Warning to the bulls...

[deltanine]

I will, once the price is a little more realistic again! If I bought now, I'd just be giving my money directly to you, then be on the losing side once again when the price falls. I won't say it's not torture, but I made 95% profit already, and I'm happy with that. I'll wait, I have faith in the data...  

i guarantee you won't be buying them from me.  i already made it clear i was holding for much higher prices.  seriously; i don't trade.

Buy and hold isnt a smart trading method. But whatever.

What difference does it make whether it's a smart trading move or not?  Seems to me he made it clear that he wasn't trading.

seriously; i don't trade.

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[cypherdoc]

I will, once the price is a little more realistic again! If I bought now, I'd just be giving my money directly to you, then be on the losing side once again when the price falls. I won't say it's not torture, but I made 95% profit already, and I'm happy with that. I'll wait, I have faith in the data...  

i guarantee you won't be buying them from me.  i already made it clear i was holding for much higher prices.  seriously; i don't trade.

Buy and hold isnt a smart trading method. But whatever.

thats the prevailing wisdom in todays stock mkt.  but i don't think it pertains here with Bitcoin when there's so much potential.  that doesn't mean you're not smart enough to trade the swings but for me its just not worth the risk of being left behind.

[Epoch]

you forgot, that by definition a bitcoin mining person is a bitcoin bull. why sell if prices continue to grow? 

Not really. Miners fundamentally don't care if the BTC exchange rate stays flat, drops, or goes up. What matters (for most, not all) is profitability. Profitability is proportional to Difficulty and the BTC exchange rate (adjusted by operating costs such as electricity and equipment depreciation, but let's keep it simple). As long as they are profitable enough, they mine.

And to offset their operating costs, they must sell BTC whether the market is rising, dropping, or stable.

[anu]

Buy and hold isnt a smart trading method. But whatever.

Bitcoin is different from the stock market. The price can go anywhere, any time. If Jeff Bezos wants it at $1000 because he needs the volume for Amazon it'll be there before you know it. If that happens when you're empty, with what will you shoot?

[mjcmurfy]

Supplies on MtGox will be increasing from today onwards, I'll wager.



You can see that on the 31st, the daily bid (buying) volume briefly exceeded the ask (selling) volume, but it immediately went straight back to the way it has been for days with the asks greatly exceeding the bids. I honestly cannot understand why so many of you people are buying when it is clear as day that there is some major cashing out going on at overinflated prices.

Buyers are getting absolutely fleeced at the moment. If you would all just have a little patience, you will get these coins for MUCH cheaper very soon.

Ahem...
We still have a ways to fall yet.

[mobodick]

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.

Have you considered that despite the low price of last couple of months most miners kept mining (presumably at a loss) ?
Now the price rose to levels where they can pay off electricity.
I'd guess this is a pretty strong force against a bullish crowd.

And your data is inadequate to predict anything spectacular about the recent uptrend.
Take a look at this: http://bitcoincharts.com/charts/mtgoxUSD#rg60zig30-minztgCzm1g10zm2g25zvzl
If you look at the last two months in log scale you see a pretty straight line up with pretty well defined support and resistance.
This is a pretty strong movement!
Now take a look at this graph: http://bitcoincharts.com/charts/mtgoxUSD#tgCzm1g10zm2g25zvzl
Notice that bitcoin, overall, behaves pretty predictably and that halfway november a trend-change had occured.
And if there is rationale for being bullish then this is it, i guess.
Looking at the flexibility of bitcoin price there is no reason to think the selloff will change this trend.
The bulls will win.

Also, the price is yet to fall below the support.
Once it's below 4.2 or so you MAY be on to something.
But for now, i think your imagination has the upper hand.

Sure, there is possibility for manipulation, but this has a limit and the price fluctuates (at the moment) within a channel.
No need for mass panic or paranoid accusations yet.

[mjcmurfy]

Have you considered that despite the low price of last couple of months most miners kept mining (presumably at a loss) ?
Now the price rose to levels where they can pay off electricity.
I'd guess this is a pretty strong force against a bullish crowd.

Yes, miners have continued to mine and one of the points I was trying to make is that the data would seem to show that many of these coins have been held off the markets, considering the large divergence between total supply and the supply levels on MtGox - to the tune of almost 250,000 btc. Now that the price has risen, I would expect at least some of these coins to show up soon.

And your data is inadequate to predict anything spectacular about the recent uptrend.
Take a look at this: http://bitcoincharts.com/charts/mtgoxUSD#rg60zig30-minztgCzm1g10zm2g25zvzl
If you look at the last two months in log scale you see a pretty straight line up with pretty well defined support and resistance.
This is a pretty strong movement!
Now take a look at this graph: http://bitcoincharts.com/charts/mtgoxUSD#tgCzm1g10zm2g25zvzl

Believe me... I have looked at every chart you can imagine and came up with a few of my own too. Yep, it has been a pretty strong month, but we all know what follows strong rallies and we also know that logarithmic advancements are unsustainable.

I am not trying to predict anything about the uptrend, other than trying to illustrate the fact that there is persistently more selling going on than buying and highlighting the stark divergence of supply on mtgox to the total number of bitcoin in existence. I don't have the data from the beginning of the rally, but this is behavior that occurs at the top of a peak, not the bottom.

Notice that falls have been sharply and abruptly corrected over the past few weeks, even sometimes in contradiction of the RSI and MCAD indicators which then turn out strangely kinked. I know that these indicators are of questionable value in a market as small as this, but despite that, many people still rely on them to make their trading decisions.

Also, the price is yet to fall below the support.
Once it's below 4.2 or so you MAY be on to something.
But for now, i think your imagination has the upper hand.

Sure, there is possibility for manipulation, but this has a limit and the price fluctuates (at the moment) within a channel.
No need for mass panic or paranoid accusations yet.

You have indeed said it, manipulation has a limit and there is only so long that market participants can be hoodwinked before it becomes too costly to continue. I think we are reaching that limit (if we have not already) and am seeing many signals of an overbought market. What is the point of waiting until a fall back to 4.2 to act? The whole point is to try and assess the status of the market in advance of large movements. I prematurely sold at $4.3, but had still made 95% profit on my trade so was happy to exit at that point.

As I have already said, buyers are currently being fleeced at $5 prices. I don't have any inside information to back up my claim of manipulation, but considering what has been going on over the past 6 months, I don't think any of us are in any doubt that it is occurring. I think the $2.20 support is going to be re-tested over the coming weeks because despite the slow and steady uptrend over the past month, I think has been largely unconvincing and it could easily represent a change in manipulative strategy rather than true growth. If it has been true growth, what exactly is it that has been driving it? Nothing has changed as far as I can see. I think we all need the assurance of a bottom before the price can rise much further.

[mjcmurfy]

Almost forgot todays chart updates. Supplies are indeed increasing:

[mjcmurfy]

Triple post I know, my apologies. But I have an addendum:

Bitcoin is a fantastic, world-changing technology. But a few people are getting WAY ahead of themselves. The price of a bitcoin cannot be supported by wishes and dreams. In the end, the market will decide a price that is reflective of the underlying bitcoin economy. Bitcoin can be used as a viable trade medium at any price, granted, but at the same time it will not, and cannot, be held artificially afloat for long.

At an exchange rate of $5, $36,000 of new money must enter the marketplace every single day (including weekends) in order to support this price, let alone drive it further. That is $252,000 worth of brand spanking new fiat entering the system every week just to sustain the current price at a fundamental level. Does anyone think that we are truly seeing investments of this magnitude?

[Crypt_Current]

Almost forgot todays chart updates. Supplies are indeed increasing:

* shrug *  looks like bids & asks are both increasing?  correct me if i'm wrong; i'm no chart expert

[notme]

Triple post I know, my apologies. But I have an addendum:

Bitcoin is a fantastic, world-changing technology. But a few people are getting WAY ahead of themselves. The price of a bitcoin cannot be supported by wishes and dreams. In the end, the market will decide a price that is reflective of the underlying bitcoin economy. Bitcoin can be used as a viable trade medium at any price, granted, but at the same time it will not, and cannot, be held artificially afloat for long.

At an exchange rate of $5, $36,000 of new money must enter the marketplace every single day (including weekends) in order to support this price, let alone drive it further. That is $252,000 worth of brand spanking new fiat entering the system every week just to sustain the current price at a fundamental level. Does anyone think that we are truly seeing investments of this magnitude?

You can't have my mining profits for $5.

[Serge]

Triple post I know, my apologies. But I have an addendum:

Bitcoin is a fantastic, world-changing technology. But a few people are getting WAY ahead of themselves. The price of a bitcoin cannot be supported by wishes and dreams. In the end, the market will decide a price that is reflective of the underlying bitcoin economy. Bitcoin can be used as a viable trade medium at any price, granted, but at the same time it will not, and cannot, be held artificially afloat for long.

At an exchange rate of $5, $36,000 of new money must enter the marketplace every single day (including weekends) in order to support this price, let alone drive it further. That is $252,000 worth of brand spanking new fiat entering the system every week just to sustain the current price at a fundamental level. Does anyone think that we are truly seeing investments of this magnitude?

it would be true if all bitcoins ever mined and being mined went straight to market.  out of +8M bitcoins in existence how many sees the market? a very small fraction at best in relativity small periods of time

[mjcmurfy]

You can't have my mining profits for $5.

I don't want them for $5. I want them for quite a bit less actually.

The fact that you are making profit from mining at all underlines another fact - that the price is currently overvalued.
I'm not you, but if I were, I would take my profits now and buy back later when the euphoria has worn off.

it would be true if all bitcoins ever mined and being mined went straight to market.  out of +8M bitcoins in existence how many sees the market? a very small fraction at best in relativity small periods of time

True, and that is exactly why the price is so easy to manipulate right now. But rationality always wins out in the end.

[notme]

You can't have my mining profits for $5.

I don't want them for $5, I want them for quite a bit less actually.

The fact that you are making profit from mining at all underlines another fact - that the price is currently overvalued.
I'm not you, but if I were, I would take my profits now and buy back later when the euphoria has worn off.

My bitcoins are tied up in other investments.  I'm earning about 1% a day on them in diverse portfolio of stocks, loans, and a trading bot...  As long as they don't drop that much daily I'm not selling.

[cypherdoc]

You can't have my mining profits for $5.

I don't want them for $5, I want them for quite a bit less actually.

The fact that you are making profit from mining at all underlines another fact - that the price is currently overvalued.
I'm not you, but if I were, I would take my profits now and buy back later when the euphoria has worn off.

c'mon now mj; thats what you advised yourself at 4.3 and now look where they are.  trying to play the small waves are just about impossible so why not get in now and ride the longer term wave up?

[mjcmurfy]

trying to play the small waves are just about impossible so why not get in now and ride the longer term wave up?

My surfboard is in the shop. It's getting a reality check.
Don't worry, I'll be on your side again soon... when the price is right.

[ineededausername]

trying to play the small waves are just about impossible so why not get in now and ride the longer term wave up?

My surfboard is in the shop. It's getting a reality check.
Don't worry, I'll be on your side again soon... when the price is right.

There's a long way to go and we'll make it to $10 before April, and if you want to oppose that trend and wait for the crash, you, sir, will be waiting for a long time indeed.  Sure, there will be a major correction... but this rally is going to continue for a while.

You should take a look at historical bitcoin charts.  When the price moves in a trend, it does so for a LONG time.

[mjcmurfy]

There's a long way to go and we'll make it to $10 before April, and if you want to oppose that trend and wait for the crash, you, sir, will be waiting for a long time indeed.  Sure, there will be a major correction... but this rally is going to continue for a while.

You should take a look at historical bitcoin charts.  When the price moves in a trend, it does so for a LONG time.

Unless I'm mistaken, 7 weeks of of continuous upwards movement is the longest rally, if not the largest in terms of price, I have seen to date.

[RyNinDaCleM]

The fact that you are making profit from mining at all underlines another fact - that the price is currently overvalued.

I just don't get why people think there should be zero profit for mining. I agree it shouldn't be a huge profit, but break-even mining removes the incentive to secure the network. Would you (or anyone else for that matter) work to only be able to pay for the gas used to get you there? What would be the point?

[mjcmurfy]

I just don't get why people think there should be zero profit for mining. I agree it shouldn't be a huge profit, but break-even mining removes the incentive to secure the network.

The incentive is to ensure that the transactions you send to others and perhaps more importantly, those you are receiving, are processed quickly, correctly, and efficiently. That is the only incentive required in my view. In the future, most of the mining will be done by those with the greatest vested interest in the system itself - i.e those with profitable businesses that require the bitcoin system to function efficiently as a means of payment.

They won't care about mining at break-even, or even at a loss, when they are making plenty of profit from their individual bitcoin enterprises. Do you think banks and huge corporations require their computer and telecommunication systems to have zero depreciation, or indeed appreciation? They count these expenses as operating costs, and bitcoin mining will be no different. It is a cost of doing business, and it will be minimized like every other expense.

Inefficient miners will probably be priced out to the point where even the most efficient miners will be operating at levels barely above break-even. They might even eventually require subsidy from the bitcoin economy to pay for upkeep of the infrastructure, and since most individuals are profit hungry, their work will likely end up being done by those businesses themselves for a fraction of the cost. That is the only way to ensure mining is done as efficiently as is possible.

Would you (or anyone else for that matter) work to only be able to pay for the gas used to get you there? What would be the point?

No I wouldn't. But if traveling there and back was the only work I actually had to do, and if I had no other obligations, I may just go along for the ride. If I liked driving enough, I'd be more than willing for someone else to pay for my pastime. I might even net a few bucks if I could find a gas station selling cheap fuel. At least until I realized what a waste of resources the whole venture was, and started to feel a bit guilty about the environment.