rpietila Wall Observer - the Quality TA Thread ;)

[aminorex]

All I've heard is naive theory of a lone man doing this, covering all his tracks like a covert agent yet not being one. A brilliant lone cryptography researcher whom no one ever heard of, never published anything before, who managed to obfuscate his activity from all his family and friends.

Nick Szabo and/or Hal Finney is the most credible theory outside of deep state theories.  I have heard some pretty outrageous dark horses mooted, like Perelman, which I generally discount out of hand, but there's a pretty strong stylometric case for Szabo+Finney.

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[AnonyMint]

All I've heard is naive theory of a lone man doing this, covering all his tracks like a covert agent yet not being one. A brilliant lone cryptography researcher whom no one ever heard of, never published anything before, who managed to obfuscate his activity from all his family and friends.

Nick Szabo and/or Hal Finney is the most credible theory outside of deep state theories.  I have heard some pretty outrageous dark horses mooted, like Perelman, which I generally discount out of hand, but there's a pretty strong stylometric case for Szabo+Finney.

Those two guys were closest technologically (of well known public cryptographers) and Finney was first miner.

But it doesn't fit the personalty of Finney who is very chatty and loves humanity. He even wrote layman explanations of Chaum research papers, so he cares about the common man.

I don't know about Szabo. He was pitching "cypto bit gold" I believe in 2005? Why would he suddenly stop being public and go underground? In that case, do we know who he really works for any way.

Any way, this is going way off topic of the thread. All that matters is what is actually happening with Bitcoin.

We can see the Bitcoin results empirically.  Centralization is no longer a theoretic outcome. And merchants taking BTC as a facade for fiat is growing faster than adoption.

And this impacts the valuation of Bitcoin.

I wish someone would do a regression analysis fit on the data so we can confirm empirically that rate of adoption (not nominal adoption size) is slowing. And hopefully be more precise.

[aminorex]

It doesnt mean alot alone

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

Best ignore all those pesky TA signals...after all its not like we're in the quality TA thread...no, wait

Seriously, ( <------ and not dour)
We've not had a true bear market since 2012, it was always going to happen.
Breathing space to improve and consolidate infrastructure, get BTC out of beta
And most importantly, realign people's expectations.

I like my TA with a dose of empiricism or at least plausible structural theory.  The *only* justification for treating the cross-over on bitcoinwisdom as a signal, as opposed to any other pair of moving averages, is the mere fact that it is the default on the 1 week chart on bitcoinwisdom.  Well, I'm sorry, but that's not a rational basis for a trading strategy.  We should ask the proprietor to randomly perturb the default periods on the moving averages.

It's sad because people will trade on such a pathetic excuse for a rationalization, thinking it is driven by some deep and compelling model, when in fact they are just hanging their emotions on a scary picture.  It's sad because most of them will lose bitcoin as a result (perhaps not as a result of selling at that specific time, but almost certainly as a result of selling low and buying high), contributing to the concentration of wealth in the hands of a few skilled but, in all too many cases, sociopathic persons.

[AnonyMint]

...contributing to the concentration of wealth in the hands of a few skilled but, in all too many cases, sociopathic persons.

And this is one reason why I think we need and will get cpu-only mining with perpetual debasement, so we are constantly redistributing back to the individual entrepreneurs. This will make it much less profitable for server farms, because the masses will mine at a near-term loss and not even know it.

[tabnloz]

There is no "game over" for Bitcoin. Just as the adoption won't accelerate the current acceleration, it also won't decelerate the current acceleration. Compounded growth is acceleration of nominal, even when the rate of compounding is declining. Humans are very fooled by this.

We are merely finding an equilibrium where the reality is, not where Risto et al's linear fit to a non-linear curve tricked everyone into  thinking the equilibrium was. Risto is still believing his own Koolaid. Fantastical dreams diehard.

what in your opinion happens to those big farms if the price hits -$200?

Blockchain fork would appear to be the dominating strategy.

What do you mean? Who would that help? That would just hurt everyone.

If the government regulates the mining to take over, the price will not go down and there won't be any mass exodus nor fork, it will go up. And the masses will pour in. That comes later when it is time for that stage in Bitcoin's natural adoption nexus.

Bitcoin was carefully designed for this outcome by some very astute strategists. Appears to be the work of a black budget think tank.

Note my prior post I provided a link to Catherine Austin Fitts audio interview wherein she describes the $4 trillion black budget of the USA. It is incredulous but true. Secretary of Defense Rumsfield confirmed $2.3 trillion of it the day before 9/11 and then all the records were destroyed by the missleairplane that hit the Pentagon the next day. Armstrong has also written about this and has inside knowledge. Just last week, a smoking gun book was published by Jim Rickards (former covert agent) who was in the room with the government and also corroborated by Max Keiser's first hand conversions with Cantor Fitzgerald admitting that government was aware of the short options on two airlines before 9/11.

Do you have a source to say that Rickards is a former covert agent?

[thefunkybits]

Do you have a source to say that Rickards is a former covert agent?

Who cares, we should all stop quoting this fool (Anonymint)

[donut]

Hey guys, I'm not fluent enough with charting, but could someone please calculate Bitcoin price average percent growth per year?

Also of interest is average doubling time.

[AnonyMint]

Do you have a source to say that Rickards is a former covert agent?

Who cares, we should all stop quoting this fool (Anonymint)

I have read that numerous times. I will go dig up the link about that recent relevation where Max Keiser says Rickards was. Come back to read this post again...

thefunkybits, what proof do you have that I am a fool? Accusations without evidence is for the foolish. As if not quoting me would change any reality. Are you really that consumed by the power of politics. Actual reality is dictated by the economics of technology. Period.

Edit: https://bitcointalk.org/index.php?topic=543076.0

http://en.wikipedia.org/wiki/James_G._Rickards#Biography

Appears his insider position comes from being a legal advisor to the intelligence community and DoD.

I am very confident because I have history and rationality on my side.

I would be cautious of normalcy bias.  We are dealing with iterated expansive maps.   Such systems can diverge rapidly.

Agreed there can be in rarer cases a divergence to chaos which means disintegration of the inertial frame (structure), e.g. a disruptive technology from a competitor.

I know of no cases where an inertia produced its own disruption to (re-)accelerate its own (de-)acceleration. The disruption may be seeded by the inertia, but that actual inertia is by mathematical definition of its structure incapable of looking outside of itself.

Feel free to correct me with examples.

It's a new technology and will introduce novel system dynamics.  Very few external analysts foresaw the collapse of the Soviet Union.

Your example appears to support my point above.

There is strong self-similarity in the price curve.  The manias seen so far may be higher order.

And how often do very large scale movements (e.g. Communism, adoption of modern central banking, adoption of Paypal or Facehookhole) have these bizarro higher order components? Any historical fact checking?

Appears to me on cursory interaction so far that you are based solely in math (and very good at it), but perhaps your weakness is you don't take the time to go tie into historical significance. Thus you could be flying in too many directions without a compass.

This is where Armstrong is a genius. He has some of your math ability and he put $100 millions of historical data into a model and he regularly talks with key insiders all over the world in every country.

I am limited by my resources and specialized area of experience (mostly programming), so I have to leverage him and others (e.g. Peter R's recent Metcalf fit) for data and initial insights, then I refine with my domain knowledge.

If your log-logistic model is a MAP estimation, I would say it has strong empirical and analytic support, which would push the fractal fit (already quite unlikely, according to my own understanding, but still a possible expression of a distinctly conceivable set of dynamics) outside of the range of interesting possibilities.  But if log-logistic fit doesn't have a principled justification, with definable likelihoods (and I haven't seen that yet) then I would not exclude cascade models which typically produce such curves in other markets.

I don't know what a cascade model is? Care to summarize the significance or am I left to my own googling?
 

You say that declining rates of adoption reversing would be unprecedented.  I say, how long have you been looking for them?  And, how many deviations lie between the current rate and the rate which would be implied by the fractal chart?   The history of AAPL comes to mind as a case of the former.  Regarding the latter, if it is within a couple of deviations, then it would not be surprising if the decline in growth were noise.  (And the more so, in a heteroskedastic model.)

I agree I would really appreciate if someone did some empirical analysis of the data from this perspective. This is not my area of usual work, so I should stay focused on what I do best (which isn't talking in forums, but seems to have consumed me of late   ).

[BBmodBB]

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

It doesn't make me feel much better that we have crossed below the 300 EMA for 3 days now and it has acted like resistance twice in that timeframe. This is the first time this has happened since 2011 (maybe early 2012),

ass clowns like Rpietila are one of the main reasons we are droppin' like a rock! =\ imho

[windjc]

it maybe that a sub $200 price is where it will settle, naturally resolving the massive misallocation of resources represented by a 2.2 peta hash facilities etc

could be a blessing in disguise for decentralized mining

It would be the end of bitcoin. Sort of like Internet startups in 2001.

If we go below $200, bitcoin would slide to sub $50 and never recover.  Game over.

So if we "drop" to 4x higher than we were just over a year ago, its game over? Hmmm. Ok.

The cost of mining is different.  The effect on mining operations will be devastating.  Less miners, smaller, less reliable network...
Just like any other crypto.  So, game over.

That's ridiculous, lol.  Yes, some miners would lose money. Mayeb some big shops would close down. Meanwhile others would join with less hash rate. Miners will only leave to the extent of the price drop. Good grief.

[aminorex]

I don't know what a cascade model is? Care to summarize the significance or am I left to my own googling?

Informal language referring to self-organized criticality, as e.g. the Gutenberg-Richter law.  The seminal reference is Bak,Tang,Wiesenfeld (1987).

[rpietila]

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).

There is really much gold already in this world, and it is useless. Still not only your mentioned daily production is constantly bought by the market, the entire gold stock is leveraged by perhaps 10x-100x by financial actors, to make it accessible to investors. With gold they can do it (unbacked paper leverage), because people are not accustomed to storing physical gold.

With Bitcoin, the exchange ecosystem is now so in shambles that not many trust to store their coins there. The only other option is that they want them in personal possession, which withdraws them from any possible fraudster's fractional reserve.

World's paper wealth is astounding, measured in $100s of trillions. Recently, in one tax haven alone, there was bank accounts worth $32,000 billion. Consider the math.

To raise Bitcoin's price to $100k, the marketcap would have to rise to $1,300 billion. This would mean about $130 billion new investment. Of course that is a lot of money, but that is <1% of what was stored in that one bank. Also Bitcoin could find its way to bigger players, even FX reserves.

It is entirely possible for Bitcoin's price to hit $100k in 6 months there is absolutely no question about it.

Probable? No. Not yet. And if you want to bet for the outcome, all you need to do is to buy at $420 and pocket 238x gains after 6 months. The probability for this scenario is certainly higher than that, given that Bitcoin already exhibited similar behaviour only 2 bubbles ago. (33% probability for a superbubble right now is too much imo, but I would give 15-20% if asked). In EV terms, wildly profitable anyway.

I am still "mopping up excess liquidity" from bitcoin markets. So if you want to sell at a slight discount to the exchanges, contact me. I have not bought anything, which is a good indication that the selling pressure comes not from the economically informed 

[keystroke]

Can you tell us some other sources to introduce us to your style of analysis? I'm not familiar with many of the terms you use but am guessing they are some form of systems or chaos theory.

Edit : for aminorex. Sorry for brevity, posting from a phone on EVDO from Ketala.

[cAPSLOCK]

It is entirely possible for Bitcoin's price to hit $100k in 6 months there is absolutely no question about it.

Probable? No. Not yet. And if you want to bet for the outcome, all you need to do is to buy at $420 and pocket 238x gains after 6 months. The probability for this scenario is certainly higher than that, given that Bitcoin already exhibited similar behaviour only 2 bubbles ago. (33% probability for a superbubble right now is too much imo, but I would give 15-20% if asked). In EV terms, wildly profitable anyway.

I am still "mopping up excess liquidity" from bitcoin markets. So if you want to sell at a slight discount to the exchanges, contact me. I have not bought anything, which is a good indication that the selling pressure comes not from the economically informed 

Those puts we talked about are starting to look good again.

I hope you're right about the price.  There are a confluence of unique thresholds around $400...

[rpietila]

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

The scenario thinking is funny in the sense that sometimes the outcome universe is polarized. For example a coin toss rarely gives any other result except heads or tails. When it starts falling towards one of these, it ends up that side up with a high probability. The probability for NOT(heads OR tails) is practically zero.

What we know with high confidence is that Bitcoin bubbles form such that more interest raises price raises hashpower raises confidence raises media raises net worth of leading bitcoiners raises infrastructure investments raises usability raises userbase raises price etc.

What we don't yet know is whether there is a functioning downward trend scenario actually available, or whether it is more of bears' imagination. In short term, anything can happen. But there is no evidence yet that a downtrend could last for 6 months, the longest one we've had was 5 months in 2011 and now we are 4 months into a downtrend.

With financial assets, the efficient market theory dictates that price should be the discounted expected value of future earnings (well not directly applicable to money but you get the idea). Currently the price is set in exchanges that may not function at all honestly. In the extreme case, everything they produce for you to see, userbases, reserves, orderbook, orders, volumes, prices, were a total lie. And one such big exchange just closed down taking a million customer coins with it. In this kind of environment, you cannot trust absolutely anything. If you need to trade blind, then the only way to trade profitably is to buy low and sell high, and not even try any momentum / TA stuff.

In a sense I await for the breakdown from 400, because it is either a complete fabricated lie, in which case I buy more and thank cordially for the opportunity. Or it is the selling pressure from U.S. and China rulings culminating in a rout, in which case I buy because it is short term. Or it is a panic reaction, followed by leveraged long liquidation, in which case I buy because there is no downside. Or if it is a long slide downwards, in which case I buy because I would not be here if I had not bought after the downtrend in 2011.

I could go on by assuming a certain low price for Bitcoin and then calculating the economic parameters such as how much new investment is needed to support miner sales etc. But don't have time here

Despite what AnonyMint says, I fully acknowledge the possibility that we see a flashdip to $200. What I don't believe is that you can habitually buy bitcoins for $200. The sellers that would supply such bitcoins are soon relieved of their bitcoins. I know the mind of whales, being one myself. I also know the number of coins the small holders have, because that is my main economic research interest for the last half a year.

TL; DR: All things considered, I don't see Bitcoin is structured to allow a downtrend, and stick to my earlier forecast that the turmoil is over by mid-April and we close the month at 500 minimum.

[Bitcoin_is_here_to_stay]

I am still "mopping up excess liquidity" from bitcoin markets. So if you want to sell at a slight discount to the exchanges, contact me.

I understand you want to buy as cheap as possible - but why anyone would sell you btc below market prices?

[creekbore]

I like my TA with a dose of empiricism or at least plausible structural theory.  The *only* justification for treating the cross-over on bitcoinwisdom as a signal, as opposed to any other pair of moving averages, is the mere fact that it is the default on the 1 week chart on bitcoinwisdom.  Well, I'm sorry, but that's not a rational basis for a trading strategy.  We should ask the proprietor to randomly perturb the default periods on the moving averages.

What should we set the EMA to?
Sunny?
Optimistic?

How can it be unempirical.  It is two settings to judge a period.
Fine, change the settings until it draws a story that fits your point of view.  Highly scientific.

Those default settings do a good job describing the times we have had a bearish market, so when they cross its probable that's where we'll be again.

IRCC, for Risto, the 4 hour EMA is one of his significant buy/sell signals (I recall him saying something along the lines of "follow this and you should be rich")...but he's misguided too?

It's sad because people will trade on such a pathetic excuse for a rationalization, thinking it is driven by some deep and compelling model, when in fact they are just hanging their emotions on a scary picture.  It's sad because most of them will lose bitcoin as a result (perhaps not as a result of selling at that specific time, but almost certainly as a result of selling low and buying high), contributing to the concentration of wealth in the hands of a few skilled but, in all too many cases, sociopathic persons.

Yes, it's really sad that people use the tools at their disposable to inform their decision making.  

As for scary pictures.  I notice there's a lot of pictures used here to describe bright, cheery scenarios, which could be as equally baseless.

Pretty much every indicator that shows we are having a bad time you dismiss --- each that predicts optimism you embrace: this seems highly unscientific.

But hey, I need strong medication

[rpietila]

I am still "mopping up excess liquidity" from bitcoin markets. So if you want to sell at a slight discount to the exchanges, contact me.

I understand you want to buy as cheap as possible - but why anyone would sell you btc below market prices?

I think that should be obvious. Exchanges are a bunch of crooks who steal both your USD and BTC, and as a bonus your identity. Small amounts I can instapay -7%, larger amounts up to BTC1,000: -5%.

[rpietila]

As for scary pictures.  I notice there's a lot of pictures used here to describe bright, cheery scenarios, which could be as equally baseless.

Pretty much every indicator that shows we are having a bad time you dismiss --- each that predicts optimism you embrace: this seems highly unscientific.

My judgement on the fundamentals and potential of Bitcoin is completely unchanged from 2013.

[liexel]

hi, i just have one question. i dont mind the mid term bleeding etc.. sorry to be asking the obvious whats its like for the long term, > 1 year, is it going to recover? i just need to know that i can keep holding.