rpietila Wall Observer - the Quality TA Thread ;)

[rpietila]

So where does -17% fit in?

It can go anywhere

[zimmah]

5. About zero gain last month can lead to 500% gain next month (or -50% loss).

only in bitcoin  

anyway, i think may will not increase us past 900, and it will probably sort of oscillate around 750 for a while.

June is most likely the month were crazy stuff will happen, but it may as well be july.

[Carlton Banks]

June is most likely the month were crazy stuff will happen, but it may as well be july.

Is there an actual attributable cause for this 7-8 month growth/consolidation cycle? I recognise the pattern in the charts, but have not heard any reasoning for the period length in the discourse of analysis here on the forum. Plenty folks are reinforcing the notion that the pattern will continue, and I do understand that there will be some discernible growth cycle with distinct phases delineated as static->increase->correction->static->etc.

But why are the periods a regular amount of time? And why are they 7-8 months? I'm just wondering if there isn't some self-reinforcing observational logic going on here, that the expected continuation of that previous rhythm is what's actually creating it. And that the real "end of bitcoin" narrative will get exploited more effectively once this seemingly arbitrary pattern skips an iteration at some point.

Please feel free to correct my doubts if necessary, as I had also, up until now, been enjoying the contemplation of another price surge in June-July 2014!

[chessnut]

I dont see any good reason for it either, but maybe that's its nature.

- there is one born every minute, and there is a bitcoin boom and bust every six months.

maybe it is constant because until now it has been consistently driven by 99% speculators. But one could also argue that the 'china ban' was an unforseen event that drove this market - I do not agree. it was fud - news comes and goes every day, the market only moves when it is vulnerable.

I am sure it will change when fundamental forces kick in - the elbow. we have not seen this yet.

[Peter R]

June is most likely the month were crazy stuff will happen, but it may as well be july.

Is there an actual attributable cause for this 7-8 month growth/consolidation cycle? I recognise the pattern in the charts, but have not heard any reasoning for the period length in the discourse of analysis here on the forum. Plenty folks are reinforcing the notion that the pattern will continue, and I do understand that there will be some discernible growth cycle with distinct phases delineated as static->increase->correction->static->etc.

But why are the periods a regular amount of time? And why are they 7-8 months? I'm just wondering if there isn't some self-reinforcing observational logic going on here, that the expected continuation of that previous rhythm is what's actually creating it. And that the real "end of bitcoin" narrative will get exploited more effectively once this seemingly arbitrary pattern skips an iteration at some point.

Please feel free to correct my doubts if necessary, as I had also, up until now, been enjoying the contemplation of another price surge in June-July 2014!

Lol, I was thinking the same thing earlier today.  People are expecting a price rise to begin this summer, based on the previous patterns.  If it doesn't happen, then like you said, the real "end of bitcoin" narrative will get exploited more effectively.  For this reason, I could see us entering a long flat spot.

That being said, I think Risto's made the good point that perhaps the dominant market dynamics are driven by the new (larger) group of humans that enters during each rally and the new (larger) group of investors sitting on significant returns from the previous growth spurt.  And all humans basically act the same when faced for the first time with a bitcoin growth spurt.  But that sounds almost too easy….

[zimmah]

June is most likely the month were crazy stuff will happen, but it may as well be july.

Is there an actual attributable cause for this 7-8 month growth/consolidation cycle? I recognise the pattern in the charts, but have not heard any reasoning for the period length in the discourse of analysis here on the forum. Plenty folks are reinforcing the notion that the pattern will continue, and I do understand that there will be some discernible growth cycle with distinct phases delineated as static->increase->correction->static->etc.

But why are the periods a regular amount of time? And why are they 7-8 months? I'm just wondering if there isn't some self-reinforcing observational logic going on here, that the expected continuation of that previous rhythm is what's actually creating it. And that the real "end of bitcoin" narrative will get exploited more effectively once this seemingly arbitrary pattern skips an iteration at some point.

Please feel free to correct my doubts if necessary, as I had also, up until now, been enjoying the contemplation of another price surge in June-July 2014!

Lol, I was thinking the same thing earlier today.  People are expecting a price rise to begin this summer, based on the previous patterns.  If it doesn't happen, then like you said, the real "end of bitcoin" narrative will get exploited more effectively.  For this reason, I could see us entering a long flat spot.

That being said, I think Risto's made the good point that perhaps the dominant market dynamics are driven by the new (larger) group of humans that enters during each rally and the new (larger) group of investors sitting on significant returns from the previous growth spurt.  And all humans basically act the same when faced for the first time with a bitcoin growth spurt.  But that sounds almost too easy….

it may largely be a self-fulfilling prophesy though. Markets like these are largely driven by speculators, and speculators try to see a trend and act on it. But by acting on a trend, especially when a large group of people agrees on a trend, reinforces said trend.

[SlipperySlope]

June is most likely the month were crazy stuff will happen, but it may as well be july.

Is there an actual attributable cause for this 7-8 month growth/consolidation cycle? I recognise the pattern in the charts, but have not heard any reasoning for the period length in the discourse of analysis here on the forum. Plenty folks are reinforcing the notion that the pattern will continue, and I do understand that there will be some discernible growth cycle with distinct phases delineated as static->increase->correction->static->etc.

But why are the periods a regular amount of time? And why are they 7-8 months? I'm just wondering if there isn't some self-reinforcing observational logic going on here, that the expected continuation of that previous rhythm is what's actually creating it. And that the real "end of bitcoin" narrative will get exploited more effectively once this seemingly arbitrary pattern skips an iteration at some point.

Please feel free to correct my doubts if necessary, as I had also, up until now, been enjoying the contemplation of another price surge in June-July 2014!

I too, have given thought to the duration of bubble cycles. Rpietila explained the bitcoin adoption phenomena in a prior post, which I agree with . . .

https://bitcointalk.org/index.php?topic=400235.msg6219380#msg6219380

I would add that traders and the not-yet-adopted public know about bubbles, and have come to expect them. We wait for the collapse to complete, for prices to begin rising again and then momentum builds the bubble mania. The duration between recent bubbles I think has to do with the flow of information and the resulting change of sentiment from bearish to bullish. Some number of months is required for new speculators to observe that Bitcoin has not yet failed, that transaction growth creates organic demand for coin, and the news stories reverse sentiment.

[lumierre]

June is most likely the month were crazy stuff will happen, but it may as well be july.

Is there an actual attributable cause for this 7-8 month growth/consolidation cycle? I recognise the pattern in the charts, but have not heard any reasoning for the period length in the discourse of analysis here on the forum. Plenty folks are reinforcing the notion that the pattern will continue, and I do understand that there will be some discernible growth cycle with distinct phases delineated as static->increase->correction->static->etc.

But why are the periods a regular amount of time? And why are they 7-8 months? I'm just wondering if there isn't some self-reinforcing observational logic going on here, that the expected continuation of that previous rhythm is what's actually creating it. And that the real "end of bitcoin" narrative will get exploited more effectively once this seemingly arbitrary pattern skips an iteration at some point.

Please feel free to correct my doubts if necessary, as I had also, up until now, been enjoying the contemplation of another price surge in June-July 2014!

Perhaps a one reason that might contribute to the time periods is human emotion itself. Humans aren't robots that don't get tired of doing something over and over again. A simple example is some News. When the same news is played over and over again on TV, paper, or internet, we get tired of it. The same is true for many things. Humans get tired of things whether learning something or working. However, we get interested on it again after awhile without hearing about it. And thus, the time period when we get tired of the same old news is consolidation while when we get interested again is the mania. I know all of us have experienced this. If we are emotionless robots, then I don't think we will have these bubbles.

[SlipperySlope]

On this one-hour resolution Bitstamp chart, the upper resistance line originates at the November peak and has constrained all prior moves upwards during the bubble collapse. Assuming the bottom of the collapse is behind us, drama is building as the rally of the past 24 hours again approaches the resistance trendline.

Will it bounce back down, or bust through upwards? I will be peeking at the price indicator on my bedside phone this evening in the USA. A price above $530 would be very significant from a technical point of view.

The lower, short term resistance trendline I drew was pierced to get this part of the rally moving.

[Carlton Banks]

Crap. I was hoping the first comment would shoot the whole notion down in flames of sage and knowing technical analysis  

Still, you've given me some encouragement. You've reminded me that the nature of this new tool we have here means that the network effect drives adoption, which in turn drives the price cycle. And that's a very powerful mechanism when you consider the backdrop of worldwide recession, financial repression of various types, the increased political tension with many causes and effects etc.

I'm still not satisfied that we can account for the uniformity of the cycles, although maybe I'm overstating the case for a rigid pattern. The magnitude in price change has been less than uniform for sure, and to say that the periods have been identical is not true, they have just been similar (and probably up to 33% difference in the length of, say, the panic buying phase before the correction).

Still, I am wary of getting too cultish about expectations in price cycles. If not accountable to a scrutable reason, then the apprehension of the cycle is prone to exploitative actors (especially those that are aware of information that affects market conditions in advance of announcement). I'm not sure why I've decided today to start stamping on the burgeoning price confidence, just that it struck me that the log graph of the 4 growth periods post-2011 is becoming more common on this forum, with nothing that explicitly explains the cycle length in the TA threads.

[Peter R]

Still, I am wary of getting too cultish about expectations in price cycles. If not accountable to a scrutable reason, then the apprehension of the cycle is prone to exploitative actors (especially those that are aware of information that affects market conditions in advance of announcement). I'm not sure why I've decided today to start stamping on the burgeoning price confidence, just that it struck me that the log graph of the 4 growth periods post-2011 is becoming more common on this forum, with nothing that explicitly explains the cycle length in the TA threads.

You jinxed us Carlton    

But like you said, cultish expectations about price cycles are dangerous because they can be exploited.

Nobody said bootstrapping a new world currency would be easy.  On the one hand, if no one sells, the coin distribution will never become diffuse enough to be considered legitimate.  But on the other hand, if no one buys, then the entire experiment collapses.  So if bitcoin is to succeed, it must repeatedly find new ways to scare us into selling some of our coins.  If it stops doing that, then by definition it can't succeed!    

So now it's my turn to help bitcoin succeed by scaring everyone: the reality is that no one knows for sure what will happen.  Bitcoin could go over $1,000,000, or it could crash to the ground.  All we can do is place our bets, accept the risk, and encourage the use of our peer-to-peer electronic cash system across our spheres of influence.    
 

[chessnut]

Curiously, this consolidation cycle has been first to break the cycle of wedges. I like it, a nice deep retracement forebodes well for the future.

[cAPSLOCK]

Curiously, this consolidation cycle has been first to break the cycle of wedges. I like it, a nice deep retracement forebodes well for the future.

I think we are also seeing some nice consolidation @500.  The longer it goes on the better imho.

For what its worth... you mean "bodes well"  since "foerbodes well" is an oxymoron.

[sidhujag]

Crap. I was hoping the first comment would shoot the whole notion down in flames of sage and knowing technical analysis  

Still, you've given me some encouragement. You've reminded me that the nature of this new tool we have here means that the network effect drives adoption, which in turn drives the price cycle. And that's a very powerful mechanism when you consider the backdrop of worldwide recession, financial repression of various types, the increased political tension with many causes and effects etc.

I'm still not satisfied that we can account for the uniformity of the cycles, although maybe I'm overstating the case for a rigid pattern. The magnitude in price change has been less than uniform for sure, and to say that the periods have been identical is not true, they have just been similar (and probably up to 33% difference in the length of, say, the panic buying phase before the correction).

Still, I am wary of getting too cultish about expectations in price cycles. If not accountable to a scrutable reason, then the apprehension of the cycle is prone to exploitative actors (especially those that are aware of information that affects market conditions in advance of announcement). I'm not sure why I've decided today to start stamping on the burgeoning price confidence, just that it struck me that the log graph of the 4 growth periods post-2011 is becoming more common on this forum, with nothing that explicitly explains the cycle length in the TA threads.

Markets dont repeat they rhyme.. So it will happen when you least expect it.. Same as prior cycle analysis that led to targets of $700 and ppl laughed at the speculation.. at the time seemed that it was more grasping at straws but it happened and did so during bearish sentiment. Big fish need panic to accumulate and gloating to distribute.. every market is the same so we watch for a trigger and sing the boy who cried wolf until he actually shows up.

Its like opening up a charting package big fish used amd sticking on the stochastic indicator and backtesting with 95% hit rate because at the time the
big fish got to it first and just used defaults.. But today it almost seems like the signals are reversed because people backtested and assumed to stick with the
setup. In the end if you zoom out and consider fundamentals then price wont be a puzzle.

1) Fiat is in a path of destruction
2) Can bitcoin be a savior? Can it offer utility such that every person with internet will use it?
If so then you can validate a bull going fwd..

There is nothing the fed can say that will give me hope that fiat can and will work for us so question 2 looms.

The collective cannot be brainwashed the way it was before
because of the internet facts are brought out and the market is understanding now the reality of the coverup that the fed has been a part of since 1900s. Only way is to enforce and not sure that is working out too well for them right now.

[Wary]

But why are the periods a regular amount of time? And why are they 7-8 months?

The theory you are looking for should also explain why the first two intervals (in 2010 and 2011) were twice as short: 4 months, rather than 7-8.

[nioc]

When one looks up at the night sky and sees the stars they are randomly distributed.  Yet people see patterns which include bulls and bears.  The Greeks never saw kangaroos in the sky.

[BitchicksHusband]

When one looks up at the night sky and sees the stars they are randomly distributed.  Yet people see patterns which include bulls and bears.  The Greeks never saw kangaroos in the sky.

That was deep.  Or something.

[ErisDiscordia]

When one looks up at the night sky and sees the stars they are randomly distributed.  Yet people see patterns which include bulls and bears.  The Greeks never saw kangaroos in the sky.

That was deep.  Or something.

Quite worthy of 4/20. I approve. Probably.

[TooDumbForBitcoin]

The Greeks never saw kangaroos in the sky.

The aborigines did.

[Carlton Banks]

Thanks everybody. You didn't manage to explain it all away in one sentence, but I'm clearer on how meaningful the pattern is, having read all the replies.

The answer seems to be that it's just an accident of the circumstances affecting the market. This is just the ebb and flow of sentiment towards a brand new class of asset that possesses intriguing properties and potential for revolutionary mass appeal. In other words, this is an unprecedented market. The closest precendent I can imagine is artificial. It's like a composite of the age when gold was popularised as a universal exchange instrument, together with the introduction of information tools that came out of the electronics era of the 1970's and 80's. Even that isn't adequate to account for the specific details of the "information tools" part that make the satoshi model what it is, and could be extended to.


I guess this leads to another question about the trends: what will characterise this phase of adoption once we have 8-12 years of charts to refer to? What, if any, recurring pattern could take place on a timescale that's one order of magnitude higher? When you consider the projections about long term adoption, this phase should see the least price growth as a part of the whole.

So, given that there will always be notches and bulges in the growth as it deviates about a long term trend, where does the current super-phase fit? Do we simply have to "wait til we find out"? Can we see past that "event horizon"? I suspect the answer is no, but again, it'd be nice if someone would shine a light on something obvious that I'm missing.