SR2 (Silk Road related market crash, take 2)

[BTCtrader71]

Preamble: you can't have a good 10-fold rally in bitcoin without first having a good fun panic to get everyone's adrenaline going. Now we've had it and it's over. Let the good times roll!

So, this is my analysis in the immediate aftermath of the 80-point drop from 630 to 550 on stamp (a 12% drop), which at the time of this posting (a few hours after hitting 550) has rebounded to 585.

I am calling this panic selling as an overreaction to news of the Silk Road selloff, announced immediately prior to the crash, here: http://www.usmarshals.gov/assets/2014/bitcoins/

Here's why I calculate it to be panic selling: According to http://bitcoinwatch.com/, the volume of BTC traded over the past 24 hours on all exchanges is somewhere around 150,000 btc. (Someone pls verify I'm reading the chart correctly ... ) Compare that to 30,000 btc that the US Marshals Service is going to selloff. Are they going to dump it on a single exchange over the next 10 seconds? No. They are giving us a 19-day warning (payment is due July 1 - see  ). If total trade volume between now and then is (let's say) $2mil btc, an extra 30k just increases the volume over that time period by 1.5% -- a drop in the bucket.

Comments?

[faalhaas]

so when will we see moon again ?

[damnek]

so when will we see moon again ?

When annoying spammers like you give up :-)

[Tirapon]

Preamble: you can't have a good 10-fold rally in bitcoin without first having a good fun panic to get everyone's adrenaline going. Now we've had it and it's over. Let the good times roll!

So, this is my analysis in the immediate aftermath of the 80-point drop from 630 to 550 on stamp (a 12% drop), which at the time of this posting (a few hours after hitting 550) has rebounded to 585.

I am calling this panic selling as an overreaction to news of the Silk Road selloff, announced immediately prior to the crash, here: http://www.usmarshals.gov/assets/2014/bitcoins/

Here's why I calculate it to be panic selling: According to http://bitcoinwatch.com/, the volume of BTC traded over the past 24 hours on all exchanges is somewhere around 150,000 btc. (Someone pls verify I'm reading the chart correctly ... ) Compare that to 30,000 btc that the US Marshals Service is going to selloff. Are they going to dump it on a single exchange over the next 10 seconds? No. They are giving us a 19-day warning (payment is due July 1 - see  ). If total trade volume between now and then is (let's say) $2mil btc, an extra 30k just increases the volume over that time period by 1.5% -- a drop in the bucket.

Comments?

I was thinking more or less the same. Lets just see if we rebound strongly from here.

[BTCtrader71]

Preamble: you can't have a good 10-fold rally in bitcoin without first having a good fun panic to get everyone's adrenaline going. Now we've had it and it's over. Let the good times roll!

So, this is my analysis in the immediate aftermath of the 80-point drop from 630 to 550 on stamp (a 12% drop), which at the time of this posting (a few hours after hitting 550) has rebounded to 585.

I am calling this panic selling as an overreaction to news of the Silk Road selloff, announced immediately prior to the crash, here: http://www.usmarshals.gov/assets/2014/bitcoins/

Here's why I calculate it to be panic selling: According to http://bitcoinwatch.com/, the volume of BTC traded over the past 24 hours on all exchanges is somewhere around 150,000 btc. (Someone pls verify I'm reading the chart correctly ... ) Compare that to 30,000 btc that the US Marshals Service is going to selloff. Are they going to dump it on a single exchange over the next 10 seconds? No. They are giving us a 19-day warning (payment is due July 1 - see  ). If total trade volume between now and then is (let's say) $2mil btc, an extra 30k just increases the volume over that time period by 1.5% -- a drop in the bucket.

Comments?

I was thinking more or less the same. Lets just see if we rebound strongly from here.

If it follows the pattern of SR1 it will recover within a day or two.

[BTCtrader71]

so when will we see moon again ?

I refer you to this thread:
https://bitcointalk.org/index.php?topic=634245.0

[TERA]

The current news is in no way comparable to the silk road news in 2013.

2013: Bitcoin's biggest business has been shut down and 200,000-600,000 coins are in question.

Today: 30,000 coins are being sold at auction.

I really don't understand why today's news is even something to panic about. A measly 0.22% of bitcoins are being offered, to be sold at an auction, and there is no change in fundamentals.  I guess it is the typical kneejerk reaction as if all of the coins in question were going to immediately appear in a market dump on Bitstamp.

But you can't compare this to the Silk Road event, which involved much more significant news, the price swing was much more significant, and the volume/coin numbers were much bigger. It was also placed right in the middle of a breakout when the next rally was supposed to start and a strong trend had been long established.

[YipYip]

The current news is in no way comparable to the silk road news in 2013.

2013: Bitcoin's biggest business has been shut down and 200,000-600,000 coins are in question.

Today: 30,000 coins are being sold at auction.

I really don't understand why today's news is even something to panic about. A measly 0.22% of bitcoins are being offered, to be sold at an auction.  I guess it is the typical kneejerk reaction as if all of the coins in question were going to immediately appear in a market dump on Bitstamp.

But you can't compare this to the Silk Road event, which involved much more significant news, the price swing was much more significant, and the volume/coin numbers were much bigger. It was also placed right in the middle of a breakout when the next rally was supposed to start and a strong trend had been long established.

Has anybody actually watched the price action on stamp

CHina & BTC-e have not bought into it at all

Is a whale manipulating the situation ....smashes down then sticks 1k wall at 570 within 5 secs of the second dump to keep it down like WTF this aint manipulation

Really worried about the lack of liquidity in crypto that sole operators can totally move a market with 1-2 million ....getting pretty boring

[BTCtrader71]

Has anybody actually watched the price action on stamp

CHina & BTC-e have not bought into it at all

Is a whale manipulating the situation ....

stamp dropped 630 to 550 (lost 13%)
BTC-e dropped from 632 to 560 (lost 12%)
bfx dropped 644 to 575 (lost 11%)
okcoin dropped 4.022 to 3.700 (lost 8%)
huobi dropped 4.023 to 3.700 (lost 8%)
btchina dropped 4.026 to 3.700 (lost 8%)
(Numbers calculated from past 24 hour max and min as reported on bitcoinity)

Looks like BTC-e dropped almost as much as stamp. American news induced less panic in China than in the West -- not surprising at all. Their drop was probably more due to arbitraging the crash that happened in the West, and less to do with China reacting to the news directly.

Although it may sometimes appear that way, whales don't actually live under EVERY rock in bitcoin-land

[Bitcoin_is_here_to_stay]

The current news is in no way comparable to the silk road news in 2013.

2013: Bitcoin's biggest business has been shut down and 200,000-600,000 coins are in question.

Today: 30,000 coins are being sold at auction.

I really don't understand why today's news is even something to panic about. A measly 0.22% of bitcoins are being offered, to be sold at an auction.  I guess it is the typical kneejerk reaction as if all of the coins in question were going to immediately appear in a market dump on Bitstamp.

But you can't compare this to the Silk Road event, which involved much more significant news, the price swing was much more significant, and the volume/coin numbers were much bigger. It was also placed right in the middle of a breakout when the next rally was supposed to start and a strong trend had been long established.

Has anybody actually watched the price action on stamp

CHina & BTC-e have not bought into it at all

Is a whale manipulating the situation ....smashes down then sticks 1k wall at 570 within 5 secs of the second dump to keep it down like WTF this aint manipulation

Really worried about the lack of liquidity in crypto that sole operators can totally move a market with 1-2 million ....getting pretty boring

The whales may not necessarily manipulate the situation - perhaps just preparing to buy cheaper coins at the FBI auction? The condition to participate is to wire $200,000 and it has to arrive by June 20ish, so one has to sell quick on Stamp to have time to withdraw it and wire to FBI's deposit account.

[BTCtrader71]

The current news is in no way comparable to the silk road news in 2013.

Granted, it's not an exact repeat. It is smaller in scale, and comes earlier in the boom-bust cycle (maybe). But they are both panics with a quick rebound (just my prediction -- don't actually know that yet about SR2) induced by what appears to be bearish news of the "OMG time to panic!" variety, but actually has a bullish interpretation that is more nuanced and not appreciated until after the panic.

In this case, the bullish interpretation is that on July 1, the US Government will make its VERY FIRST BITCOIN TRANSACTION EVER!! Which, in spite of the nature of the transaction, does in fact add one more piece of legitimacy to bitcoin.

[YipYip]

Has anybody actually watched the price action on stamp

CHina & BTC-e have not bought into it at all

Is a whale manipulating the situation ....

stamp dropped 630 to 550 (lost 13%)
BTC-e dropped from 632 to 560 (lost 12%)
bfx dropped 644 to 575 (lost 11%)
okcoin dropped 4.022 to 3.700 (lost 8%)
huobi dropped 4.023 to 3.700 (lost 8%)
btchina dropped 4.026 to 3.700 (lost 8%)
(Numbers calculated from past 24 hour max and min as reported on bitcoinity)

Looks like BTC-e dropped almost as much as stamp. American news induced less panic in China than in the West -- not surprising at all. Their drop was probably more due to arbitraging the crash that happened in the West, and less to do with China reacting to the news directly.

Although it may sometimes appear that way, whales don't actually live under EVERY rock in bitcoin-land

...lolz you are giving stats after everything has equalised and the bots have done their work

I was talking about the 10-15 mins of when it actually happened......not the aftermath

[BTCtrader71]

The condition to participate is to wire $200,000 and it has to arrive by June 20ish, so one has to sell quick on Stamp to have time to withdraw it and wire to FBI's deposit account.

And you have to be prepared to purchase in chunks of ~ 3000 bitcoin.
I hope the Federal Reserve buys one chunk. JUST ONE. Please, Janet Yellen ....

[BTCtrader71]

Has anybody actually watched the price action on stamp

CHina & BTC-e have not bought into it at all

Is a whale manipulating the situation ....

stamp dropped 630 to 550 (lost 13%)
BTC-e dropped from 632 to 560 (lost 12%)
bfx dropped 644 to 575 (lost 11%)
okcoin dropped 4.022 to 3.700 (lost 8%)
huobi dropped 4.023 to 3.700 (lost 8%)
btchina dropped 4.026 to 3.700 (lost 8%)
(Numbers calculated from past 24 hour max and min as reported on bitcoinity)

Looks like BTC-e dropped almost as much as stamp. American news induced less panic in China than in the West -- not surprising at all. Their drop was probably more due to arbitraging the crash that happened in the West, and less to do with China reacting to the news directly.

Although it may sometimes appear that way, whales don't actually live under EVERY rock in bitcoin-land

...lolz you are giving stats after everything has equalised and the bots have done their work

I was talking about the 10-15 mins of when it actually happened......not the aftermath

I'm talking about how far it dropped from the top to the very lowest point, at the bottom of the crash. Not the aftermath.

[BTCtrader71]

In this case, the bullish interpretation is that on July 1, the US Government will make its VERY FIRST BITCOIN TRANSACTION EVER!! Which, in spite of the nature of the transaction, does in fact add one more piece of legitimacy to bitcoin.

Looks like I'm not the only one making this point -- see the OP of this thread:
https://bitcointalk.org/index.php?topic=650350.0

[BTCtrader71]

But you can't compare this to the Silk Road event, ... It was also placed right in the middle of a breakout when the next rally was supposed to start and a strong trend had been long established.

Actually the timing of SR2 is almost perfectly lined up with SR1. See:
https://bitcointalk.org/index.php?topic=634245.msg7283889#msg7283889

[bitrider]

The current news is in no way comparable to the silk road news in 2013.

2013: Bitcoin's biggest business has been shut down and 200,000-600,000 coins are in question.

Today: 30,000 coins are being sold at auction.

I really don't understand why today's news is even something to panic about. A measly 0.22% of bitcoins are being offered, to be sold at an auction, and there is no change in fundamentals.  I guess it is the typical kneejerk reaction as if all of the coins in question were going to immediately appear in a market dump on Bitstamp.

But you can't compare this to the Silk Road event, which involved much more significant news, the price swing was much more significant, and the volume/coin numbers were much bigger. It was also placed right in the middle of a breakout when the next rally was supposed to start and a strong trend had been long established.

Agreed. But what seems similar is that before a great run, weak hands need to be shaken out. Sometimes that happens through boring flatlining for months at time, and sometimes flash crashes. Both end up accomplishing the same end..most of the held coins are in strong hands so there is only one way to go...That is what sets the stage for the great runs - in any commodity. Until we have this solid footing we can not really fly. Once that is in place, and the climb becomes unstoppable by even big dumps, then the panic buying can - and will- ensue.

There has been lots of talk on the forums and chart p0rn showing the inevitability of the next super bubble. That kind of thinking keeps many people invested, who are not really strong hands. The market must find ways to shake these "Hopers" out and give the coins to real "hodlers"... and this episode seems perfect to accomplish some of this.

Are we ready yet? no. But we are getting there...

[ajareselde]

Preamble: you can't have a good 10-fold rally in bitcoin without first having a good fun panic to get everyone's adrenaline going. Now we've had it and it's over. Let the good times roll!

So, this is my analysis in the immediate aftermath of the 80-point drop from 630 to 550 on stamp (a 12% drop), which at the time of this posting (a few hours after hitting 550) has rebounded to 585.

I am calling this panic selling as an overreaction to news of the Silk Road selloff, announced immediately prior to the crash, here: http://www.usmarshals.gov/assets/2014/bitcoins/

Here's why I calculate it to be panic selling: According to http://bitcoinwatch.com/, the volume of BTC traded over the past 24 hours on all exchanges is somewhere around 150,000 btc. (Someone pls verify I'm reading the chart correctly ... ) Compare that to 30,000 btc that the US Marshals Service is going to selloff. Are they going to dump it on a single exchange over the next 10 seconds? No. They are giving us a 19-day warning (payment is due July 1 - see  ). If total trade volume between now and then is (let's say) $2mil btc, an extra 30k just increases the volume over that time period by 1.5% -- a drop in the bucket.

Comments?

I was thinking more or less the same. Lets just see if we rebound strongly from here.

If it follows the pattern of SR1 it will recover within a day or two.

yeah, but alot of ppl got burned on SR1. Doubt they will make the same mistake again, well, atleast i hope they wont hold much coins there, and cashout faster-not risking being seized

[zby]

It was just a correction. Not much related to SR bitcoins - just people taking profits. But if the rally was only Expedia insiders buying - than it is possible that it is over now when this is public. And even if not then most probably there will be be another leg of the correction soon.

[okthen]

Everyone is talking as if this was the crash.
I think if something close to what we saw with silk road is to happen, it will only come on the 27th.