Simple supply, demand, price question

[rageofreason]

If I look at bitcoin price over the past 3 months it's been in the $500- $1000 band, That's huge volatility by anyone's standard, but I have a question for others who understand the supply/demand/price relationship better than I do: why hasn't bitcoin price been rising rapidly for the last 3 months? Surely it must be that demand is rising, at best, with supply (about 10% p.a. by my reckoning). Hardly meteoric. What am I missing? Is this a temporary lull? Have we run out of early adopters and are at the foot of Geoffrey Moore's chasm?

[virtuexru]

If I look at bitcoin price over the past 3 months it's been in the $500- $1000 band, That's huge volatility by anyone's standard, but I have a question for others who understand the supply/demand/price relationship better than I do: why hasn't bitcoin price been rising rapidly for the last 3 months? Surely it must be that demand is rising, at best, with supply (about 10% p.a. by my reckoning). Hardly meteoric. What am I missing? Is this a temporary lull? Have we run out of early adopters and are at the foot of Geoffrey Moore's chasm?

Rise of alt-coins are diluting BTC's value/consumer base. Forensics have shown this to be true.

[s_s]

At the moment the vast majority of BTC transactions are associated with speculative investment (people are "adopting" based on the expectation of "future" demand).

There is no other significant external increase in "demand"...and won't be until there is significantly increased adoption and demand for Bitcoins to handle the increased transaction intensity.

To some extent the current price of a Bitcoin already has factored in some level of increased future adoption and demand...at least in my own mind. The current market cap of Bitocin far exceeds what is needed for the current level of transactions.

[franky1]

If I look at bitcoin price over the past 3 months it's been in the $500- $1000 band, That's huge volatility by anyone's standard, but I have a question for others who understand the supply/demand/price relationship better than I do: why hasn't bitcoin price been rising rapidly for the last 3 months? Surely it must be that demand is rising, at best, with supply (about 10% p.a. by my reckoning). Hardly meteoric. What am I missing? Is this a temporary lull? Have we run out of early adopters and are at the foot of Geoffrey Moore's chasm?

1) miners use to hoard coins for high prices. now they are cashing out as fast as they can. they dont see the benefits of bitcoin, they are purely in it for the fiat income.
2) empty gox customers who use to store bitcoins for retirement got a sad awakening a couple months back, so again they have lost the faith and cashing out
3) in a dozen countries its nearing the next financial year, so people are cashing out so they can put their profits against their initial investment to maxmise tax discount, if they waited until after the financial new year they cant off set the profits against the previous year (now), these people will probably re invest after the financial year date depositing the large profit from last year in. to be an offset against next years profit
4) many newbies never learnt about paper wallets/cold store. and with all the 3rd party drama lately (more so then just point 2.) a few dont want to trust blockchain.info or other 3rd parties with their funds. and instead of storing in paper wallet form, they cash out.
5) altcoins causing people to spend their bitcoin on altcoins instead of the main BTC/Dollar markets, diluting the volume
6) exchanges use to have alot of volume sat on the buy order lists. now exchanges volumes are alot lower, making it easier for sellers to eat up those buy orders (as explained in points 1. and 5.)

i know bitcoin will continue and value will rise, we just need to allow these emotional newbies to vacate the economy and be replaced with smart and business minded new investors

[Bit_Happy]

Jan 2013 BTC was barely over $10
It appears to me that demand is way up.

[rageofreason]

Jan 2013 BTC was barely over $10
It appears to me that demand is way up.

Agreed for 2013, I was just puzzled by the last 3-4 months of flatness (by bitcoin standards!). In a way you're reinforcing my question; the 2013 rise was through a huge increase in demand. It seems nothing got in the way of the overall price rise.

Great explanations / hypothesis everyone. My takeaway is that although aggregate demand is steady(ish) transaction volumes may indicate a rotation of ownership as franky1 indicates.
Just had a look at the transaction charts here
https://blockchain.info/charts/n-transactions-excluding-popular?timespan=60days&showDataPoints=false&daysAverageString=7&show_header=true&scale=0&address=
but I can't conclude with confidence it supports the rotation hypothesis....will stare at it a bit longer 

[coinyear]

BTC has passed its prime time, at the beginning of its price make a spurt of progress, but when it does not have how many people to pay attention to. Now it was almost dying.