If you're not out, get out.

[Elwar]

More Bitcoins for me.

[mp420]

I for one believe, at the current market fundamentals, that under $5 is unsustainable in the long term. I'm already waiting for my bank transfer to MtGox to clear so I can take advantage of the low prices, but I fear everyone else is racing against me to the cheap coins.

It may dip to anomalous lows because there's too little fiat money left on the exchanges. Friday was just too wild. I can't comprehend why anyone would be desperate enough to dump such huge amounts of BTC when there's so little support for the prices.

[ElectricMucus]

Chances are there will be a window of opportunity for about a week or so, and it might go even lower.

[Cluster2k]

I for one believe, at the current market fundamentals, that under $5 is unsustainable in the long term. I'm already waiting for my bank transfer to MtGox to clear so I can take advantage of the low prices, but I fear everyone else is racing against me to the cheap coins.

By publicly announcing your intentions with 'oh no, other people are going to beat me to the bargains' I can't help but feel you've already got quite a large number of bitcoins, or have recently purchased some and are looking to pump the price higher.

It may dip to anomalous lows because there's too little fiat money left on the exchanges. Friday was just too wild. I can't comprehend why anyone would be desperate enough to dump such huge amounts of BTC when there's so little support for the prices.

So little support for them being this high, or this low?  We can use mining costs to support the price of bitcoins.  If you're in Europe or Australia then $4.75 is already below electricity costs.  American miners may stick in the game for longer.  But with over 7 million bitcoins already out there, there are more than enough for people to speculate with even if not a single extra bitcoin was created from today onwards.  Remember, at least a few million bitcoins were generated when the price was sub $1.  There is price support for bitcoins, but it's nowhere near as high as $5.

[mp420]

By publicly announcing your intentions with 'oh no, other people are going to beat me to the bargains' I can't help but feel you've already got quite a large number of bitcoins, or have recently purchased some and are looking to pump the price higher.

Nah, I own some bitcoins but I use them more as a long term hedging strategy against the hypothetical scenario where BTCs become a much more useful currency than they're now. In that case they would be much more valuable too. I'm not betting all my savings on that.

But that hypothetical scenario is becoming more and more likely as time passes and no fundamental technical problems are found within the bitcoin network. I'm pretty much only waiting for the scalability enhancements to be implemented, I think the scalability issues are the only hard limits on the usefulness of bitcoin at the moment.

And I am not going to invest huge amounts of money into bitcoin anyway. If it drops lower than I've expected, I'll buy more of it.

I just stated my speculative opinion about what I think of current prices.

[im3w1l]

I can not believe you people are still making decisions based on the order book...

Well, the L1 data is mostly sound.

[tvbcof]

By publicly announcing your intentions with 'oh no, other people are going to beat me to the bargains' I can't help but feel you've already got quite a large number of bitcoins, or have recently purchased some and are looking to pump the price higher.

Nah, I own some bitcoins but I use them more as a long term hedging strategy against the hypothetical scenario where BTCs become a much more useful currency than they're now. In that case they would be much more valuable too. I'm not betting all my savings on that.

But that hypothetical scenario is becoming more and more likely as time passes and no fundamental technical problems are found within the bitcoin network. I'm pretty much only waiting for the scalability enhancements to be implemented, I think the scalability issues are the only hard limits on the usefulness of bitcoin at the moment.

And I am not going to invest huge amounts of money into bitcoin anyway. If it drops lower than I've expected, I'll buy more of it.

I just stated my speculative opinion about what I think of current prices.

Jeez...I had to double-check that I did not write the above prose.

I had some 'absurd low' bids in that got taken out.  Put in a few more (and the number of BTC that I pick up if those get snagged is higher due to the much lower price.)

[Technomage]

I'd change the topic to "If you're not in, get in."

It's fairly evident to me that the bubble has deflated. I'm expecting that next week we'll finally see a change in the trends and there will actually be at least one rally of decent volume. With the current size of the Bitcoin economy, which is 7 times larger than at the beginning of 2011, I consider any price lower than $5 a low one because the Bitcoin economy at this stage should be able to fundamentally have a price of $5 at least.

That being said, I do plan on buying more coins if I can get money in before the price is still visiting the below $5 range. Will I buy at higher than $5, that'll depend on the trends and what kind of rally's we'll see in the weeks to come. This will be a very interesting month I believe.

[MaGNeT]

More Bitcoins for me.

This!

[Gabi]

SELL SELL SELL

[coinonymous]

IMO the most hyperbolic speculators are confused.  The exchanges are modeled after forex, and forex is a very useful analogy that almost always suffices when talking and even speculating about BTCUSD or BTC-Gold or what-have-you.

But, when one's purpose is to analyze the macroeconomics of Bitcoin and develop long term real price movement expectations the "currency" analogy breaks down.

First, BTC has no intrinsic value basis.  In fact, as with fiat currency, there is arguably an intrinsic negative real value expectation since there are costs associated with printing and carrying around and so forth (although these ultimately must be weighed against the real costs of the barter system which are clearly quite significant!)

Second, expected long-term intrinsic minting costs are (arguably) much higher with respect to BTC than typical fiat currencies, by design.  So much so, I would argue, that a "backed" currency (like, say, USD in late 19th and early 20th century) is clearly a far better analogy.

Third, even this model is deficient since, although not huge, gold, being shiny, malleable, conductive and so forth, does have real intrinsic value which creates a kind of "speculative floor."  Even if somebody figures out how to effortlessly fabricate gold from dirt, it will still retain some value because there will always be a market for it so long as civilization has not utterly collapsed.  Bitcoin has no such intrinsic value.

Correct me if I'm wrong, but if we are modelling rational expectations, then the near-guarantee of scarcity and relative-to-aggregate supply-side minting difficulty (barring, I suppose, dramatic and unexpected advances in crypto-math) forms the sole basis for for any speculation about long-term price movements, by way of a demand function determined solely by the utility of BTC as a means of exchange and storage of wealth.

This means, I think, that our mid-to-long term expectations of real Bitcoin prices won't follow the same patterns that we are accustomed to seeing in forex or commodities markets.

Put another way, who fucking knows what will happen!?  It's fascinating to speculate about, but any sort of "return-to-mean, ldo" hypothesis, intrinsic value hypothesis or other chart-whisperer hypothesis probably has no basis here.  We need to think way, way outside of those boxes because the supply and demand functions of Bitcoin don't answer to the same fundamentals we are accustomed to seeing in other commodities.

[im3w1l]

I model it as a random jog - it's far more volatile than a random walk 

[caston]

I'm not selling. It gets my mind in the wrong mindset and I end up in the bear trap when the market takes off again. At the moment I am using fiat money to pay down personal debts and am trading the alternates to increase my BTC count. When I am ready I will buy a more BTC. At the moment I buy some from a miner that I know in real life as he is a good friend but he only produces 1 BTC a day and kind of wants to just pay off his rig and get out. I tell him what I make trading the BTC he sells me and he is interested but I warn him to be careful.

[cbeast]

The cipher geeks say bitcoin is a good idea. Economists are almost always wrong anyway, so I'll stay with the smart money and bitcoin.

[Surawit]

I'd change the topic to "If you're not in, get in."

It's fairly evident to me that the bubble has deflated. I'm expecting that next week we'll finally see a change in the trends and there will actually be at least one rally of decent volume. With the current size of the Bitcoin economy, which is 7 times larger than at the beginning of 2011, I consider any price lower than $5 a low one because the Bitcoin economy at this stage should be able to fundamentally have a price of $5 at least.

That being said, I do plan on buying more coins if I can get money in before the price is still visiting the below $5 range. Will I buy at higher than $5, that'll depend on the trends and what kind of rally's we'll see in the weeks to come. This will be a very interesting month I believe.

Please, keep making predictions

Indeed. Everything about Bitcoin fundamentals is going fairly well right now. No bad news, some good news. Trends are doing okay such as google trends and forum memberships. I seriously doubt a new low of below $5.

We might see a new low below the last one but I think $4.xx is almost impossible, there is simply no fundamental reason for it to go that low. The demand at $5.xx will be absolutely massive, those are truly cheap coins.

In fact I'm very surprised if the price breaks below the resistance levels at $6.xx, but I guess we'll see.

Well holding makes sense right now. Or buying, if you still have something to buy with. It's very, very unlikely that price will bottom at below $5. In fact I'd be willing to bet on this if someone wants to

Now I'm interested in seeing if the price will even break $6 which I think is unlikely but possible. Regardless, now we're at a range where buying is a good move and holding is a really good move.

Only a total doomsday-bear would sell at around $6.50 or less, there are no real indicators to show a major price drop from that point unless you're only seeing the very pessimistic scenarios. Anything is possible, but it's really pessimistic thinking.

Just lingering at 5 or 6 for a month before it jumps to some random price.

From what I've seen, the price jumps somewhere and then just lingers and lingers.

Well this is a good question. One thing that's important to note is that a change of one dollar in price is relatively a MUCH bigger deal when we close in on the smaller single digits. There is a huge difference between $5 and $6 and I think this will prove fairly critical in the near future.

We will probably see a major correction when the price bottoms out, whatever the bottom might be. To at least $7+, possibly $8+. Then it's a good question what will happen, there is a possibility of a trend changing rally and there's also a possibility of continuing decline.

But contrary to the doomsday-trolls I feel that a stable price lower than $5 is pretty much not happening, at all. I don't even think of that situation because it's simply so unlikely, the demand for cheap coins just rises exponentially going down from $7 to $4 so with the current fundamentals I can't see a price below $5. I can only see a spike below $5 but even that is very unlikely.

This might of course change and I might think differently in a few weeks but my current estimate for this month in general is positive and quite bullish. It's entirely possible that this is the last crash we're going to see in a while. But time will tell.

It's very hard to say if the price has bottomed or not. I still see a possibility of a small decline within the next 2 months, but it will be a much slower one with the price maybe bottoming at $5.xx. This is the worst case scenario. In a good scenario we get good boost this month in form of announcements of new services and good media coverage which will start an uptrend sooner.

Regardless, looking at the transaction count chart (http://pi.uk.com/bitcoin/charts/n-transactions) it will take at the most 3 months for the economic decline to run its course and after that it's entirely up to the Bitcoin community and the media to decide where it will go. From there we have basically two options, a further decline and possible true death of Bitcoin and what I think is far more likely, the flourishing of Bitcoin's potential.

Bitcoin is still fundamentally just as magnificent as it ever was. I can't see how the doomsday-bears have ever contributed anything to Bitcoin itself, they have simply been here to make easy money and now that the option of making that money from a soaring bubble price is not available they have turned to whining. Pathetic.

The price of Bitcoins fluctuates a lot because there are speculators and traders playing the market. The size of the market is still so small that only a handful of decent bankroll traders can cause big shifts in the price. Price will stabilize if and when the Bitcoin market gets bigger.

But when we talk about going down from $20 to $7, well, that's the bursting of the biggest bubble in Bitcoin history. A speculation bubble. Actually it's from the peak of $32 but anyway.

At the same time we have seen the size of the economy contract a little, as can be seen clearly from this chart: http://pi.uk.com/bitcoin/charts/n-transactions

Now we are reaching the point of a "bottom price" right now, with the amount of transactions leveling off as well within a few months for sure, possibly earlier. Then the price will start going up, probably in an unstable fashion again because there are big speculators on board. But eventually, I hope, the size of the market will increase and it'll be more difficult for people to just "play the market".

One thing is clear, if you think Bitcoin is still doing good for the long term (years), then don't worry about the current price too much. Personally I still think Bitcoin is doing really good and has so much potential which is slowly being realized. It has been a slow process with some growing pains on the way but that's natural.

[caston]

The cipher geeks say bitcoin is a good idea. Economists are almost always wrong anyway, so I'll stay with the smart money and bitcoin.

That's right. I don't know if I am getting smarter but I'm damn sure that my money is.

[Jack of Diamonds]

A lower price point at this difficulty sucks for miners, but is great for people looking to buy stuff like drugs from Silk Road.

They might be more willing to buy bitcoins at $5 a piece than 20 bucks.

[Technomage]

Surawit, I have no excuses. I was wrong with my predictions of the daily low's. However, that data is only relevant to daytraders. In most long term charts those spikes won't even be visible. I'm personally more interested in the big picture. My predictions on the big picture haven't failed, and I still stand by them. There hasn't been a stable price below $5, not even for 24 hours. And there won't be while the Bitcoin economy is as big as it is now.

I was also predicting the first high volume rally in a long time to come this week, but it already came yesterday. The big picture looks really good right now and there is reason to believe that the 4.18 was the bottom. Now is a very good time to buy, at $5.x at least.

And I'm putting my money where my mouth is, I'm currently just waiting for the price to drop a little to buy.

[Hotdog453]

A lower price point at this difficulty sucks for miners, but is great for people looking to buy stuff like drugs from Silk Road.

They might be more willing to buy bitcoins at $5 a piece than 20 bucks.

If you're looking to buy drugs from Silk Road, I highly doubt a variance in Bitcoin price is really going to hinder or appeal to you. If I want pot, I'll buy bitcoins if I need them, regardless of the price of Bitcoins; everything on Silk Road is going to vary anyways depending on the Bitcoin value.

[molecular]

A lower price point at this difficulty sucks for miners, but is great for people looking to buy stuff like drugs from Silk Road.

They might be more willing to buy bitcoins at $5 a piece than 20 bucks.

If you're looking to buy drugs from Silk Road, I highly doubt a variance in Bitcoin price is really going to hinder or appeal to you. If I want pot, I'll buy bitcoins if I need them, regardless of the price of Bitcoins; everything on Silk Road is going to vary anyways depending on the Bitcoin value.

Ya, it just changes how many BTC you need or not.  I suspect the seller and the buyers all don't care a whole lot about bitcoin either way, it's just a "safe" "anonymous" way to perform an illegal transaction.

Is the transaction itself illegal because it is payment for illegal goods?