How fast will bitcoin recover?

[wobber]

Assuming it will recover, do you think it will a slow-paced increase over years or we'll see prices doubling every week?

I strongly feel that the next year will be decisive. Once global economy goes in the second wave of crisis, people will move away from fiat and stocks. Also next year is the halving to 25 BTC per block.

[Hotdog453]

The market is shallow enough it could double and triple amazingly easy, with an amazingly little amount of capital added.

I have no doubt people might "move away from fiat and stocks", but I think it's a huge leap to think "and move to some stupid Bitcoin currency instead".

[netrin]

I believe the rate of increase will be greater than the rate of decline since June. Gains will start out slowly, but more than double monthly before correcting again from triple digit heights, or higher.

[Bigpiggy01]

I believe the rate of increase will be greater than the rate of decline since June. Gains will start out slowly, but more than double monthly before correcting again from triple digit heights, or higher.

You need to revisit those transfer figures (as an estimate of potential value) you looked at earlier 

[netrin]

what's a transfer figure?

[Bigpiggy01]

You did a fantastic breakdown of BTC value as figured out in SWIFT transfer fees about 2 months ago I can't find the thread though 

[trogdorjw73]

The reason for the BTC spike was that it was something new that had gained some value and it caught the attention of someone with enough money to invest a big chunk of cash (well, big relative to what I have). That investment sparked interest from a larger crowd as well as the community, and they thought, "OMG this stuff is really taking off and will be worth tons of money -- BUY BUY BUY!" That same thing could happen again, true, but I doubt it will be quite so dramatic. People are skittish and we have not sustained any upward movement for more than a month since the crash. I'd say we'll need several months of slow but steady upward movement before anyone is willing to risk even a moderately large investment. Plus, if we started to see a spike up above $5, many miners would cash out their reserves as that would mean they were making a healthy 100% profit over current rates. I'll be surprised if we see sustained rates above $5 any time in the next year.

[netrin]

Oh thanks, well I can only estimate the potential value to an individual actor given current financial actions, but I have no way of calculating velocity of money nor size user base. This?:

I believe Satoshi was correct to bestow an eventual greater role to transaction fees over block rewards. When a transaction has a cost, then we can measure the market value of a bitcoin transaction. Unfortunately the value of a bitcoin is more difficult to measure because the cost of a transaction is generally independent of the number of bitcoins sent. The inherent value of a bitcoin is not the cost of electricity, it is only the utility value of the secure transactions that bitcoin make possible.

An international bank transfer cost me 5 EUR and took a short week. Apparently I'm willing to give my credit card company 2% of my instantaneous purchases, perhaps 0.5 EUR per transaction. A one hour confirmed bitcoin transaction costs (at most) 0.0005 BTC. Even if bitcoin were used only as a transaction protocol, we never denominated prices in bitcoin, but could be used everywhere credit cards are accepted today, would 1 BTC = 1000 EUR ? I think I'm bullish again!

@Trogdorjw73: You just described Elliott wave sentiment perfectly. The initial gains will be shallow with bear traps along the way, but once the third major wave catches momentum, it will make the pre-June wave look flat!

[SaintFlow]

As fast as people are willing to take more money to the exchanges
in relation to how fast you are not offering yours for sale at any price.

Directly or indirectly convince more people to do so.

[trogdorjw73]

I don't believe in Eliot Waves, particularly as it applies to BTC. For stocks, it's still fuzzy math and statistics, but BTC is different enough that while we certainly have seen spikes and volatility, it's too much of both for me to think anyone can predict it with any sense of certainty. As I said, I'll be shocked if we get to $5 in 2012, let alone sustain that value. If the future proves me wrong, I'll happily power up some of my mining rigs again.

[netrin]

Well I suppose if you believe bitcoin is on a steady trend to zero, then my charts with perfectly predictive lucky analysis over the past month won't convince you of anything.

[Vandroiy]

@trogdorjw73:

I'm really not a friend of chartism, it's mostly voodoo, and I'd usually never get the idea of defending it. But if that kind of analysis works anywhere, then it would be Bitcoin in the last half year. I actually made an exception in June, and started timing the bubble using charts. It worked extraordinarily well, which might not be a coincidence.

Why? Because the psychology of inexperienced traders was, and maybe still is, unusually strong in this market. A horde of people on here can overwhelm powers that identify repetitions of past mistakes. In addition, Bitcoin is high-risk, which lowers the buy-in of educated traders, and low-volume, which removes the most experienced traders.

That said, any pattern found by now will still be purged very soon, because fools burn money exponentially. So whoever can still profit directly from chart analysis should better do it fast. I'm already dropping it again, returning to fundamentals.

[S3052]

If we will enter the big third wave III since start of bitccoin trading, then the "recovery" will be VERY FAST and VERY SHARP

[notme]

If we will enter the big third wave III since start of bitccoin trading, then the "recovery" will be VERY FAST and VERY SHARP

What price confirms this?

[ElectricMucus]

I am beginning to think bitcoin will do what S3052 says, not because of the underlying technicals but because his subscribers have the deepest pockets.

The recent rally, because a steep trendline was broken was an excellent example. Since I am not into paying him the fees he want I will leave if I get liquidated because of his "predictions".

Thanks for nothing. (Oh I am not the first person to pile on top of the self fulfilling prophecy crowd)

On second thought I might just subscribe... consciously paying danegeld.  

[ThomasV]

oh that was fast:

http://bitcoincharts.com/charts/bitmarketEUR#rg60zvztgSzm1g10zm2g25

 

[bitcon]

as fast as the manipulator will allow it to.

[Cluster2k]

Assuming it will recover, do you think it will a slow-paced increase over years or we'll see prices doubling every week?

I strongly feel that the next year will be decisive. Once global economy goes in the second wave of crisis, people will move away from fiat and stocks. Also next year is the halving to 25 BTC per block.

Halving of the block reward from 50 to 25 may in fact lower the price of bitcoins, not make them more expensive.  Less reward for miners = less return per kilowatt spent on power.  I would be glad to return to this quote in a year's time and see whether it's true.  I honestly think it is.

A similar argument was once made for the difficulty rating, where some argued a higher difficulty rating justified higher pricing.  We've seen that works in the opposite way: a high difficulty yields less BTC per kilowatt of power, causing miners to drop out until difficulty falls in line with the price.  The price didn't chase difficulty: miners chased the price and caused difficulty to go higher.

There are only two things that will make bitcoin retrace some of its former highs:

1) Major retailers getting on board and using bitcoins.  Not 'mom 'n pop' internet stores selling trinkets, but serious businesses with large turnovers.

2) Another speculative bubble based on potential future uses.  This one is unlikely to reoccur.  Burst bubbles rarely reinflate using the same arguments or reasons as speculators are naturally very wary.

[Vandroiy]

ElectricMucus, bitcon:

Please get over it. No manipulator using normal trade, neither S3052 nor a postulated magic megatrader has the power to change the market on a large scale, even on the mid-term. The only exception would be a big speculator who only ever buys.

And if you really detected a manipulator, take his money already. If you see him and what he does, it is pretty much by definition of manipulation possible to profit from the knowledge. Exponentially drain his money, and I'll believe you, not that it matters after you've made 6-to-7-digit profits.

Sometimes I'm not so sure how many noticed that most posts on "the manipulator" are just a parody all the conspiracy theories about Gox. Hardly anyone takes that seriously outside troll mode. Sure, a few people tried manipulation more or less successfully, but quickly depleted their prey and strengthened calm traders in the process.

[ElectricMucus]

I don't say that there is a single person doing all this. I simply suspect that S3052s subscribers represent the largest and best funded group of traders.
Look at the current rise from 2.2: It is dominated by 3 Volume spikes most likely consisting of 3 large buys.

And one other thing: Some person is engaging in manipulating or "shaping" bitcoincharts Volumes to make them less reliable. 2 days ago the Gravestone Doji was carefully made to have bullish volume and yesterday there was a large buy at 11:59:59 to make the candle higher.

The pattern normally suggest a bearish trend and the indicators I use point to it, but nevertheless the price went up today. This could simply be people reading the information published on S3052s website while his subscribers get a more detailed prediction of what would happen and would bet against them. (So they have more information (or less misleading) and get a better price)

I also think the whole process increases volatility to these unusual levels.