How fast will bitcoin recover?

[Technomage]

It sounds like everyone believes price will drop if miners catch a rally. Why? They'd just stop rising. Dropping to new lows only happens when people sell at a massive loss compared to the last half year, which I hardly find a sane move.

Normally, there is no reason to shoot the other way just because a trend stops. People who follow trends will soon be negligible, because they burn their money against a trivial "buy low, sell high" bot or sane speculators, and any upward correction now would ignite that process on a much larger scale than before.


@Jonathan on Technomage:

The point is that a miner who deliberately does not sell or spend is actually a speculator. It's unlikely that someone lays out a plan to mine and sell at a loss to cover the electricity bill for mining. People who sell at a loss will shut down their mining rigs, not keep them running to crash the market. Nobody wants to continuously pay money to be able to make BTC price drop.

There's a simpler model to the whole thing. Just assume every miner sells eventually. Then, you can just cut out all details about mining and miners from the analysis, and assume a fixed BTC inflow of currently 50 BTC per block. From that perspective, it is completely irrelevant what miners do as long as they don't form a lobby and do a massive move all at once.

+1

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[Rejinx]

I know I am late to the party and while I agree with most of what you are all saying.  I think the most likely outlook for the next few years is a slow price drop back to sub $1 range, may be not for 1 year are so due to bulls jumping in thinking we are at bottom also there may be some small rallys due to news coverage.  However,  If no major outside investors come-in, and they likely won't, the price will push the GPU farms out some time in 2012 to 2013, after that I hope Bitcoin will slowly mature and raise in true value, but it could just as easy become a fad that die out or even get replaced but a kinda of Bitcoin 2.0 that has better features. All I know is the price is headed lower for a while,,,,,, barring some rich crazy person.

[wobber]

I think a lot of normal people, and by "normal" I mean "not rich" people earned a lot of money (read: unrealized profit) by being an early adopter. Many had hundreds of thousands. Nowadays, very few hav these amounts because we witness a wealth redistribution. This makes me think that major sell-off and buy-off will be less and less happening, thus making price manipulation harder and harder.

[Technomage]

I think a lot of normal people, and by "normal" I mean "not rich" people earned a lot of money (read: unrealized profit) by being an early adopter. Many had hundreds of thousands. Nowadays, very few hav these amounts because we witness a wealth redistribution. This makes me think that major sell-off and buy-off will be less and less happening, thus making price manipulation harder and harder.

This is true but for one exception. The manipulator(s). They seem to be making massive profits from day trading and their footprint in the market seems to get bigger, not smaller. To counter this we need more big players in the market to give the current ones a little more competition.

[ElectricMucus]

I think a lot of normal people, and by "normal" I mean "not rich" people earned a lot of money (read: unrealized profit) by being an early adopter. Many had hundreds of thousands. Nowadays, very few hav these amounts because we witness a wealth redistribution. This makes me think that major sell-off and buy-off will be less and less happening, thus making price manipulation harder and harder.

This is true but for one exception. The manipulator(s). They seem to be making massive profits from day trading and their footprint in the market seems to get bigger, not smaller. To counter this we need more big players in the market to give the current ones a little more competition.

Not necessarily, once people realize that they don't need to

a) Place bids before a fake buywall
b) Place sells before a fake sellwall.
c) ignore indicators

They could wrestle those assets away from them.

[dancupid]

I have to say I have a real feeling that I ought to buy a lot of bitcoins right now (though I have been drinking quite heavily). It seems to be right on the edge of it's bottom - it seems odd worrying about a few cents drop when the potential is so massive.
But still, I can't risk it - and at $5 I'll probably be saying the same thing.

[Joseph sterns]

I second the rally I think we are due for one perhaps this or next weekend. The price has been fairly stable and am sure that there are others who are thinking that this is a good time to buy as well all we need is something to trigger the movement. I've got no charts just a gut feeling I hope I'm right!

[tvbcof]

I think a lot of normal people, and by "normal" I mean "not rich" people earned a lot of money (read: unrealized profit) by being an early adopter. Many had hundreds of thousands. Nowadays, very few hav these amounts because we witness a wealth redistribution. This makes me think that major sell-off and buy-off will be less and less happening, thus making price manipulation harder and harder.

This is true but for one exception. The manipulator(s). They seem to be making massive profits from day trading and their footprint in the market seems to get bigger, not smaller. To counter this we need more big players in the market to give the current ones a little more competition.

If the 'manipulator(s)' are making massive profits, they will be joined by an increasing number of 'manipulators' (e.g., people with enough funds to move the market.)  Then they will play against each other.  I expect that that is already the case to some extent, but the trend will grow.

So, the bulk of the market participants will be well capitalized and there will be a gaggle of lesser players kind of along for the ride.  Sort of like lint blowing around which may or may not be worth sweeping up.

This outcome is not unlike the current mainstream capital markets in fact.

[tvbcof]

I second the rally I think we are due for one perhaps this or next weekend. The price has been fairly stable and am sure that there are others who are thinking that this is a good time to buy as well all we need is something to trigger the movement. I've got no charts just a gut feeling I hope I'm right!

I suspect that it is just as likely that there are more big holders that wish to liquidate and/or people who want an even bigger position who realize that one more significant decline will shake out enough more weak hands to be worthwhile.

Actually the latter may not be true.  The couple hundred thousand of BTC dropped last time barely broke the previous low, and then only for a few seconds, so the potential to manipulate sentiment downward may be over...for now.

I retain the USD funds earmarked to pick up another load in the deep $1.xx drop, but it does seem to be less and less likely that I will be deploying them.

[ElectricMucus]

I think the reason it bounced right off from 2 was bitcoinica, this was an obvious limit order, people took what they've got.
But those coins were mostly sold again right after or at the bounce to 2.4.

I think the current rise is a attempt from the bulls to scoop up stop loss orders from people who shorted @2.4. At first it looked like it might succeed but that gets more and more unlikely, as for the downcreep, time is running out for this rally. Maybe one final push and people who were smart enough to jump ship @2.2 will realize there is a second shorting opportunity.

[netrin]

One should be careful not to refer to the traders independently of the market.

[mizike29]

I honestly dont think anything is going to happen at this point.  Costs to much to create them, there really hasnt been anything to make it jump back up, and 2 bux is sitting about right and stable for awhile.  Wish I would have jumped on the 30 dollar a coin ponzi scheme when it started what the hell, missed the boat again lol

[Joseph sterns]

You don't think there is any reason to buy? What about recently when the Price dropped from 3.80 to what it is now the manipulator cashed out all there is left to do is buy buy buy. I think we will see a rally soon enough downward trend has stopped and guarantee the manipulator is looking to turn his hefty amount of cash back into bitcoins again

[Jonathan Ryan Owens]

You don't think there is any reason to buy? What about recently when the Price dropped from 3.80 to what it is now the manipulator cashed out all there is left to do is buy buy buy. I think we will see a rally soon enough downward trend has stopped and guarantee the manipulator is looking to turn his hefty amount of cash back into bitcoins again

[FlipPro]

You don't think there is any reason to buy? What about recently when the Price dropped from 3.80 to what it is now the manipulator cashed out all there is left to do is buy buy buy. I think we will see a rally soon enough downward trend has stopped and guarantee the manipulator is looking to turn his hefty amount of cash back into bitcoins again

I LOL'D

[Cluster2k]

You don't think there is any reason to buy? What about recently when the Price dropped from 3.80 to what it is now the manipulator cashed out all there is left to do is buy buy buy. I think we will see a rally soon enough downward trend has stopped and guarantee the manipulator is looking to turn his hefty amount of cash back into bitcoins again

Just because a price has fallen gives people no reason to buy back in.  We've seen plenty of examples in regards to bitcoin over the past few months.

What happens if the 'manipulator' decides to cash out his or her earnings and play in another market, such as shares, bonds or commodities?  Just because the money was made on bitcoins doesn't mean it has to stay in this market.  The guarantee that the 'manipulator' is ready to jump back in is backed by nothing.

[ElectricMucus]

You don't think there is any reason to buy? What about recently when the Price dropped from 3.80 to what it is now the manipulator cashed out all there is left to do is buy buy buy. I think we will see a rally soon enough downward trend has stopped and guarantee the manipulator is looking to turn his hefty amount of cash back into bitcoins again

Just because a price has fallen gives people no reason to buy back in.  We've seen plenty of examples in regards to bitcoin over the past few months.

What happens if the 'manipulator' decides to cash out his or her earnings and play in another market, such as shares, bonds or commodities?  Just because the money was made on bitcoins doesn't mean it has to stay in this market.  The guarantee that the 'manipulator' is ready to jump back in is backed by nothing.

forex.

He would be eaten alive. But that depends if those are his bitcoinica winnings he might even succeed. If those are early coins... no private island..

[Joseph sterns]

I believe the manipulators are getting used to making money of bitcoins if someone is making 100s of thousands off something I don't see why they wouldn't try it again looks like we spiked how high til a drop or stabilization once again