This lack of volatility almost makes Bitcoin look... civilized

[evoorhees]

The past week has been remarkably calm, with the price sticking in $3.16-$3.21. It "feels" calmer than I've ever seen it. It's almost as if... dare I say... the marketplace has found an appropriate price given the current economy + NPV of future economy.

It's almost like Bitcoin has become... a civilized asset.

Certainly, it won't stay like this. But, I must say I'm enjoying this current oasis. RIM, gold, and the EUR have been more wild in recent days.

That such a speculative asset like a bitcoin can enjoy stable value - if only for a matter of days - is quite remarkable.

Thoughts?

[zhoutong]

This is definitely remarkable, but I'm sure it's temporary too.

Bitcoin can almost never gain stability unless: 1) the price rises to above $100, or 2) it dies.

The potential instability is still there until the price is high enough to push market cap to an astronomical number.

[bittenbob]

I believe we have reached the area of true value for Bitcoin. I don't expect to see any major bubbles unless something happens. I also do not expect any sustained values below $3 for longer than a day in the foreseeable future. From the moving averages it really appears we have hit a bottom or market reversal. I am more inclined to believe we will stay around the current price for the near term.

[ineededausername]

You're reading too much into this.  Look at the volumes:
http://bitcoincharts.com/charts/mtgoxUSD#rg60ztgSzm1g10zm2g25zv
People are leaving for the holidays... anyone see those straight lines on mtgoxlive?
When all the traders and speculators come back, we'll see real price movement again. 

[old_engineer]

It is nice.  There is precedent though, as stability like this happened once before in July, with a similar percentage range:



What happens next depends on the next big player: is it someone dumping another 20k coins, or buying up 20k coins?
I could see price dropping to $2.5 again, or jumping to $4.

[ineededausername]

It is nice.  There is precedent though, as stability like this happened once before in July, with a similar percentage range:



What happens next depends on the next big player: is it someone dumping another 20k coins, or buying up 20k coins?
I could see price dropping to $2.5 again, or jumping to $4.

Dumping 20k? Still stable at 3.10.
In fact dumping 40k would take us to 3.00.
60k would take us to 2.95.  Still within sight of $3.

On the other hand, buying 20k would take us to 3.35.  Buying 40k... 3.75.

[adamstgBit]

You're reading too much into this.  Look at the volumes:
People are leaving for the holidays... anyone see those straight lines on mtgoxlive?
When all the traders and speculators come back, we'll see real price movement again.  

I like this explanation, the speculator are taking a 2 week break...
Question now becomes where they holding coins or USD b4 leaving?  

I'd like to think we've had stable prices because there is a lot of poeple buying things with their bitcoins

customer buys bitcoins at market rate and buys a gift with bitcoins right way
merchant sells the bitcoins at market rate right away

if enough of this is going on... the current price wtv it may be, is supported & stabilized.

I really should buy some bitcoins just to buy gifts.... i like buying things with my visa card because i get 1% cash back  

[netrin]

customer buys bitcoins at market rate and buys a gift with bitcoins right way
merchant sells (keeps) the bitcoins

My sales have gone up quite a bit in the past month. Some newbies ask if I'll accept PayPal, etc, to which I answer 'no'. They go off to convert paper to digital and the economy grows. I presume other merchants will say the same.

[DarkEmi]

My opinion :

When bitcoin had more variance, there was a lot of people dumping coin (omg ! i am rich !) and a lot of people randomly buying the most coin they could with the bandwagon, without paying too much attention to the price.

I believe a lot of those coins are now in the hands of market makers and that the float (the coins and $ available for trade on the market) has increased as well. So now someone dumping 20k randomly in a panick movement doesn't have an huge effect anymore.

So now we should except less volatility : with enough speculators, day like we seen some time ago where the price did 30 => 9 => 25 seems almost impossible. Those were merely possible because "traders" (lets say : THE MANIPULATOR) weren't a great part of the market.

In my opinion bitcoin was and still is a traders dream : Very low trading fees and insane volatility (usually), what trader wouldnt want that ?

Of course "real" traders (ie those with banks funds or their own assets, called "proprietary traders") are largely a legend, 98% of them are merely orders followers for clients and salesmen ("buy me this or this").
I just think there is enough small-time speculators wanting in for a profit.

Well.. that or the manipulator is tricking us for his next scheme 

[DarkEmi]

But i think we are moving towards UP. The speculators-wall are moving from 3.X onto 3.10 and lower as they are downed.

We can see that most of the trades these last days are onto the ask side.

Hopefully we can keep at 3 (or even better lower xD) for a few month still I have more coins to buy

[edd]

customer buys bitcoins at market rate and buys a gift with bitcoins right way
merchant sells (keeps) the bitcoins

My sales have gone up quite a bit in the past month. Some newbies ask if I'll accept PayPal, etc, to which I answer 'no'. They go off to convert paper to digital and the economy grows. I presume other merchants will say the same.

Ditto.

[da2ce7]

Anecdotally, I have been talking to quite a few of the established bitcoin-shops; it seems that buying volume is has been slowly increasing over the last month.

I really am thinking that it will take more and more bitcoin to drop the price back down to 2.5  At some point it will take such a large % of the total market cap to shift the price large amounts.

Ideally we want the collected order-books to have move than the total issued Bitcoin holdings… so we know if every Bitcoin was spent how far the price would drop. (Not that would ever happen).

[P4man]

Its as stable as this:


All it needs is a small push in either direction and then the speculation will take off again, because bitcoin is inherently instable, certainly the way its currently used (ie, hardly used, mostly hoarded and speculated with).

[proudhon]

Its as stable as this:


All it needs is a small push in either direction and then the speculation will take off again, because bitcoin is inherently instable, certainly the way its currently used (ie, hardly used, mostly hoarded and speculated with).

+1

[ineededausername]

Its as stable as this:


All it needs is a small push in either direction and then the speculation will take off again, because bitcoin is inherently instable, certainly the way its currently used (ie, hardly used, mostly hoarded and speculated with).

+1

+1 again.  We've seen metastability before

[Vandroiy]

I don't think the image is right. We're already converging into some direction, we just don't know which yet. The system has become larger, it now has a massive amount of inertia.

That said, a little punch into either direction will not cause sudden accelerated hyper-huge movement. Yes, we may see another correction one way or the other, but I doubt we'll see positive feedback loops at the speed we had before. Remember that a good bit of immaturity has been purged from the market by now; people think twice before hopping onto a trend now.

It's good. Things have turned out quite well. Unless there's a catastrophe around the corner, Bitcoin has achieved an unprecedented state of maturity; software support is better, sensitivity to larger orders was reduced, volatility is lower. A more liquid, more robust market than before.

Let's wait for the whole stuff to settle, until the new year begins. If things are still as sane then, we have reason to celebrate.

[RodeoX]

I'm not entirely convinced of the Holliday theory. I will out of the USA during the holidays. But I will still be checking prices and buying, if a deal is to be found.

[adamstgBit]

[JohnOliver]

A rollercoaster building its own tracks? That's...that's just like the blockchain!

[cloon]

I'm not entirely convinced of the Holliday theory. I will out of the USA during the holidays. But I will still be checking prices and buying, if a deal is to be found.

+1 so, what are you waiting for? buy, and the rainbow will shine! ;-)