Weak hands, greed, and proportions

[semaforo]

     Just posting to say that I hope all of the weak hands sell to the strong hands- this appears to be the prerequisite for a rally anyway.

  By weak hand, I refer to the people who bought bitcoin hoping to get rich. We need more of the steely eyed bulls who will be accepting bitcoin at their garage sales even if the price is at 5 dollars per coin. Say what you will about China, but without the believers bitcoin never would have even caught on in China. So we need more believers.

  The real work of bitcoin is holding through thick and thin and informing society about the very real value of bitcoin and the fact that it remains ridiculously undervalued if the potential is factored in. This is what the people who are buying and holding right now will be rewarded for later.

     For those who remember the last two rallies, USD exchange rate reached less than 10% and 20% of the value of the peak. If the pattern holds we will be looking at bottoming out between 120 and 300. Since the bottom as a proportion of the peak of the rally appears to be increasing, I would say it would be reasonable to say that somewhere between another 10% increase and another doubling would be in order, making the bottom of the valley between 360 and 420- in other words, right about now- coindesk price currently being 384.18.


    I would sell all of my stuff to buy bitcoin at these prices, but I know the price will probably rally by the time I get the cash.

    This feels like capitulation to me, aka growing pains.

[damiano]

I myself am still bearish.  This mornings drop really caught me off guard, but it's moving closer to my buy zone.  I think we have a bit more to go before we bottom out.

[knightcoin]

From the book I am reading now about automate trading systems ... maybe can be applied to bitcoin market too ...but was made from forex, stocks, futures perspective ...

"The leverage in the market yields a locally unstable system because individuals have finite capital and are playing the game so as to survive
the next round.This instability is increased by the asymmetry between game-theoretic behaviors of accumulation and divestment of risky positions. When you accumulate a position you have all the incentive in the world to tell all your friends, and it is a self-fulfilling virtuous circle
as people push prices in “your” direction, thus increasing your profit. This is the epitome of a cooperative game. On the other hand, when you
divest, you have no incentive to tell anyone as they may exit before you, pushing prices away from you. This is a classic Prisoner’s Dilemma game
where it is rational to defect, as it is not seen as a repeated game. This is why we observe a great deal of asymmetry between up and down
moves in prices of most assets, as well as price breakouts and violent trend reversals."

[knightcoin]

ok, going to sleep now zzzzz .. closeing my book .. with..

"There is no short-term relationship between price and value.To paraphrase Oscar Wilde, a trader is a person who knows the price of everything but the value of nothing."

[twiifm]

From the book I am reading now about automate trading systems ... maybe can be applied to bitcoin market too ...but was made from forex, stocks, futures perspective ...

"The leverage in the market yields a locally unstable system because individuals have finite capital and are playing the game so as to survive
the next round.This instability is increased by the asymmetry between game-theoretic behaviors of accumulation and divestment of risky positions. When you accumulate a position you have all the incentive in the world to tell all your friends, and it is a self-fulfilling virtuous circle
as people push prices in “your” direction, thus increasing your profit. This is the epitome of a cooperative game. On the other hand, when you
divest, you have no incentive to tell anyone as they may exit before you, pushing prices away from you. This is a classic Prisoner’s Dilemma game
where it is rational to defect, as it is not seen as a repeated game. This is why we observe a great deal of asymmetry between up and down
moves in prices of most assets, as well as price breakouts and violent trend reversals."

This is what a lot of TA traders believe in.  In TA language; the price of BTC today is signal of descending triangle breakdown.  Bearish pattern

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:descending_triangle_