rpietila Wall Observer - the Quality TA Thread ;)

[aminorex]

 On the one hand, if no one sells, the coin distribution will never become diffuse enough to be considered legitimate.  

The powers of the FRB would render USD illegitimate by a similar argument.   I don't ike to see the diffusion argument applied without making it limits clear.  Currency distribution always follows a power law.  Distribution can occur in many ways, but the main way it occurs is by trade in goods and services, which is the best and healthiest way.

But on the other hand, if no one buys, then the entire experiment collapses.

True, but that buying need not be in fiat.  I may buy with goods or services.  I would rather see liquidity in that market than in the exchange market, although both are good.

[2017orso]

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.

It is my understanding that rpietila and other spend a considerable amount of resources in order to answer this question.

Ultimately, don't see how an answer can be derived before the fact, especially at this stage.  It does make sense that at the point of mass appeal as initially met from hyper-accelerated interest, the gravity of 'fair market' price will create a spectacular correction as the subsequent oscillations 'bubble' us around that fair market price line growth.

However, I believe this is assuming the free market is allowed to congregate as governed by a dramatic bell curve of individual interest in joining the collective.  There does exist the potential, no idea how probable, that pro-active capital interest dominates the acquisition of coins and inhibits later stage individual acquisition.  This is I assume, what most here are hoping for, as there would inevitably be rendered a dramatic price squeeze.

In the case of powerful capital interest staying ahead of and thus creating more demand in the individual collective, the notion of a spectacular correction as described above becomes more confusing. If such service-oriented financial interest attempts to monopolize coin supply in droves, it will surely be to hold and re-distribute through profit-seeking gateways of re-supplying the free market.  As such, with a top-heavy organization of coin supply, the natural and organic oscillations of adoption as rendered by a collective of individual interest should be exhumed by said coin control.  That's what makes sense to me anyhow.  

It appears that this is what is indeed occurring.  In this case, it may indeed simply be a matter of acceleration and velocity, utilizing supply and time.

In essence then, perhaps at some critical juncture that may be arriving soon if not already underway, the growth cycle pattern as rendered by the speculative interest of the individual collective will be engulfed and left behind by a possible inflection point, at which point said collective will play catch-up, or simply be on the other side of a threshold whereby said interest is virtually non-existent, and the rest of that potential population has no interest in acquiring for speculative value, and are 'forced' or guided through acquisition as a means to a service-based end.

To add - bitcoin is detached from traditional technology adoption s curves in that it is also a currency, with speculative interest and money velocity as forces in its life-cycle.  That is not to say it should not adhere to sigmoid-like growth, but its path is surely more convoluted, with the potential for a novel pathway or at least certain exceptions or even more dramatic support of the phenomena along the way.

[Peter R]

 On the one hand, if no one sells, the coin distribution will never become diffuse enough to be considered legitimate.  

The powers of the FRB would render USD illegitimate by a similar argument.   I don't ike to see the diffusion argument applied without making it limits clear.  Currency distribution always follows a power law.  Distribution can occur in many ways, but the main way it occurs is by trade in goods and services, which is the best and healthiest way.

But on the other hand, if no one buys, then the entire experiment collapses.

True, but that buying need not be in fiat.  I may buy with goods or services.  I would rather see liquidity in that market than in the exchange market, although both are good.

Thank Aminorex.  I agree that what you wrote is more accurate (and more powerful) than what I wrote.  Like you implied, the growing perception that bitcoin is legitimate so that people accept it in return for their goods and services becomes an efficient coin-distribution mechanism (further legitimizing bitcoin). 

By this logic, it would be beneficial to the bitcoin economy if we could slowly move more of our work into bitcoin space.  Perhaps this could be a killer-app for bitcoin: some sort of "work pools" for small tasks that a bright young computer programmer from Nepal (or anywhere) could participate in.  I can often break my projects down into small, well-defined tasks.  I'd rather pay someone 200 mBTC for creating and testing a few C++ functions, than write them myself.  And since the average yearly income in Nepal is $182.46, this could create a lot of demand for self-education, empowering people in the process. 

[Peter R]

Aminorex: the full weight of what you said just hit me.  Many people in the world will never buy bitcoin.  They will simply begin to accept them in exchange for their time.  

[SlipperySlope]

Aminorex: the full weight of what you said just hit me.  Many people in the world will never buy bitcoin.  They will simply begin to accept them in exchange for their time.  

I had the same notion from a different viewpoint.

There is an obvious disruptive market for bitcoin transactions whose purpose is international remittances. Here in Central Texas, there are many non-bank facilities for sending payments to Mexico. I am awaiting the development of local Mexican bitcoin economies that will form a virtuous circle of adoption. Supposing that bitcoin remittance payment recipients can simply spend bitcoin locally, there is no need for an exchange on either end.

No banks, no exchanges, no problems.

[chessnut]

How many other examples of a 99% speculative bubble have we have in history other than BTC that are NOT pyramid/ponzi schemes?

each time delusional speculators pump BTC up to a silly price, would it really surprise you if the consolidation phase was always the same length roughly?

bubbles are all the same, a bunch of delusional speculators. It would be interesting to compare all speculative bubbles in history to find an average consolidation period length, but we cant do this because most bubbles never recover OR are not entirely speculator drive (fundamentals affect the price)

Perhaps the explanation for a steady sequence of boom bust cycles is that this is the first time it has been subject to occur, and we are watching speculators in their natural environment in a way never seen before.

[damnek]

How many other examples of a 99% speculative bubble have we have in history other than BTC that are NOT pyramid/ponzi schemes?

each time delusional speculators pump BTC up to a silly price, would it really surprise you if the consolidation phase was always the same length roughly?

bubbles are all the same, a bunch of delusional speculators. It would be interesting to compare all speculative bubbles in history to find an average consolidation period length, but we cant do this because most bubbles never recover OR are not entirely speculator drive (fundamentals affect the price)

Perhaps the explanation for a steady sequence of boom bust cycles is that this is the first time it has been subject to occur, and we are watching speculators in their natural environment in a way never seen before.

Here are some examples: http://2dyr4w3trph93kswidi3cpln2x.wpengine.netdna-cdn.com/wp-content/uploads/2008/02/pennystockingslides75-841.pdf

[Siegfried]

 On the one hand, if no one sells, the coin distribution will never become diffuse enough to be considered legitimate.  

The powers of the FRB would render USD illegitimate by a similar argument.   I don't ike to see the diffusion argument applied without making it limits clear.  Currency distribution always follows a power law.  Distribution can occur in many ways, but the main way it occurs is by trade in goods and services, which is the best and healthiest way.

But on the other hand, if no one buys, then the entire experiment collapses.

True, but that buying need not be in fiat.  I may buy with goods or services.  I would rather see liquidity in that market than in the exchange market, although both are good.

Thank Aminorex.  I agree that what you wrote is more accurate (and more powerful) than what I wrote.  Like you implied, the growing perception that bitcoin is legitimate so that people accept it in return for their goods and services becomes an efficient coin-distribution mechanism (further legitimizing bitcoin). 

By this logic, it would be beneficial to the bitcoin economy if we could slowly move more of our work into bitcoin space.  Perhaps this could be a killer-app for bitcoin: some sort of "work pools" for small tasks that a bright young computer programmer from Nepal (or anywhere) could participate in.  I can often break my projects down into small, well-defined tasks.  I'd rather pay someone 200 mBTC for creating and testing a few C++ functions, than write them myself.  And since the average yearly income in Nepal is $182.46, this could create a lot of demand for self-education, empowering people in the process. 

Yes, this is the key. At the present time the buyers and sellers of labor for BTC are too few, but in the next few years this will change and a snowball effect will occur. BTC users now can start to help that process along by insisting on giving tips to people in BTC, even if they are not interested at first. If you hire someone to do landscaping work, pay the full price in dollars, but then offer to give a 10 dollar tip in BTC. It is likely that the person will take two minutes to download a wallet app to accept the tip, and then you have helped increase the distribution and user base of Bitcoin.

[SlipperySlope]

Edging ever closer to the November 2013 bubble collapse resistance trend line. The drama continues as illustrated on the 1-hour resolution Bitstamp chart. China leads the way, with no-fee trading on Huobi yielding 8x more volume upwards . . .

[Siegfried]

Edging ever closer to the November 2013 bubble collapse resistance trend line. The drama continues as illustrated on the 1-hour resolution Bitstamp chart. China leads the way, with no-fee trading on Huobi yielding 8x more volume upwards . . .

So the theory says, when it crosses that trend line, it will explode upward?

[SlipperySlope]

So the theory says, when it crosses that trend line, it will explode upward?

Yes, that is it - to the extent that technical analysis is a theory. Not a certainty of course, but often observed when the price movement has great momentum. Furthermore, it could simply move sideways to break through, but for those of us biased to expect a new bubble this summer, then a pop upwards would reinforce our confidence.

[pinksheep]

so it's still a buy until it hits 525?

[BitchicksHusband]

 On the one hand, if no one sells, the coin distribution will never become diffuse enough to be considered legitimate.  

The powers of the FRB would render USD illegitimate by a similar argument.   I don't ike to see the diffusion argument applied without making it limits clear.  Currency distribution always follows a power law.  Distribution can occur in many ways, but the main way it occurs is by trade in goods and services, which is the best and healthiest way.

But on the other hand, if no one buys, then the entire experiment collapses.

True, but that buying need not be in fiat.  I may buy with goods or services.  I would rather see liquidity in that market than in the exchange market, although both are good.

Thank Aminorex.  I agree that what you wrote is more accurate (and more powerful) than what I wrote.  Like you implied, the growing perception that bitcoin is legitimate so that people accept it in return for their goods and services becomes an efficient coin-distribution mechanism (further legitimizing bitcoin). 

By this logic, it would be beneficial to the bitcoin economy if we could slowly move more of our work into bitcoin space.  Perhaps this could be a killer-app for bitcoin: some sort of "work pools" for small tasks that a bright young computer programmer from Nepal (or anywhere) could participate in.  I can often break my projects down into small, well-defined tasks.  I'd rather pay someone 200 mBTC for creating and testing a few C++ functions, than write them myself.  And since the average yearly income in Nepal is $182.46, this could create a lot of demand for self-education, empowering people in the process. 

Yes, this is the key. At the present time the buyers and sellers of labor for BTC are too few, but in the next few years this will change and a snowball effect will occur. BTC users now can start to help that process along by insisting on giving tips to people in BTC, even if they are not interested at first. If you hire someone to do landscaping work, pay the full price in dollars, but then offer to give a 10 dollar tip in BTC. It is likely that the person will take two minutes to download a wallet app to accept the tip, and then you have helped increase the distribution and user base of Bitcoin.

In the US, you can just send your tip in Coinbase to his e-mail and he has to sign up to claim it or it gets returned to you.

[SlipperySlope]

so it's still a buy until it hits 525?

I am not a short term trader and would not offer any signals. Rather, I am like a farmer in drought stricken Central Texas. I do not make decisions based upon whether it is predicted to rain next week. Rather I track precipitation as it happens, and monitor the increasing probability of an El Nino event that may break our drought this summer.

Log10 regression trendlines maintained by myself and others indicate that the current price is well below the long term trend. Accordingly, this is a good time to postpone spending bitcoin. For example, I plan to triple the capacity of my GPU mining rigs that I lease for bitcoin. The chart tells me to wait a few months and buy 10x more GPU cards for the same coin. The chart tells me to stuff every spare $20 bill into my neighborhood Robocoin ATM - which I will do again in a few hours.

Its almost always a good time to buy Bitcoin. The time not to buy bitcoin begins shortly after the next all-time-high and extends until after prices have collapsed at least 50% from the peak. Simple rules.

If you are building a trading bot for a no-fee exchange, then I recommend the typical volume-weighted return to mean algorithm such as described here . . .

Competitive Algorithms for VWAP and Limit Order Trading.

You need to be an unemotional software bot when you are snatching dimes from in front of a steamroller, as American traders sometimes say.

[pinksheep]

i'm not building a bot, wouldn't have a clue about that, i'm a long-term holder, just wondering if i should buy more now.

[bitcoinsrus]

i'm not building a bot, wouldn't have a clue about that, i'm a long-term holder, just wondering if i should buy more now.

Well, use your own instinct.  When it was 800, I asked if I should buy and most said yes.  One guy said no.  All I am saying is would you rather buy now risking that it may go lower.  Or would you rather play it safe and buy on an uptrend (where it is going up and basically you feel safer but feel kinda bad for not buying when it was 500).

My advice is to do what you think is fair.  Like some other guy mentioned.  It seems better to buy at least 50% lower of last ATH (1200)

And, do you think 500 is fair for the utility and potential btc provides?  Do the math.  If you had like 3k to invest and you buy now, thats like 6 btc

If it goes to 450 that is 6.66 (the mark of the beast   )
if it goes to 550 then that is 5.5454)

so 6 now or potentially .66 more if it goes a little down
or losing like <.5 if it goes up

[SlipperySlope]

Price action is still near the upper resistance trendline - which goes back to the November 2013 peak. I drew a lower trendline, with much weaker confidence, to illustrate the what I believe is the convergence of trader sentiment regarding fair value. If the lower trendline were accurate and indeed holds, then prices escape from the trendline within nine days. Upwards, or sideways, I reason because the bottom of the November 2013 bubble collapse was at 340 on April 10 - so I think.

Here is the 6-hour chart . . .

 

[infognom]

Price action is still near the upper resistance trendline - which goes back to the November 2013 peak

Trying to draw the very exact same trendline and i'm struggling, not sure which data you took exactly. I think there are a couple of possible potential lines to draw and you somehow took the most pessimistic one, aren't you? With that i mean the one which is most difficult to break.

The most pessimistic one i could draw was (on 6h chart) 2013-11-30 -> $1163 + 2014-01-06 -> 995. In both cases the top of candle (highest price).

Well that has at least the advantage that it crosses the 16th april candle between high and entry-price at about $544 (little bit more pessimistic than yours) and so it would be more or less ideal for our purpose of a clear trend-reversal-signal ... am i right?!

Any additional thoughts about which points to take in which cases?

[SlipperySlope]

Price action is still near the upper resistance trendline - which goes back to the November 2013 peak

Trying to draw the very exact same trendline and i'm struggling, not sure which data you took exactly. I think there are a couple of possible potential lines to draw and you somehow took the most pessimistic one, aren't you? With that i mean the one which is most difficult to break.

The most pessimistic one i could draw was (on 6h chart) 2013-11-30 -> $1163 + 2014-01-06 -> 995. In both cases the top of candle (highest price).

Well that has at least the advantage that it crosses the 16th april candle between high and entry-price at about $544 (little bit more pessimistic than yours) and so it would be more or less ideal for our purpose of a clear trend-reversal-signal ... am i right?!

Any additional thoughts about which points to take in which cases?

Here is a redraw of the upper resistance line using the built in line tool on BitcoinWisdom. For a chartist, the trend is rather scary unless one makes the presumption that I did . . . April 10 at $340 was the bottom of the bubble collapse.

[infognom]

Here is a redraw of the upper resistance line using the built in line tool on BitcoinWisdom. For a chartist, the trend is rather scary unless one makes the presumption that I did . . . April 10 at $340 was the bottom of the bubble collapse.

At least it looks a lot mory scary, if you choose the logarithmic scale ;-)