you can't handle being corrected, it's pointless to continue arguing with you. Don't bother replying, you're now on /ignore.

[Trolololo]

Take a look at this fractal:

Nice graph Trolololo.

People often scoff at bold predictions (either bullish or bearish) but based on bitcoin's volatility numbers alone, we expect the price to either be much higher or much lower in a year or two.  

How could your scenario play out?  According to the Metcalfe model, a 100X growth in price would correspond with a 10X growth in adoption levels (from roughly 0.1-0.2% to 1-2%).  Could adoption grow this quickly?  

Many financial surveys point out that only 2 - 5% of people would be willing to buy bitcoins, suggesting that there is already more than 10X additional demand.  But then why aren't they buying?

I would argue that it is presently too difficult to both buy and secure one's coins.  This must change.

As we speak, at least 1,000 bitcoin ATMs are being deployed across the world and more will come later.  This is vital infrastructure to allow people to exchange cash for coins should a new bull run begin.    

Similarly, Second Market and the Winklevoss twins are pushing towards regulated bitcoin exchange products (ETFs).  These represent important services to allow people to confidently store their coins.  

In conclusion, if a new bull run begins as this infrastructure is falling into place, and if the ETFs arrive in the early/mid-porition of this bull run, then I think your scenario is entirely possible.  

It is interesting that the "super crash" in your graph would correspond to the adoption level (1 - 3%) of the "chasm" on the technology adoption curve.

Thanks, Peter.

I just put one chart upon the other in photoshop and it astonished me how well they fit.

How could adoption grow this quickly?
You have answered that question better than I could.

You also make me realize a very good point:
the supercrash of 2015 (100k to 3k) would correspond to the CHASM of bitcoin adoption (1-3%).
That correspondence increases the probability of the 2014 superbubble scenario, in my opinion.

[AlexGR]

After a bottom it goes up. We've seen this like.. 7 times now in Bitcoin's history. 99.95% don't own bitcoins. Hundreds of millions have now heard about them, mostly negative. It takes 12-24 months for them to buy. The first 1% of them is the next 500% of Bitcoin adoption, the ones who lift the price to $5,000 before leaves fall from the trees. If 5 million people invest $1,000 per person, they can buy 10 million bitcoins. That absorbs all the lonely Chinese and stolen coins, like many times before. There is nothing new in Bitcoin. Everything has happened before. It is a fractal. Before I even bought, it was explained to me.

Take a look at this fractal:



It compares
the bubbles of Oct2010 + Jan2011 + April-May2011
vs
the bubbles of Jan-Mar2013 + Nov2013 + May-Sept2014?

The top of the next bubble would peak around 100,000 USD/XBT at around end of September 2014 (6 months from now).


Edited: dates corrected (prebubbles were in 2010, not in 2011, and superbubble was in 2011, not in 2012)

You cannot have a 100k BTC right now or in a few months: 3600 coins produced per day x 100k each = 360mn USD per day just to buy the daily production. Not to mention all those who'll be dumping because they'll be rich from selling their 10 BTCs for 1 mn USD. Who is going to throw all these billions in the market?

For comparison purposes, daily mining of gold is at 7 tons per day (x40mn USD each = 280 mn USD per day to buy the daily production).

[Peter R]

Thanks, Peter.

I just put one chart upon the other in photoshop and it astonished me how well they fit.

How could adoption grow this quickly?
You have answered that question better than I could.

You also make me realize a very good point:
the supercrash of 2015 (100k to 3k) would correspond to the CHASM of bitcoin adoption (1-3%).
That correspondence increases the probability of the 2014 superbubble scenario, in my opinion.

Thanks again for your fractal chart.  Just to confirm: is the vertical scale stretched on the photoshopped version?  The growth spurt predicted in % for the "super bubble" is actually bigger than the growth spurt in 2011, correct?  Do you know what the scaling factor is?

In my opinion, for bitcoin to witness a "super bubble," we'd need ETFs trading on NASDAQ or NYSE and significant deployment of bitcoin ATMs around the world.  People must have he ability to buy big.  Therefore, I think the bubble would have to occur either after the ETFs are available, or, more likely, the bubble would start a month before the ETF is ready (due to pre-emptive buying by insiders).  Since I doubt we'll see ETFs until late 2014 or 2015, a huge ramp in price before the fall 2014 would surprise me (but I am not implying that the price will remain stable at $450 either). 

Witnessing a "super bubble" would be fascinating.  I expect the media would begin to talk about all the benefits of bitcoin that we've known all along, as well as trivialize its challenges.  It would be a 180 deg shift in sentiment.  Some of the people you know who have dismissed bitcoin up to this point would become users, while simultaneously maintaining the view that it makes sense now (Bitcoin 2.0) because it's been "cleaned up" or it's "matured" or some nonsense like that. 

And then it would crash harder than ever. 

NOTE TO READERS: this is not a prediction--just a thought experiment. 

[danielW]

After a bottom it goes up. We've seen this like.. 7 times now in Bitcoin's history. 99.95% don't own bitcoins. Hundreds of millions have now heard about them, mostly negative. It takes 12-24 months for them to buy. The first 1% of them is the next 500% of Bitcoin adoption, the ones who lift the price to $5,000 before leaves fall from the trees. If 5 million people invest $1,000 per person, they can buy 10 million bitcoins. That absorbs all the lonely Chinese and stolen coins, like many times before. There is nothing new in Bitcoin. Everything has happened before. It is a fractal. Before I even bought, it was explained to me.

Take a look at this fractal:



It compares
the bubbles of Oct2010 + Jan2011 + April-May2011
vs
the bubbles of Jan-Mar2013 + Nov2013 + May-Sept2014?

The top of the next bubble would peak around 100,000 USD/XBT at around end of September 2014 (6 months from now).


Edited: dates corrected (prebubbles were in 2010, not in 2011, and superbubble was in 2011, not in 2012)

You cannot have a 100k BTC right now or in a few months: 3600 coins produced per day x 100k each = 360mn USD per day just to buy the daily production. Not to mention all those who'll be dumping because they'll be rich from selling their 10 BTCs for 1 mn USD. Who is going to throw all these billions in the market?

For comparison purposes, daily mining of gold is at 7 tons per day (x40mn USD each = 280 mn USD per day to buy the daily production).

Gold is constant at that level. Bitcoin would stay up there for a few hours or days. Thats a key difference.

Not that I expect it to go up that much. The bubbles should be and have been getting less volatile.

Thats why I dont think we will not go much lower then we are right now. Going by the trend of previous bubbles, I expect the next ATH to be around $6000 and then stabilise around $4500, with low being at around $3000.

[thefunkybits]

oh boy....thoughts on what happens if this crosses over Rpietila? do you expect a prolonged downtrend?

[Peter R]

You cannot have a 100k BTC right now or in a few months: 3600 coins produced per day x 100k each = 360mn USD per day just to buy the daily production. Not to mention all those who'll be dumping because they'll be rich from selling their 10 BTCs for 1 mn USD. Who is going to throw all these billions in the market?

For comparison purposes, daily mining of gold is at 7 tons per day (x40mn USD each = 280 mn USD per day to buy the daily production).

I believe a super bubble within 6 - 18 months would be possible (let's say I give it a 20% chance of happening).  If ETFs are available, and if ATMs are widely deployed, think of the huge market we've suddenly opened up.  If it all comes together at the same time, then who knows...

I understand your point about daily mined coins, but that was true in 2011 too, was it not?  All those mined coins is part of the reason it would have to crash very hard after peaking.  

Think of the money that could be involved.  The total market capitalization of all publicly traded companies in the world was US$51.2 trillion in January 2007.  This doesn't include currency or bond markets either.  Take just 0.1% of 50 trillion and you still get $50 billion.  Pump $50 billion quickly into bitcoin, and you probably get 10X market-cap amplification (rather than Risto's assumed 3.2X equilibrium amplification).  This takes you to $500 billion market cap and 13 million coins, so $40,000 per BTC.   Yeah of course it crashes, but I think it is certainly possible to see $40,000 per BTC within the next 18 months.  

Again, this is not a prediction  Just a thought experiment.  

[bitcoinsrus]

You cannot have a 100k BTC right now or in a few months: 3600 coins produced per day x 100k each = 360mn USD per day just to buy the daily production. Not to mention all those who'll be dumping because they'll be rich from selling their 10 BTCs for 1 mn USD. Who is going to throw all these billions in the market?

For comparison purposes, daily mining of gold is at 7 tons per day (x40mn USD each = 280 mn USD per day to buy the daily production).

I believe a super bubble within 6 - 18 months would be possible (let's say I give it a 20% chance of happening).  If ETFs are available, and if ATMs are widely deployed, think of the huge market we've suddenly opened up.  If it all comes together at the same time, then who knows...

I understand your point about daily mined coins, but that was true in 2011 too, was it not?  All those mined coins is part of the reason it would have to crash very hard after peaking.  

Think of the money that could be involved.  The total market capitalization of all publicly traded companies in the world was US$51.2 trillion in January 2007.  This doesn't include currency or bond markets either.  Take just 0.1% of 50 trillion and you still get $50 billion.  Pump $50 billion quickly into bitcoin, and you probably get 10X market-cap amplification (rather than Risto's assumed 3.2X equilibrium amplification).  This takes you to $500 billion market cap and 13 million coins, so $40,000 per BTC.   Yeah of course it crashes, but I think it is certainly possible to see $40,000 per BTC within the next 18 months.  

Again, this is not a prediction  Just a thought experiment.  

[podyx]

oh boy....thoughts on what happens if this crosses over Rpietila? do you expect a prolonged downtrend?

It doesnt mean alot alone

[aminorex]

It doesnt mean alot alone

I'm sure some people will use it as a signal and sell.  Sad, but true.

[EuroTrash]

oh boy....thoughts on what happens if this crosses over Rpietila? do you expect a prolonged downtrend?

IMHO this bubble is almost twice as slow. So you need an MA/EMA almost twice as long.