Investor Cycles & Emotions

[SaintFlow]

This chart is meaningless if the underlying asset that you're speculating on is an inherently poor investment vehicle, cough bitcoin cough...

The more you find ways to contribute to the project the more you find it a meaningfull asset.

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[notme]

This chart is meaningless if the underlying asset that you're speculating on is an inherently poor investment vehicle, cough bitcoin cough...

Good thing it's an awesome transaction medium!

[N12]

I have to say that this recent cycle has taught me a lot of things about trading. It seems that for the short term and mid term fundamental real world events have actually very little effect, they simply either strengthen or weaken the current momentum. We had a downward momentum and then some bad news came, which accelerated that momentum and here we are.

This cycle and the emotions people go through is so spot on that I'm pissed that I didn't see this as clearly before. I still believe fundamentals have a say in the long term picture though and that is why I'm not worried, for example the usage of the Bitcoin network has been on a strong uptrend ever since the Good Wife episode. We have already recovered to the levels of August/September in transaction counts.

Another point is that the bad news we've recently experienced are best categorized as "reverse hype", meaning that there is really nothing to them. Paxum was not crucial to Bitcoin, nor was Tradehill. No one lost their money either. Nothing significant has happened lately on the negative side of things. Excluding the pain caused by the price crash itself, I'd say there is actually more reason to be happy about the state of Bitcoin than to be unhappy about it.

Finally, I would say that we are currently somewhere between capitulation and depression. The only thing I'm pissed about is that I missed the profit opportunities of this cycle. It was an important learning process though, in the future I will not talk about fundamentals when it's a question of predicting short or mid term market behaviour. They have very little say in it.

I have told you before, your "fundamentals" are completely meaningless. Your transaction numbers can be easily manipulated and provide nothing of value. They are not a leading indicator for price.

Price is the leading indicator for fundamentals, you have seen it now and you will see it everytime again. The bad news come out AFTER, and perhaps in some cases BECAUSE the price drops.

[BrightAnarchist]

Price is the leading indicator for fundamentals, you have seen it now and you will see it everytime again. The bad news come out AFTER, and perhaps in some cases BECAUSE the price drops.

+1, I couldn't agree more

[Spekulatius]

If the bad news is ABOUT the price drop: YES
Otherwise: NO

[SkRRJyTC]

Any guesses as to where we are on the EmotionCoaster?

[M4v3R]

Capitulation / Despodency, I guess.

[Technomage]

My guess is depression.

[im3w1l]

I'm at the "I'm brilliant" stage. But I just started trading (again) yesterday so I suppose I haven't synched with the board feelings yet.

[Crypt_Current]

Looks kind of like desperation

[M4v3R]

Looks kind of like desperation

I thought about this. What if this is just one final rally attempt before a long crash down?



 

[SkRRJyTC]

I think desperation happened on Jan 18th followed quickly by some panic 19th and 20th.  Capitulation was Feb 14th-ish and those rally threads are now a little bit of hope.  


EDIT: Still think this looks like desperation?

[Technomage]

I think we are very clearly at "hope" right now. The market is correcting from the clear overshoot it did going down. We've also had some good news for a change, nothing explosive but Keiser starting to boost Bitcoin more (via piratemyfilm etc), Bitcoinica going to the Chinese market big time and a confirmation that a Reuters journalist is writing a Bitcoin article, is not too bad. Combined with the recent rally I'd say we're clearly at the hope phase.

[byronbb]

Looks kind of like desperation

I thought about this. What if this is just one final rally attempt before a long crash down?



 

Denial....

[Mushoz]

Looks kind of like desperation

I thought about this. What if this is just one final rally attempt before a long crash down?



 

Denial....

Denial doesn't make prices rise from a ~3.80 low to over 5. Denial is people screaming it's just a correction, and that it will go up soon, while the price plummets further and further.

[SkRRJyTC]

Looks kind of like desperation

I thought about this. What if this is just one final rally attempt before a long crash down?



 

Denial....

Denial doesn't make prices rise from a ~3.80 low to over 5. Denial is people screaming it's just a correction, and that it will go up soon, while the price plummets further and further.

Yeah denial was the fall from $7-$6

[Technomage]

That is rather obvious. I was thinking that maybe he meant denial as in denial of price going up. I don't see how he can be serious otherwise. Denial goes both ways guys. You simply turn the picture from BTC/USD to USD/BTC and you have the exact same cycle but the other way around.

So in that sense it is correct to say that we are in the denial phase if you look at it from the perspective of USD instead of BTC. It's the equivalent of hope.

[SkRRJyTC]

That is rather obvious. I was thinking that maybe he meant denial as in denial of price going up. I don't see how he can be serious otherwise. Denial goes both ways guys. You simply turn the picture from BTC/USD to USD/BTC and you have the exact same cycle but the other way around.

Im not sure that thought had dawned on me...   

[Mageant]

It looks like hope to me now.

[im3w1l]

I'm starting to feel desperation now. Where is the volatility? Where is the liquidity?