* The starfish is upon us *

[N12]

Really, Bitcoinica gamblers? Really?!

[BadBear]

People just don't learn.

[gewure]

..starfish is also on the sell-side often, mates..

[N12]

When it’s on both BUY and SELL, it means Bitcoinica has connection issues to the MtGox feed atm.

If you see it on SELL, post it.

you are ignoring a small detail

Absolutely not.



They really did it again. Fuck Bitcoinica.

[Technomage]

I think that lately these starfish indicators have much more to do with the fact that Bitcoinica has serious liquidity problems. I have seen no signs of extreme bullishness recently which means that it makes absolutely no sense that there would be an avalanche of buying. The price doesn't indicate anything like that either. The market is very far from being overbought right now which means that the only plausible explanation to the starfish is that Bitcoinica simply has serious liquidity issues.

I would bet my entire bankroll that there is actually much less highly leveraged longs right now than there was before and that these starfish issues have more to do with the fact that Bitcoinica sucks, less with the fact that people "haven't learned".

[N12]

Starfish appeared first when someone bought 15k to 5.7$. So it seems plausible to me.

[BadBear]

I think that lately these starfish indicators have much more to do with the fact that Bitcoinica has serious liquidity problems. I have seen no signs of extreme bullishness recently which means that it makes absolutely no sense that there would be an avalanche of buying. The price doesn't indicate anything like that either. The market is very far from being overbought right now which means that the only plausible explanation to the starfish is that Bitcoinica simply has serious liquidity issues.

I would bet my entire bankroll that there is actually much less highly leveraged longs right now than there was before and that these starfish issues have more to do with the fact that Bitcoinica sucks, less with the fact that people "haven't learned".

It doesn't need to be overbought, just needs to be enough people new to trading and not realizing the dangers of leverage to make him run out of reserves.  I think this is a lot more likely than "bitcoinica sucks". 

Doesn't mean both aren't true though, we'll never know though. 

[zby]

I think that lately these starfish indicators have much more to do with the fact that Bitcoinica has serious liquidity problems. I have seen no signs of extreme bullishness recently which means that it makes absolutely no sense that there would be an avalanche of buying. The price doesn't indicate anything like that either. The market is very far from being overbought right now which means that the only plausible explanation to the starfish is that Bitcoinica simply has serious liquidity issues.

I would bet my entire bankroll that there is actually much less highly leveraged longs right now than there was before and that these starfish issues have more to do with the fact that Bitcoinica sucks, less with the fact that people "haven't learned".

Do you suggest that Zhou is slowly transferring user USDs from MtGox to a Cayman bank account?

[Technomage]

Do you suggest that Zhou is slowly transferring user USDs from MtGox to a Cayman bank account?

I'm not suggesting anything. I'm simply looking at what the market sentiment was before the big squeeze and what it is now and my conclusion is that the starfish comes up a hell of a lot easier than it did before. Either Zhou has put some new, very strict rules in place that cause the starfish to come up constantly or he simply has a lot less USD than he had before.

[proudhon]

Do you suggest that Zhou is slowly transferring user USDs from MtGox to a Cayman bank account?

I'm not suggesting anything. I'm simply looking at what the market sentiment was before the big squeeze and what it is now and my conclusion is that the starfish comes up a hell of a lot easier than it did before. Either Zhou has put some new, very strict rules in place that cause the starfish to come up constantly or he simply has a lot less USD than he had before.

Or somebody, or some group of people, hold a shit ton of leverage on bitcoinica.  Perhaps they grabbed it on the way up from $2 and haven't been forced out of it yet.  Perhaps they're the reason we're up from $2.  Somebody with some serious balls and enough money could be trying to find out.

[realnowhereman]

Here's my guess of how this works...

The "*" isn't doing anything to the bitcoin market.

For the "*" to appear, we can assume that bitcoinica has an excess of longs versus shorts.  In a market that expects growth, that is to be expected.  In fact it's to be expected that it will always be in imbalance one way or another -- representing the net market opinion of the future.  The excess is so great that all of bitcoinica's reserves have gone into backing those positions and has run out.

Since a customer-long versus a customer-short should have no (immediate) effect on the market we can ignore them.  The "*" appearing then means that bitcoinica has bought as much as it can with the funds it possesses.  Bitcoinica is effectively out of the game, and cannot be affecting the price any more than it already has.  And it can only have an effect equal to the size of the reserve.

Next... some deep pockets see the "*" and think it's time for a long squeeze.  What is the purpose of a long squeeze though?  It is to get cheap bitcoins.  There is no other purpose.  That makes the massive sell by deep pockets a bullish indicator.  They want more bitcoins not fewer.

It is to trigger a forced liquidation... i.e. a sell off.  At first the sell offs will reduce the use of bitcoinica reserves and hence the "*" will vanish as the squeeze begins.  Then the real action begins, the USD reserve is back and the BTC reserve starts to be used as people are force liquidated.  Of course much of the force liquidation can get caught by people who were waiting for it to happen and will be going long at the cheaper prices.  However, if the deep pockets are deep enough the force liquidations will result in people selling when they didn't want to, driving the price lower.  Now the deep pockets gets what it wants... a buy straight back up again, but with a much larger ask side.

We saw exactly this last month.  The drop to 4.64 was immediately followed by a ramp back up again.  The subsequent drop came from people panicing that there was real trouble, inadvertently giving deep pockets some more cheap coins.  It looks like some 25k deep pockets have tried to trigger that same thing again a couple of times over the last week, but it's not been enough.  They are presumably kicking themselves because they lose when the market doesn't panic sell.

I think we should all stop obsessing about the "*".  Ignore it.  It's just one more player in the market.  Also: the big January squeeze will have left people a lot less willing to use massive leverage so a squeeze is that much harder now.

edit: forgot to predict.  The presence of the "*" will tempt a few more deep pockets to try a squeeze.  It won't work but it will give the price a couple more kicks downwards.  Nothing deadly though, and the bounce back up to near where it started will come very soon after.

[teflone]

Do you suggest that Zhou is slowly transferring user USDs from MtGox to a Cayman bank account?

I'm not suggesting anything. I'm simply looking at what the market sentiment was before the big squeeze and what it is now and my conclusion is that the starfish comes up a hell of a lot easier than it did before. Either Zhou has put some new, very strict rules in place that cause the starfish to come up constantly or he simply has a lot less USD than he had before.

Or somebody, or some group of people, hold a shit ton of leverage on bitcoinica.  Perhaps they grabbed it on the way up from $2 and haven't been forced out of it yet.  Perhaps they're the reason we're up from $2.  Somebody with some serious balls and enough money could be trying to find out.

This, wake up people..
whats left for us...  table scraps, and Zhou knows it

[teflone]

Bitcoinica is flawed, and as usual, its designed for rich people to take advantage..

Seriously, I cant even get 2 bitcoins on leverage..  its a fucking joke..

The leverages have been tied up to manipulate us further!

[notme]

I showed up for an hour, chill out.  If you want to buy you can now.

[teflone]

I showed up for an hour, chill out.  If you want to buy you can now.

Dude..  Im chilled, wurd..

[proudhon]

I showed up for an hour, chill out.  If you want to buy you can now.

No thanks.  I'll buy when the star is on the other side.

[N12]

Did you guys miss me?

[proudhon]

Did you guys miss me?

Nice, that was, what, about a 1000BTC buy.

[M4v3R]

I guess most of you didn't really follow the events on Bitcoinica since the "big squeeze". The starfish appears more often for a reason - Zhou slightly changed the way it works after the incident. Before that, starfish would show up only when Bitcoinica was totally out of reserves and one couldn't even liquidate his positions or withdraw USD. It was changed since then so when Bitcoinica's reserves are depleting, they halt trading in certain direction to maintain their reserves for liquidations and withdrawals. That's why we see the star more often even though it's not "dangerous" as much as it was before.

[proudhon]

I guess most of you didn't really follow the events on Bitcoinica since the "big squeeze". The starfish appears more often for a reason - Zhou slightly changed the way it works after the incident. Before that, starfish would show up only when Bitcoinica was totally out of reserves and one couldn't even liquidate his positions or withdraw USD. It was changed since then so when Bitcoinica's reserves are depleting, they halt trading in certain direction to maintain their reserves for liquidations and withdrawals. That's why we see the star more often even though it's not "dangerous" as much as it was before.

Okay, maybe it's time to buy back in.