nrd525 Market Tracker

[Tzupy]

So what fundamental developments are causing this price increase? 

Nothing that I heard of... Probably just TA based, there was a large pile of fiat on Huobi waiting for the big triangle to break in order to buy Buy BUY.
Now that fiat is mostly exhausted, but western exchanges are trying to catch up and have entered FOMO mode.

[Ted E. Bare]

What about the block reward halving?

[nrd525]

It seems like the general consensus is that there aren't any fundamentals behind this.   That is what people are saying on Reddit and a Coindesk article about the price increase. The block halving hype probably won't hit for another couple weeks (and everyone knows about it in advance).

That said, I'd expect it to quickly collapse like the last spike to 500-510 (November 2015). The fact that it hasn't (so far) is very positive.

I guess there is progress on Segregated Witness and everyone is hoping that fixes the block size for at least a year.  Kicking the problem down the road, but maybe the Lightning Network will save us at that point.

[Fakhoury]

It seems like the general consensus is that there aren't any fundamentals behind this.   That is what people are saying on Reddit and a Coindesk article about the price increase. The block halving hype probably won't hit for another couple weeks (and everyone knows about it in advance).

That said, I'd expect it to quickly collapse like the last spike to 500-510 (November 2015). The fact that it hasn't (so far) is very positive.

I guess there is progress on Segregated Witness and everyone is hoping that fixes the block size for at least a year.  Kicking the problem down the road, but maybe the Lightning Network will save us at that point.

Hey nrd,

Great analysis as well, thanks buddy.

Could you define "it" please ?

[nrd525]

"It" is the current BTC price spike.

BFX margin rates have calmed down (spiked as high as 0.75%, now down to 0.08%) as total margin funding is down $3.7 million in the past 24 hours (this is down from the new all-time high).   Also the markets are converging as the Chinese premium is down from as high as $60 to $10, and Bitfinex is converging with the other USD markets (currently tied with Bitstamp, though BTC-E is $15 lower).

So all the signs of establishing a new price floor of $500. But it won't be a strong floor until it lasts.

[nrd525]

BFX fined $75k for violating Dodd-Frank, but generally looks like they are fine with the US regulators so that is good news.
http://bitcoinx.io/news/articles/cftc-fines-bitcoin-exchange-bitfinex-75000-for-illegal-off-exchange-financial-transactions/

BFX has an extra $5 million on the margin that is available. Possibly a USD margin whale added 1-5 million when they saw the spike in margin rates (there is currently a $5 million margin funding wall - aka offer - at 0.096%/day which makes me think that is controlled by a single person).  So I expect BFX margin rates to gradually fall to 0.025%/day (eg. a very pathetic rate once you control for risk and the 15% fee) unless speculators are quick to take on the extra supply.  I don't think BFX speculators need any additional margin funding, as the BFX price had a large premium over Bitstamp and BTC-e during the last BTC price spike.  So the additional margin will just increase the potential for a large BFX btc price premium during a spike or bull market.

[nrd525]

What do you think the probability of Poloniex going bankrupt, getting hacked, or scamming users is?  Their BTC swap rates have gone down to 0.025%/day, and I'm not sure it is worth the risk lending money on there.  I had a short run of 0.2% rates (probably entirely due to the ETH bull market) where I felt the risk was worth it.

Cryptsy's running off with the money is a very cautionary tale.  Poloniex does seem a bit more professional than Cryptsy, but I'm thinking there is a major chance that something could go wrong.

[nrd525]

No major news.  BTC is up to a new recent high in US markets - this time at the same level ($570) as China.

[nrd525]

The last BTC halving day was in Nov 28, 2012. 2 months before the first 2013 bubble.

https://bitcoinhelp.net/know/more/price-chart-history

Also Litecoin went up 400% before it halved (and then fell down half the way) on August 25, 2015.

[nrd525]

Bitcoin price is obviously heading towards 666 (this is intended to be funny, but also bitcoin seems to have a thing for triple digits in USD - like 444).

Also - if anyone trades on Predictit and wants to compare notes, pm me.  I did very well on the last set of primaries.

[Fakhoury]

Bitcoin price is obviously heading towards 666.

Also - if anyone trades on Predictit and wants to compare notes, pm me.  I did very well on the last set of primaries.

Why $666 is important, nrd ?

[nrd525]

The June 2014 run-up went to just a bit over 666 and then fell back.

The 444 level is probably more significant. We've spent a lot of time bouncing around in the low to mid 400s.  Interestingly we spent a bunch of time around 444 in May 2014 (so right before 666 became marginally significant).  Mostly I just think this is very funny!  In general the hundreds are more significant - like I recall watching the market sit at exactly 300 for a long time (as there was a large 300 ask wall which eventually broke).

The price has spent less time in the 600s, and if it goes above 700 - things are likely to get increasingly crazy.  Though we might stall first at 800 - as we were at that level for around a month in Jan-Feb 2014.  This assumes that people follow general trading principles, instead of market fundamentals.

[nrd525]

The Google search trend for "bitcoin" is low compared to 2013, and also not that much higher than 2014 or 2015.  It is suffering from a lack of news coverage.  It might be hard for Bitcoin to attract the level of news coverage that it achieved in 2013 as it is no longer a new shiny thing.  On the other hand, I bet the number of business stories relating to Bitcoin (or the blockchain) are increasing (in the business press) and that people with higher incomes and wealth are hearing more positive things about it than during the 2013 cycle.  And for slightly cautious investors it will take a steady flow of positive business stories for them to start investing.

https://www.google.com/trends/explore#q=bitcoin

[nrd525]

It's hard to say for sure due to several trades I made for arbitraging and to transfer USD to Bitfinex for lending (by buying BTC at Coinbase, transferring it to BFX and selling it - cheaper that international wires) - but my cost basis is around $300.   I'm considering selling part of my BTC (for the first time since I sold my then complete holdings of 2 - 2.5 BTC at around $700 in the 2013 bubble).

On the other hand, there is still $2-$3 million of unused swap on BFX.  And if there is demand for it (and interest rates at 20% or more), I think BFX swap could grow at 10-20%/week.

Oh and 666 (at least on Bitstamp).  Bitfinex is currently teasing me with 665.

The Chinese premium is relatively low ($25), especially considering the $50+ premium we had a couple weeks ago.   The GBTC premium ($260) is insane (though as a percentage this has happened before).  The Okcoin quarterly premium is high ($60), but has been higher.  So in general things are looking bullish, without looking super bubbly.  We also haven't seen even mini flash crashes.  Flash crashes were a huge deal in 2013, and have also occurred since then.

[nrd525]

Bubble mode is on.

Trying to trade during a bubble is even more crazy than regular.  You expect it to keep going up until it makes a massive (and quick) fall (aka flash crash).  But in a large bubble, the price will actually recover from most (eg maybe 2 out of 3 or 3 out of 4) of the falls - so it makes sense to hold. Until it doesn't. I tend to think if the price increases by 25%/day we're in a big bubble that is about to crash, but with the market being more mature it might be 15% (which we have already hit) to 20%.

[nrd525]

It is interesting that LTC is not going up as fast as BTC.  Typically LTC gains/losses exceed those of BTC, often by a factor of 2 or more.

BFX is running low on USD swap.  Instead of 5 million available, they are down to 750k.
https://bfxdata.com/swapstats/usd

[Fakhoury]

Thanks for the frequent update my friend, nrd

Aren't you afraid from a quick raise like the ones we are witnessing nowadays, afraid of a crash or sharp one to be precise ?

[nrd525]

I sold two BTC - one at 696 and one at 698.  I placed a bunch of sell orders in the 700-770 range.

[nrd525]

Bitfinex has a all-time-high 36.3 million in US swaps. AND they have another 2 million available (looks like they're getting a quick inflow in response to demand).  In other news, nrd525 inspired panic selling has brought the price down to 690.

[nrd525]

BFX now has 36.4 million in US swaps and 2.9 million available.  So a 1 million increase from yesterday.  At this rate of supply increase, BFX swap rates will plummet which is sad for people like me who are providing it.