The market was waiting for a jump so it could rally...

[dree12]

This recent price spike surprised me, but in hindsight it should not have.

The weeks preceding the price spike were among the most bullish I had ever seen. Speculators across this subforum were predicting breakouts, giving a variety of dubious but thought-out reasons. They were wrong time and time again, but the sentiment remained.

It is reasonable to suggest that this sentiment held out across the Bitcoin trading community—it was time for a rally, but when? Markets behave in irrational ways, and are extremely difficult to predict. But sentiment is a strong indicator. So when sentiment was so strong, why was the price still dropping like a stone?

My hypothesis is that markets will eagerly follow the sentiment if the trend agrees, but if the trend does not agree, markets will reluctantly side with the trend. It took a random one-day fluctuation to convince Bitcoiners the price was going back up, and then the rest is history.

Hindsight is always 20/20 of course, and I don't claim to be able to predict the future. Maybe this rally will fizzle out in time. But I think this hypothesis makes sense, seems to fit well with Bitcoin's history, and may come useful again sometime later.

[byronbb]

There has been tons of good news actually, it was just being capped by the China BS.

[lay785]

nice insight. thanks

[spiderbrain]

Didn't surprise me that much, the dropping volume, slowing down-trend and huge spread all pointed to a reversal. You're completely right, though, there was a "trend trumps fundamentals" sentiment before. I find it amazing that everyone's expecting the next factor of 10 leg up straight away, though. We'll probably pop up to 700-800 pretty soon, but after that I imagine we'll have a month or two of people cashing out once they've broken even before it does anything interesting.

[Bitbuy]

We'll probably pop up to 700-800 pretty soon, but after that I imagine we'll have a month or two of people cashing out once they've broken even before it does anything interesting.

Yes, that's a possibility; unless those people have already panick-cashed out on the way down...If that's the case, it won't be two months.

[Skele]

Feel bad for the people expecting the price to go $350 to buy... lol, 430 demostrated to be a very hard limit.

let the fun begin

[ChetnotAtkins]

What a ride!

[hulk]

Feel bad for the people expecting the price to go $350 to buy... lol, 430 demostrated to be a very hard limit.

let the fun begin

I remember it did drop down to $350 but only for awhile until it went back up.

[UnDerDoG81]

Feel bad for the people expecting the price to go $350 to buy... lol, 430 demostrated to be a very hard limit.

let the fun begin

430 was extreme cheap. I wish I should have bought at the 400s instead of 680. I think we´ll never see the 400´s again when we break 600.

[Skele]

Feel bad for the people expecting the price to go $350 to buy... lol, 430 demostrated to be a very hard limit.

let the fun begin

430 was extreme cheap. I wish I should have bought at the 400s instead of 680. I think we´ll never see the 400´s again when we break 600.

You have still a good price, when it comes to x10 raises, it doesnt matter if you bought 20-40% more high in the beggining.

[ThatDGuy]

Feel bad for the people expecting the price to go $350 to buy... lol, 430 demostrated to be a very hard limit.

let the fun begin

430 was extreme cheap. I wish I should have bought at the 400s instead of 680. I think we´ll never see the 400´s again when we break 600.

You have still a good price, when it comes to x10 raises, it doesnt matter if you bought 20-40% more high in the beggining.

So much this.  Once you get through your first bubble to the next one, it's hard to be too upset about any drop when it's still hundreds of % higher than what you bought at before.

[alani123]

In fact the recent sudden rise came after whales tried to pump the price. It indeed seems to be having a long term effect

[bryant.coleman]

The successful fundraising by Bitpay and Xapo, as well as the involvement of notable UHNW individuals such as Li Ka Shing of Hong Kong and Richard Branson of the United Kingdom seems to have fueled this rally. This is just the tip of the iceberg.... much more is coming...

[ranlo]

There has been tons of good news actually, it was just being capped by the China BS.

So this should be a sign that we're no longer going to be massively affected (at least in a negative way) by China's stance, right? This is what's been giving us a roller coaster...

[bryant.coleman]

So this should be a sign that we're no longer going to be massively affected (at least in a negative way) by China's stance, right? This is what's been giving us a roller coaster...

For the last month or so, news from China is having Zero impact over the Bitcoin exchange rates. But the Mt Gox effect is still having some impact over the rates. And it will be like that for some more months to come.

[UnDerDoG81]

So much this.  Once you get through your first bubble to the next one, it's hard to be too upset about any drop when it's still hundreds of % higher than what you bought at before.

I dont see a rise of hundreds of % at these levels. That was possible on single and double digits. But at three digits I cant really imagine that BT will ever trade for five digits.

[inca]

So much this.  Once you get through your first bubble to the next one, it's hard to be too upset about any drop when it's still hundreds of % higher than what you bought at before.

I dont see a rise of hundreds of % at these levels. That was possible on single and double digits. But at three digits I cant really imagine that BT will ever trade for five digits.

Really? Human psychology of dealing with large numbers aside, bitcoin could easily rise several thousand % from here. Will it rise anytime soon? I would say unlikely. I expect several months of meandering back upwards and once we retake 800 then its off to the races. But who knows, it is bitcoin right?

There are optimistically say 2 million bitcoin 'users' globally. From Rpietila there are perhaps 14,000 people with more than 100 coins, another 85,000 with between 10 and 100 coins, and all the rest holding below 10 coins individually.

Let's think about that for a moment - globally there may be less than 100,000 people holding more than 10 coins which comprise the overwhelming majority of all coins in existence. And really it is probably closer to 20,000 holding more than thirty coins.

There are approximately 7.2 billion people on the planet. In 2011 there were 6 billion mobile phone active sims globally. There is a film floating about called 'The rise and rise of bitcoin'. There should be a film called 'The rise and rise of the smartphone'. What is happening right now is the creation of - in my view - internet 2.0. There are over a billion smartphones globally and in the next five years this technology will have spread like wildfire connecting everyone irreversibly.

The internet has destroyed, altered or disrupted everything it has touched thus far. Postal services -> email. Conventional telephone -> VOIP. Conventional printed media -> blogging and 24 hour news sites. Hard films and digital media -> commercial streaming media (netflix) and torrents. Finance is next. Voting may follow that.

Half the world is unbanked and will soon be clutching a powerful unix workstation which is permanently connected to the net.

If bitcoin can simply continue to exist, at current user adoption rates it must rise massively in value.

Even if total bitcoin users rises from 1-2 million to just ten million the price will rise many fold. If by some wonderful stroke of luck bitcoin can survive and actually become a true transacting currency of the internet then todays prices will appear incredible.

I know this is a speculation forum but patience is a virtue!

[rudius]

So much this.  Once you get through your first bubble to the next one, it's hard to be too upset about any drop when it's still hundreds of % higher than what you bought at before.

I dont see a rise of hundreds of % at these levels. That was possible on single and double digits. But at three digits I cant really imagine that BT will ever trade for five digits.

With all due respect, what you "see" and what you "can imagine" is irrelevant.
Back your story with some story/arguments, otherwise you add nothing.

MarketCap is far too low to allow mainstream adoption. We could easily see 5 digits in a near future as people won t trust any government anymore. The incoming global crisis will be a good help for that.

[Torque]

So much this.  Once you get through your first bubble to the next one, it's hard to be too upset about any drop when it's still hundreds of % higher than what you bought at before.

I dont see a rise of hundreds of % at these levels. That was possible on single and double digits. But at three digits I cant really imagine that BT will ever trade for five digits.

Really? Human psychology of dealing with large numbers aside, bitcoin could easily rise several thousand % from here. Will it rise anytime soon? I would say unlikely. I expect several months of meandering back upwards and once we retake 800 then its off to the races. But who knows, it is bitcoin right?

There are optimistically say 2 million bitcoin 'users' globally. From Rpietila there are perhaps 14,000 people with more than 100 coins, another 85,000 with between 10 and 100 coins, and all the rest holding below 10 coins individually.

Let's think about that for a moment - globally there may be less than 100,000 people holding more than 10 coins which comprise the overwhelming majority of all coins in existence. And really it is probably closer to 20,000 holding more than thirty coins.

There are approximately 7.2 billion people on the planet. In 2011 there were 6 billion mobile phone active sims globally. There is a film floating about called 'The rise and rise of bitcoin'. There should be a film called 'The rise and rise of the smartphone'. What is happening right now is the creation of - in my view - internet 2.0. There are over a billion smartphones globally and in the next five years this technology will have spread like wildfire connecting everyone irreversibly.

The internet has destroyed, altered or disrupted everything it has touched thus far. Postal services -> email. Conventional telephone -> VOIP. Conventional printed media -> blogging and 24 hour news sites. Hard films and digital media -> commercial streaming media (netflix) and torrents. Finance is next. Voting may follow that.

Half the world is unbanked and will soon be clutching a powerful unix workstation which is permanently connected to the net.

If bitcoin can simply continue to exist, at current user adoption rates it must rise massively in value.

Even if total bitcoin users rises from 1-2 million to just ten million the price will rise many fold. If by some wonderful stroke of luck bitcoin can survive and actually become a true transacting currency of the internet then todays prices will appear incredible.

I know this is a speculation forum but patience is a virtue!

Great post!  I think we're getting really close to getting past the public's psychological hurdle of triple digit bitcoins, or the notion that you even have to buy whole bitcoins.  It should just be that you're buying 'bitcoin' (plural, no 's', like the word money)  The public is starting to do the research and see that the exchange rate per BTC only really reflects the total marketcap, not the amount that most are buying.  When we solidly get into quadruple digits again, even more people will do the research and understand.  Then at that point 4 and 5 digit bitcoin will become more acceptable as we move on to the smaller denominations for discussion and use.

[zimmah]

So much this.  Once you get through your first bubble to the next one, it's hard to be too upset about any drop when it's still hundreds of % higher than what you bought at before.

I dont see a rise of hundreds of % at these levels. That was possible on single and double digits. But at three digits I cant really imagine that BT will ever trade for five digits.

Lol you'll be up for a nice surprise about early next year. Say about februari/march.