rpietila Wall Observer - the Quality TA Thread ;)

[ErisDiscordia]

Quick TA update:
- 6H candle color/volume: BREAKING - huge green candle beats the previous reds AND action afterwards is very promising, conclusion: probability of recent reversal further increased
- Bid/ask strengh at market (Bitstamp): slippage to sell 5k: $84, slippage to buy: $143, conclusion: potential for extreme volatility
- Trendline comparison: we are now at -0.341 log units. The trendline is at $1,015 and rising $7 per day, conclusion: rock bottom (note: it is not necessary that 'rock bottom' will change until the parabolic uptrend starts, because the trendline is itself rising)
- Sentiment: short covering/panic buys are starting
- Prognosis: getting better; probability for going <400 gets smaller by the day, long-term buy zone

I just want to say thank you for these updates - I find them insightful and entertaining.

[runam0k]

I just want to say thank you for these updates - I find them insightful and entertaining.

Certainly entertaining.

[MahaRamana]

I just want to say thank you for these updates - I find them insightful and entertaining.

Certainly entertaining.

Yes, these updates are very good. To the point and free from emotional noise.

When are we reaching +8 USD per day climbing slope ?

[keithers]

Have not seen any major news to push last night/this morning surge in prices. Any ideas?

[SlipperySlope]

Have not seen any major news to push last night/this morning surge in prices. Any ideas?

Bitcoin Rallies Over 10 Percent, OKCoin to Launch ATM

In China related news, exchange OKCoin announced that they’re working on a bitcoin ATM. One of the main features of the machines will be complete trading, the ATM can act as a bitcoin trading platform on itself. The notice goes on to say that the bitcoin market is not very large and is more concentrated in some areas, thus the overall demand for ATM machines is still very small and volume on online trading facilities is far greater than offline transactions. The rollout of the ATMs should help shift the balance somewhat.

Along with this, OKCoin officially launched the recharge code (voucher) scheme. The move is aimed at circumventing PBOC’s bank deposit ban. It remains to be seen how the People’s Bank of China will react to the latest evasion moves by Chinese bitcoin exchanges.

[keithers]

Have not seen any major news to push last night/this morning surge in prices. Any ideas?

Bitcoin Rallies Over 10 Percent, OKCoin to Launch ATM

In China related news, exchange OKCoin announced that they’re working on a bitcoin ATM. One of the main features of the machines will be complete trading, the ATM can act as a bitcoin trading platform on itself. The notice goes on to say that the bitcoin market is not very large and is more concentrated in some areas, thus the overall demand for ATM machines is still very small and volume on online trading facilities is far greater than offline transactions. The rollout of the ATMs should help shift the balance somewhat.

Along with this, OKCoin officially launched the recharge code (voucher) scheme. The move is aimed at circumventing PBOC’s bank deposit ban. It remains to be seen how the People’s Bank of China will react to the latest evasion moves by Chinese bitcoin exchanges.

Re-charge code and an ATM, responsible for worldwide rally? Think thats possible?

[SlipperySlope]

Have not seen any major news to push last night/this morning surge in prices. Any ideas?

Bitcoin Rallies Over 10 Percent, OKCoin to Launch ATM

In China related news, exchange OKCoin announced that they’re working on a bitcoin ATM. One of the main features of the machines will be complete trading, the ATM can act as a bitcoin trading platform on itself. The notice goes on to say that the bitcoin market is not very large and is more concentrated in some areas, thus the overall demand for ATM machines is still very small and volume on online trading facilities is far greater than offline transactions. The rollout of the ATMs should help shift the balance somewhat.

Along with this, OKCoin officially launched the recharge code (voucher) scheme. The move is aimed at circumventing PBOC’s bank deposit ban. It remains to be seen how the People’s Bank of China will react to the latest evasion moves by Chinese bitcoin exchanges.

Re-charge code and an ATM, responsible for worldwide rally? Think thats possible?

According to trendlines published here and elsewhere, the recent bitcoin price was so far beneath the trend that simply the absence of bad news was probably enough for a short-covering rally.

[BitChick]

Have not seen any major news to push last night/this morning surge in prices. Any ideas?

Bitcoin Rallies Over 10 Percent, OKCoin to Launch ATM

In China related news, exchange OKCoin announced that they’re working on a bitcoin ATM. One of the main features of the machines will be complete trading, the ATM can act as a bitcoin trading platform on itself. The notice goes on to say that the bitcoin market is not very large and is more concentrated in some areas, thus the overall demand for ATM machines is still very small and volume on online trading facilities is far greater than offline transactions. The rollout of the ATMs should help shift the balance somewhat.

Along with this, OKCoin officially launched the recharge code (voucher) scheme. The move is aimed at circumventing PBOC’s bank deposit ban. It remains to be seen how the People’s Bank of China will react to the latest evasion moves by Chinese bitcoin exchanges.

Re-charge code and an ATM, responsible for worldwide rally? Think thats possible?

Or it could be people buying back before April 15th knowing that the supposed "China ban" was nothing more than a bunch of FUD being spread?  

[Undone]

Or it could be people buying back before April 15th knowing that the supposed "China ban" was nothing more than a bunch of FUD being spread?  

It seems like that's more or less spot on.

Despite the status either way of "The Ban," it feels like the community is starting to finally and slowly become more immune to the word "China," just in the same way it started to become more immune to the word "Gox" before Gox was completely shut down.

Could be a psychological turning point, really. Not saying it definitely is such a turning point - but it could be.

[CookieFactory]

dat 468 test

[keithers]

Have not seen any major news to push last night/this morning surge in prices. Any ideas?

Bitcoin Rallies Over 10 Percent, OKCoin to Launch ATM

In China related news, exchange OKCoin announced that they’re working on a bitcoin ATM. One of the main features of the machines will be complete trading, the ATM can act as a bitcoin trading platform on itself. The notice goes on to say that the bitcoin market is not very large and is more concentrated in some areas, thus the overall demand for ATM machines is still very small and volume on online trading facilities is far greater than offline transactions. The rollout of the ATMs should help shift the balance somewhat.

Along with this, OKCoin officially launched the recharge code (voucher) scheme. The move is aimed at circumventing PBOC’s bank deposit ban. It remains to be seen how the People’s Bank of China will react to the latest evasion moves by Chinese bitcoin exchanges.

Re-charge code and an ATM, responsible for worldwide rally? Think thats possible?

Or it could be people buying back before April 15th knowing that the supposed "China ban" was nothing more than a bunch of FUD being spread?  

Could be, but most people reacted immediately to the news about the 15th, without actually waiting for the 15th to roll around

[manfred]

At least historically, Ukraine's farmland has also been an important resource. The west needs it more than Russia, which has plenty of her own (compared to population trends). It was not my intention to draw a historical comparison to the 1930s but since it came to my mind, it must have come to yours also..

Well China least 9 % of all available Ukraine farmland last year. Seams they need it more than anyone else.
http://www.theworldofchinese.com/2013/09/china-buys-five-per-cent-of-ukraine/

[fr33d0miz3r]

Looks like we are reversing 

[cAPSLOCK]

Looks like we are reversing 

That's where I have placed my bets...  All in around 407.

[rpietila]

Re-charge code and an ATM, responsible for worldwide rally? Think thats possible?

According to trendlines published here and elsewhere, the recent bitcoin price was so far beneath the trend that simply the absence of bad news was probably enough for a short-covering rally.

In my own trading, I give almost zero weight on "news". There are some developments that change the probability whether Bitcoin hits big ($1M) or not. To them I give some weight. Mostly I give weight to whether the price is below or above its long-term trend. This kind of trading schedule lets me buy low and sell high, gives peace of mind, and is the almost only strategy that actually is implementable for someone of my size (too small to manipulate world market, too big to daytrade efficiently anywhere). If BTC fails, I am prepared to ride it to the bottom, because I have sold high.

[cAPSLOCK]

If BTC fails, I am prepared to ride it to the bottom, because I have sold high.

My situation is the inverse equivalent.  My smaller pile of coins has exactly zero cost basis.  There is no way I wont wait out the dark times, and I'll be with you at the bottom if it comes.  You'll be rich, and I'll will have lost nothing.

[rpietila]

If BTC fails, I am prepared to ride it to the bottom, because I have sold high.

My situation is the inverse equivalent.  My smaller pile of coins has exactly zero cost basis.  There is no way I wont wait out the dark times, and I'll be with you at the bottom if it comes.  You'll be rich, and I'll will have lost nothing.

Yeah, the cost basis for my remaining bitcoins is more than $100 negative. It is an exaggeration to say that I am rich if bitcoin goes to zero, but I think I'll find something else to do, even for making money. It (making money) becomes easier when you are well-off and well-known, neither of which is solely dependent of my number of bitcoins, although I am grateful for the opportunity that I am living because of them.

[rpietila]

The market today does not give more than 12% probability of that happening; probably much less than that.

That's why I am buying and telling others to buy.

Bitcoin has a long and glorious history that its price has had nothing to do with long-term expected value. My estimate of scenario-probability-weighted discounted 2020 value of 1 bitcoin is about $500,000 and the fact that the majority of players in the market think differently, is my advantage.

And I am quite sure I know the reason for that. It is the extreme information asymmetry between Bitcoin owners and non-owners. (To simplify,) Bitcoin owners know that bitcoins are very valuable, and they buy and hold as much as they can. But as a result of their price going up, it forces people to sell, not because they don't trust Bitcoin, or expect the EV to be anything less than $100k or whatever in a few years, but because their entire net worth consists of bitcoins and it is rational to diversify (cf. Kelly betting). Even if the price goes down, these true believers cannot buy much more because the same optimal allocation strategy holds true.

The ones who don't own bitcoins, don't know it is good They are converting to bitcoiners at an exponential rate, though (see my previous post, and this thread for the ownership distribution). This increasing adoption gives the steam to the rise of price, in a self-sustaining virtuous cycle.

First only very few people knew about Bitcoin, and they were technologically astute and early adopter type. Many could start using Bitcoin immediately upon hearing. In the second phase more people heard, but they were, on average, slower. In the third phase or so, in which I belong, I heard and it took me 12 months to buy. In the next one, people who heard in 2011, propelled the boom in 2013 because their average decision making time was even longer. In the whole of 2013, especially the time around the peaks, 100s of millions of people heard about Bitcoin. On average, these people are even slower than previous ones, perhaps taking on average 24 months to enter (and also a smaller percentage of them enters). But they are so many! There is nothing you can really do to prevent the fraction of these people adopting Bitcoin, and by doing it, their action increases the price again by a decade, letting the rest of the planet to hear about it and putting hundreds of millions of people in the pipeline.

Bitcoiners know it, the rest don't. The price does not go to $1 million in an instant because only the ones who realize the above thing, can push the price up, but it will nevertheless go there eventually, because the above thing is a self-sustaining loop. Therefore buying bitcoins when you read and realize it, is the most lopsided bet you can ever make. You can actually pay $460 for something whose EV (expected value = average payback of all scenarios weighted by their probabilities) is in between $100k and $1M+. ONLY the fact that people realize this one at a time, slowly but exponentially, keeps the bitcoin price "at check", growing at an average of 1000% per year, for 5+ years now.

My wealth is dependent on the above being true. Nobody has explained to me, why it is not so. The stage is yours!

Kudos for the person who explained this to me in 2010, after which it took me 12 months to buy, after which it took an additional 18 months to realize it, which realization threatened my sanity, which was only saved by starting to smoke cigars. After 12 more months I tell it to you, please don't repeat my mistakes. Consider if it is valid, and invest accordingly. I am quite sure that next month you will not see this low prices any more, because the information is freely available.

[chriswilmer]

The market today does not give more than 12% probability of that happening; probably much less than that.

That's why I am buying and telling others to buy.

Bitcoin has a long and glorious history that its price has had nothing to do with long-term expected value. My estimate of scenario-probability-weighted discounted 2020 value of 1 bitcoin is about $500,000 and the fact that the majority of players in the market think differently, is my advantage.

And I am quite sure I know the reason for that. It is the extreme information asymmetry between Bitcoin owners and non-owners. (To simplify,) Bitcoin owners know that bitcoins are very valuable, and they buy and hold as much as they can. But as a result of their price going up, it forces people to sell, not because they don't trust Bitcoin, or expect the EV to be anything less than $100k or whatever in a few years, but because their entire net worth consists of bitcoins and it is rational to diversify (cf. Kelly betting). Even if the price goes down, these true believers cannot buy much more because the same optimal allocation strategy holds true.

The ones who don't own bitcoins, don't know it is good They are converting to bitcoiners at an exponential rate, though (see my previous post, and this thread for the ownership distribution). This increasing adoption gives the steam to the rise of price, in a self-sustaining virtuous cycle.

First only very few people knew about Bitcoin, and they were technologically astute and early adopter type. Many could start using Bitcoin immediately upon hearing. In the second phase more people heard, but they were, on average, slower. In the third phase or so, in which I belong, I heard and it took me 12 months to buy. In the next one, people who heard in 2011, propelled the boom in 2013 because their average decision making time was even longer. In the whole of 2013, especially the time around the peaks, 100s of millions of people heard about Bitcoin. On average, these people are even slower than previous ones, perhaps taking on average 24 months to enter (and also a smaller percentage of them enters). But they are so many! There is nothing you can really do to prevent the fraction of these people adopting Bitcoin, and by doing it, their action increases the price again by a decade, letting the rest of the planet to hear about it and putting hundreds of millions of people in the pipeline.

Bitcoiners know it, the rest don't. The price does not go to $1 million in an instant because only the ones who realize the above thing, can push the price up, but it will nevertheless go there eventually, because the above thing is a self-sustaining loop. Therefore buying bitcoins when you read and realize it, is the most lopsided bet you can ever make. You can actually pay $460 for something whose EV (expected value = average payback of all scenarios weighted by their probabilities) is in between $100k and $1M+. ONLY the fact that people realize this one at a time, slowly but exponentially, keeps the bitcoin price "at check", growing at an average of 1000% per year, for 5+ years now.

My wealth is dependent on the above being true. Nobody has explained to me, why it is not so. The stage is yours!

Kudos for the person who explained this to me in 2010, after which it took me 12 months to buy, after which it took an additional 18 months to realize it, which realization threatened my sanity, which was only saved by starting to smoke cigars. After 12 more months I tell it to you, please don't repeat my mistakes. Consider if it is valid, and invest accordingly. I am quite sure that next month you will not see this low prices any more, because the information is freely available.

+1000

This is such a concise articulation of what I also believe to be exactly correct that I am considering printing it out and hanging it on my wall

[jmw74]

I would add more more thing to rpietila's excellent observation.

There are those who bought early, but didn't really understand.  Perhaps they bought on a friend's advice, or just on a lark.  These are the coins that get shaken loose on the next downturn.  Getting in early is only half the battle.