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Author Topic: Warning to the bulls...  (Read 7269 times)
mjcmurfy
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December 31, 2011, 03:48:29 AM
 #21

FUD

If you say so. If the data scares you, or makes you doubtful and uncertain, don't blame the data.
When you try to suggest that objective and empirical data is FUD, the problem is on your end my friend...

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December 31, 2011, 09:03:27 AM
 #22

...
From the data above, you can see that over the past 10 days there has been a net selling activity of $442,034, yet somehow the price has stayed at roughly the same level. There has not been one single day where the buy volume in dollars has exceeded the selling volume in dollars.

To me, this is a stark indication of profit taking. In addition, there is significant market manipulation going on keeping the price artificially afloat in order to take more and more money from buyers. Despite all the selling, it was all followed by low volume rebuys occurring right after the sales in order for the big players to 'cover their tracks' if you will.
...
That's to be expected after such a huge rally, it is also natural that it took time - because people did not know when the rally stopped.  But it is about to change - too many threads trying to talk the price down with a very small effect.
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December 31, 2011, 09:53:31 AM
 #23

They represent the active trades that have actually taken place on gox. I.e. if I buy 1btc, someone who has an unfulfilled ask sitting on the order book sells me the 1btc, but it is the 1btc buy that is being counted as the initiating trade not the other way around. If you post an order for a price that is not currently available, it will sit there until it is fulfilled. And it is the fulfilling order that is counted.

What is that supposed to imply?

I guess if you have time to wait you post an offer and if you care less about price and just want asap you go to the market. So recently the sellers have been more impatient?

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December 31, 2011, 11:20:55 AM
 #24

I am curious to why there is suddenly a spike of these "price is going down" threads. My main explanation is that some people are not happy that they missed the $2-$3 buying zone which might be never coming back. They are desperately trying to get the price lower to jump in. Not necessarily the agenda of the person who started this thread, but there is another new active poster in this forum area that is a rather obvious case.

To me the fundamentals are massively strong now and Bitcoin is going to way higher prices, on a sustainable basis. There are two important aspects to this, one is that the stronger the upswing looks like, the more traders will take a long position. I managed to take a long position a while ago actually but as it is with that type of position, I'm certainly not selling now. Nor am I selling at $5 etc. In fact I will only sell if I see a clear bubble situation, the ideal would be if I never needed to sell at all. I could simply have them as savings and use them when Bitcoin becomes more widely accepted.

The second aspect is that some people, most notably Revalin, seems to base Bitcoin fundamentals on its usage as a medium of exchange. That is a flawed approach in my opinion because Bitcoin will always be used more as a store of value so it's actually possible for bitcoins to reach quite a high value based on mostly speculation. It will require a higher sustained market cap of course so that the price is more stable and people start to keep long positions in a more patient way. But I see this happening because Bitcoin is the ultimate store of value and I'm personally very tempted to increase my Bitcoin investments even further. It simply beats everything.

The best thing about it is that it's not just a store of value, it's a very convenient money transfer mechanism as well. If it were possible, I would use bitcoins for everything. But the growth of such an economy is slow, it'll take many years even in the best case to reach that point. Before we reach a market cap high enough it's necessary to constantly look for bubbles but we're not in a bubble yet, we're in the process of recovering from a massively oversold market.

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December 31, 2011, 11:47:46 AM
 #25

I am curious to why there is suddenly a spike of these "price is going down" threads.

I think it's obvious, especially with the data provided by mjcmurphy.  Lots of people have sold in the past few weeks and they want the price to go down so they can buy back in.  Some of them are taking to the forum to try to nudge the price in the direction they want it to go.  Simple as that.
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December 31, 2011, 11:59:33 AM
 #26

I am curious to why there is suddenly a spike of these "price is going down" threads.

I think it's obvious, especially with the data provided by mjcmurphy.  Lots of people have sold in the past few weeks and they want the price to go down so they can buy back in.  Some of them are taking to the forum to try to nudge the price in the direction they want it to go.  Simple as that.

"trying" is the operative word.
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December 31, 2011, 12:01:25 PM
 #27

I am curious to why there is suddenly a spike of these "price is going down" threads. My main explanation is that some people are not happy that they missed the $2-$3 buying zone which might be never coming back. They are desperately trying to get the price lower to jump in. Not necessarily the agenda of the person who started this thread, but there is another new active poster in this forum area that is a rather obvious case.

To me the fundamentals are massively strong now and Bitcoin is going to way higher prices, on a sustainable basis. There are two important aspects to this, one is that the stronger the upswing looks like, the more traders will take a long position. I managed to take a long position a while ago actually but as it is with that type of position, I'm certainly not selling now. Nor am I selling at $5 etc. In fact I will only sell if I see a clear bubble situation, the ideal would be if I never needed to sell at all. I could simply have them as savings and use them when Bitcoin becomes more widely accepted.

The second aspect is that some people, most notably Revalin, seems to base Bitcoin fundamentals on its usage as a medium of exchange. That is a flawed approach in my opinion because Bitcoin will always be used more as a store of value so it's actually possible for bitcoins to reach quite a high value based on mostly speculation. It will require a higher sustained market cap of course so that the price is more stable and people start to keep long positions in a more patient way. But I see this happening because Bitcoin is the ultimate store of value and I'm personally very tempted to increase my Bitcoin investments even further. It simply beats everything.

The best thing about it is that it's not just a store of value, it's a very convenient money transfer mechanism as well. If it were possible, I would use bitcoins for everything. But the growth of such an economy is slow, it'll take many years even in the best case to reach that point. Before we reach a market cap high enough it's necessary to constantly look for bubbles but we're not in a bubble yet, we're in the process of recovering from a massively oversold market.

once again, Technomage is willing to take the time and effort to "explain" exactly what is happening.  i commend him for his patience and foresight.  i have already implemented his thinking.
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December 31, 2011, 12:05:20 PM
 #28

I am curious to why there is suddenly a spike of these "price is going down" threads.

I think it's obvious, especially with the data provided by mjcmurphy.  Lots of people have sold in the past few weeks and they want the price to go down so they can buy back in.  Some of them are taking to the forum to try to nudge the price in the direction they want it to go.  Simple as that.

It could be in part because, we have seen many instances, where the price rises, and is short lived at the higher level. We're all kind of used to this routine, or maybe expect it. When the big player(s) dump massive amounts of coins, some lose big, and we are all trying to avoid that.

As I write this, the wall at $4.30 was just breached!  Grin

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December 31, 2011, 12:07:54 PM
 #29

I posted these charts in another thread, but thought I might as well go ahead and create a new home for them. I have been collecting data on the order book depth on MtGox, in addition to actual trading activity, since around the 14th of December and I have created a few historical charts that might be of interest to some of the traders here. I am not trying to spread FUD, I am trying to provide data. Make of it what you will.



This graph shows the total bitcoin supply in red, adjusted to fit on the scale of the mtgox supply figures in blue. This chart shows a significant divergence between the total available supply, and the total actual supply visible on mtgox's order books. As you can see, the gap has just today started to close. What this indicates to me is that a significant amount of the mined coins have been held over the past few weeks, and a correction is overdue... but on it's way.



These charts show the historical total aggregate demand in dollars as well as the total mtgox supply.



These charts show the daily change in both supply (figures in btc) and demand (figures in $).

Trade volume activity (collected since the 21st):

21/12/2011 15:53 - Bid (buy) Volume: $92607, Ask (sell) Volume: $108854 => Net $16,247 sell
22/12/2011 23:58 - Bid (buy) Volume: $83754, Ask (sell) Volume:  $188171 => Net $104,417 sell
24/12/2011 11:52 - Bid (buy) Volume: $124414, Ask (sell) Volume: $159448 => Net $35,034 sell
25/12/2011 16:00 - Bid (buy) Volume: $116765, Ask (sell) Volume: $143122 => Net $26,357 sell
26/12/2011 13:30 - Bid (buy) Volume: $134398, Ask (sell) Volume: $188173 => Net $53,775 sell
27/12/2011 23:59 - Bid (buy) Volume: $166066, Ask (sell) Volume: $193020 => Net $26,954 sell
28/12/2011 05:45 - Bid (buy) Volume: $174779, Ask (sell) Volume: $198527 => Net $23,748 sell
29/12/2011 21:20 - Bid (buy) Volume: $203902, Ask (sell) Volume: $228877 => Net $24,975 sell
30/12/2011 23:59 - Bid (buy) Volume: $203871, Ask (sell) Volume: $334398 => Net $130,527 sell

From the data above, you can see that over the past 10 days there has been a net selling activity of $442,034, yet somehow the price has stayed at roughly the same level. There has not been one single day where the buy volume in dollars has exceeded the selling volume in dollars.

To me, this is a stark indication of profit taking. In addition, there is significant market manipulation going on keeping the price artificially afloat in order to take more and more money from buyers. Despite all the selling, it was all followed by low volume rebuys occurring right after the sales in order for the big players to 'cover their tracks' if you will.

This stinks of an impending fall back to lower price levels, because you can only mislead bulls for so long before they either run out of money or rationality kicks back in.

Take this data for what you will, but I think it speaks for itself. I have no idea what way the price is going to go right now, but considering the fact that the MCAD is showing 39 days of positive price divergence, and the RSI has been >70 for 12 days, I know which direction I am betting on.

Make sure you get yourself onto the right side of the market soon.

oh no! Wink  (you know i love u Man)
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December 31, 2011, 12:15:26 PM
 #30

LOL, Spring is here!
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December 31, 2011, 12:16:23 PM
 #31

seriously guys; watch out for the Double Ramp...
mjcmurfy
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December 31, 2011, 12:18:26 PM
 #32

They represent the active trades that have actually taken place on gox. I.e. if I buy 1btc, someone who has an unfulfilled ask sitting on the order book sells me the 1btc, but it is the 1btc buy that is being counted as the initiating trade not the other way around. If you post an order for a price that is not currently available, it will sit there until it is fulfilled. And it is the fulfilling order that is counted.

What is that supposed to imply?

I guess if you have time to wait you post an offer and if you care less about price and just want asap you go to the market. So recently the sellers have been more impatient?

I'm not trying to imply anything. That post was in response to PatrickHarnett's question.

@tehnomage: I'm not curious why there has been a recent increase in the number of bearish threads, isn't it pretty obvious? For the same reason that the bulls are constantly posting threads about the 'rocket taking off'. We have reached the peak of this rally according to some, and they are trying to get their arguments across.

What I have done is try to be as neutral as I could with this thread (as much as I can, it is impossible to eliminate bias) and let the data speak for itself. It's limited I'll grant you, but certainly should give even the most ardent and blinkered bull pause for thought.

After an increase of almost 100% over the past month, there is naturally going to be a price correction back to lower levels, and if this is true growth it will continue up again from there. This has absolutely nothing to do with bitcoin's suitability as a currency, it is as a result of market speculation. The price has to be tested in both directions if growth to continue.

I don't think any of the bears here believe that bitcoin is doomed. I certainly don't, and I know that I am only temporarily a bear. I am a long term bull, but also a realist. I think in fact that the bears actually believe more firmly in the future success of bitcoin than the bulls, because they want more btc, while the bulls only care about their fiat profits! Kind of ironic, eh?

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Technomage
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December 31, 2011, 12:40:23 PM
 #33

I think in fact that the bears actually believe more firmly in the future success of bitcoin than the bulls, because they want more btc, while the bulls only care about their fiat profits! Kind of ironic, eh?
I disagree. According to a fairly recent poll, most people in this forum are mainly trading for more BTC. But that is sort of too black and white, at the end of the day what I care about is my purchasing power and the value of my investment in general. I see it as only temporary that we need to think so much about the fiat value of our BTC, if Bitcoin continues to grow we won't have to, eventually.

The correct way to think about it is that the value of your BTC increases, in general. It increases in relation to everything. Not only in relation to dollars or euro. Bitcoin still has very limited usability as a medium of exchange so it's clear that we need to compare it to fiat, at least somewhat, but that's something I hope will continue to become a smaller issue in the years to come.

As far as who's bear and who's not, it depends. I'm of course a long term bull, always have been, but I did revert to bear in the short term in the time between September and November. Now I've been a bull on all levels for a while again because I see that the trends are changing. And my long term view is actually more bullish than it has ever been, my confidence that Bitcoin will actually amount to something, has increased.

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December 31, 2011, 12:43:16 PM
 #34

seriously guys; watch out for the Double Ramp...

What is this "double ramp" you speak of?

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December 31, 2011, 12:47:00 PM
 #35

seriously guys; watch out for the Double Ramp...

What is this "double ramp" you speak of?

about 10d ago we had one of enormous proportions.  the strategy circulating around here at the time was sell or short into all spikes since they inevitably come back down.

at the time the price had been stuck @ 3.2 and the MCO had decreased to unsustainable levels.  i could see that a big move was imminent and indeed it spiked to 3.7.  as the sellers and shorts stepped back in and brought the price back down to 3.5, a second ramp occurred taking the price to 4.5. 

the sellers/shorts were essentially assed raped.  as i'm typing this we're seeing it again...
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December 31, 2011, 12:55:03 PM
 #36

seriously guys; watch out for the Double Ramp...

What is this "double ramp" you speak of?

about 10d ago we had one of enormous proportions.  the strategy circulating around here at the time was sell or short into all spikes since they inevitably come back down.

at the time the price had been stuck @ 3.2 and the MCO had decreased to unsustainable levels.  i could see that a big move was imminent and indeed it spiked to 3.7.  as the sellers and shorts stepped back in and brought the price back down to 3.5, a second ramp occurred taking the price to 4.5. 

the sellers/shorts were essentially assed raped.  as i'm typing this we're seeing it again...

Thank you for clarifying! That's what I was thinking, but wasn't too sure. I've got caught in those a couple times, in fact, the one you're referring to. Luckily, I managed to get back on with a slight gain.

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December 31, 2011, 12:55:21 PM
 #37

I disagree. According to a fairly recent poll, most people in this forum are mainly trading for more BTC.

I know. That was my poll thread actually.

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December 31, 2011, 12:58:16 PM
 #38

seriously guys; watch out for the Double Ramp...

What is this "double ramp" you speak of?

about 10d ago we had one of enormous proportions.  the strategy circulating around here at the time was sell or short into all spikes since they inevitably come back down.

at the time the price had been stuck @ 3.2 and the MCO had decreased to unsustainable levels.  i could see that a big move was imminent and indeed it spiked to 3.7.  as the sellers and shorts stepped back in and brought the price back down to 3.5, a second ramp occurred taking the price to 4.5.  

the sellers/shorts were essentially assed raped.  as i'm typing this we're seeing it again...

Thank you for clarifying! That's what I was thinking, but wasn't too sure. I've got caught in those a couple times, in fact, the one you're referring to. Luckily, I managed to get back on with a slight gain.

i forgot to mention that the Bitcoinica users were hit especially hard as Zhou's algorithm took the price to 4.95 at the time, LOL!

so many ppl got liquidated in that one and he even had to reverse some trades.  i don't think he should have done that b/c once you capitulate to clients like that, you're doomed to having to do it again.  he is creating a problem for himself.
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December 31, 2011, 01:01:27 PM
 #39

i dare say an apology is coming from somewhere!
mjcmurfy
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December 31, 2011, 01:59:36 PM
 #40

i dare say an apology is coming from somewhere!

I'll wait a few days and eat my hat if I am wrong. I don't have a problem with being proved wrong. Anything that strengthens the bitcoin economy is good, even if I have made a balls of my trading decisions. There is nothing stopping me from buying back in, but I still think my data will be proved correct at least to some extent. This could well be the last push. The only thing I wish is that I had waited a little longer.

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