nrd525 Market Tracker

[nrd525]

$6700 and falling.  Wow.  This is happening a bit faster than I thought.  My BTC is still locked up being lent for another day.  Hmm, if I sell BTC short and use FIFO - can I use the long term capital gains rate (eg. is it essentially selling BTC I bought in 2014/2015?).

It's falling so fast, Korea is back to having a 8% premium (over BFX, 11% over GDAX).

I'm going on a trip for a couple weeks soon. I hope we don't bottom out then because I am unlikely to have consistent internet.  I'd rather not place some blind bids.

This YouTube video with former Bitcoin maximalist Richard Heart is interesting.  He's gone over to the dark side!  He's even launching an ICO.
https://www.youtube.com/watch?v=w8_1JFE_9dI

I'm thinking bitcoin will fall to 3k.  I'm shorting more alt-coins.

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[nrd525]

So I'm shorting XRP, LTC, BTG, BCH, ETH, EOS, XMR, IOTA, and OMG on bitfinex.  Unfortunately only a total of 9k.  Up a lot (10% to 39%), but lost far more on my 5 remaining BTC.

Bitcoin dominance is at 36%.  It should hit at least 40% if not 45% - as we continue to bear down.

[nrd525]

Shorting 17.5k worth of alts.

[nrd525]

This crash is a lot faster than 2014.  It's probably a lot easier to short.

[nrd525]

BitMex analysis of Ripple:

https://blog.bitmex.com/the-ripple-story/

[TheQuin]

This crash is a lot faster than 2014.  It's probably a lot easier to short.

You set me thinking with that as my recollection was that it seemed much more violent in 2014. So I had a look back at the charts (yahoo handily now has a full history).

Have a look at the comparison.

2014


2018


I think what I was remembering was the initial sell-off for a couple of days immediately after the high was in. That's a much deeper pull-back than this time. Although what we see happening now is remarkably similar. The sell-off only lasted 3 days last time and now has been going for 5.

[Tzupy]

So I'm shorting XRP, LTC, BTG, BCH, ETH, EOS, XMR, IOTA, and OMG on bitfinex.  Unfortunately only a total of 9k.  Up a lot (10% to 39%), but lost far more on my 5 remaining BTC.

Bitcoin dominance is at 36%.  It should hit at least 40% if not 45% - as we continue to bear down.

I wouldn't short so close to a local bottom, especially not XMR and LTC. Be careful...

[nrd525]

Oops.  I didn't expect it to bounce so well.  Shorts doing badly!  Though I guess we were overdue for a good bounce.  Still might be heading to 2k-3k.  But it is a bit surprising how fast we're falling.

[nrd525]

TheQuin - I think we've grown used to bear markets and flash crashes, so we're slightly better at seeing the big picture.

Also I think we have fewer flash crashes.  In 2013-2015, the exchanges would be overwhelmed with orders, often stop working, and you'd have these crashes down to as low as $100 (or even $1).  Currently we've been slowly grinding down and then having faster bounces.  Like the current low of $5900-$6000.

Korea premium is around 0%.

CFTC hearings are very positive.  Chairman is not an advocate for increased regulation.

[nrd525]

In 2014, we had a month of stability at around $900.  That is pretty long. By contrast this time we had 13 days of stability at around 11k.

[nrd525]

Sold 3 BTC at 7360.  Got out of most of my alt-coin shorts, but now holding a small net short position in crypto for the first time in a long time (if BTC moves the same rate as altcoins).

[nrd525]

Just found bitcoinity. Some amazing data charts/tables - like this one on arbitrage.
https://data.bitcoinity.org/markets/arbitrage/USD

[nrd525]

My net short position is turning out badly so far.  The problem is that alt-coins are going down on a long time frame. Short to medium term - anything can happen.  The alt-coin market is very far away from rationality.

[uslfd]

Too late to short now.....
Going down to $3K is at best a 50/50 proposition.....

If VIX goes back down BTC will pump very high from here........ (Read about correlation between VIX and bitcoin if you're not sure what I'm talking about)

Opening short against BTC now is basically saying DOW would reach 20000 -- possible but not necessary.

[nrd525]

In the next year (or possibly 18 months) bitcoin is probably going to fall hard. It's just going to take us bursting the alt-coin / ICO bubble which could take a full year.  So I think it makes sense to wait for the first round of alt-coin collapses.   For instance if XRP falls to 10 cents and brings Stellar and any other related banking coins down with it. Or if all the distributed app coins crash.

While 2020 is looking bullish as we'll have another wave of technological innovation, projects putting out products, and bitcoin halving - 2021 could be another bear market if the Democrats win back the White House and decide to regulate.  Though I'm guessing that by then the regulation will be relatively in place.  And the Democrats are unlikely to do much more regulation than the Republicans (unless the crypto currency market cap gets so big that it causes a financial crisis when it collapses), as they are both in the pocket of Wall Street and capitalism.

Most of the reason to hold bitcoin is to make money speculating.  Many of the hardcore technology enthusiasts have already seen a bear market and are not going to want to hold through another one.  Most of the new speculators are going to panic sell the bottom (or near the bottom).

The stock market is also looking like a better investment alternative with the 10% dip in the US.

[nrd525]

Some interesting possible swap rate manipulation on BFX.  The USD rate had fallen to 0.023%/day.  So now one or more whales have removed enough supply to drive the rates back up to 0.3%/day.  There is only $100-$300k below 0.3%/day and most of the remaining swap is a $23 million wall at 0.5%/day.

Good time to close my shorts and put it all into margin lending!  I'll be very happy if I can make 10% APR for 2018 on Bitfinex.

[nrd525]

Bitfinex might be changing their policies regarding US corporate customers.  They haven't announced anything or changed their Terms of Service.  But there are several reports (I think I've seen three) of them stopping corporations from doing margin lending (and one of them was also doing margin trading).

I'm fine with the end of margin trading, but if they stop margin lending I might have to setup a foreign LLC which would be a major pain. 

As I'm running an unverified account, I haven't been prevented from either of these activities - though I stopped margin trading.  And I'm not hiding my US IP address.

https://www.reddit.com/r/Bitfinex

[nrd525]

So we continue to have a nice bounce/recovery from the long-term bear trend.  I still think the bear trend is intact (1-2 years).  It just might take a very long time for people to realize it.

I finished reading "The Great Taiwan Bubble" and have read most of "The Bubble Economy" (Japan).  The first book is a more entertaining read (if you only want to read one).  In both cases, the stock market's fell around 80% from their 1990 peak to trough.  Taiwan fell quickly (a couple years), whereas Japan took 13 years.  While Taiwan's bubble was greater (stock market hit 100 P/E), the Japanese one was more severe as it came with an even more insane property bubble.

A major difference between the cryptocurrency bubble and these prior ones is that there is a lack of consensus about cryptocurrencies.  Unlike the stock markets in Taiwan and Japan which almost everyone said could only go up, and were supported by self-interested corporations, politicians, and financial journalists - bitcoin and other cryptos have received a lot of negative media coverage (and negative statements by major economists, politicians, experts, etc).  Also there is the ability to short most crytos (though not the ICOs), which wasn't available during the Japanese bubble (so far as I can tell?) and may have only been partially available in Taiwan (does anyone know?).

In Japan, there was a strong web of ties and self-interest connecting corporations with each other and the banks - as they held stock in each other and often only a minority of the stocks are liquid. The property market was even more illiquid.  Illiquid markets are easier to manipulate. We've seen this is the alt-coins and the GBTC premium.

In crypto there is a web of self-interest as the currencies generally rise and fall together.  So there is some inter-fighting and criticism, but not as much as there should be.  Also almost everyone is long - so the price is of paramount importance.   There is a web of self-interest and ties between investors, crypto businesses, exchanges, crypto news media, ICOs, developers, researchers, etc.  For instance, we have no idea of how much crypto currencies the reporters and crypto news media holds (does mainstream media have disclosure or ethics rules for their journalists owning stocks?  I'm guessing they do.).  It's also very hard to short a bubble - so the would-be shorters are mostly staying away.  All of this can produce a relative consensus in the in-group that blockchain is going to radically change the world.  When you're only getting criticism from outsiders, it's much easier to ignore reason (see the global warming debate).

Is there any research, books, articles, in to "group think" which might be applicable?

I'm going to read "Dot Con " next. Any other suggestions?  Maybe I should balance it out by reading about "bubbles" that actually turned out to be revolutionary changes, so they were actually properly priced.

[nrd525]

Bitcoin dominance at 41.8%.  Up 9% from the bottom on Jan 4.

[nrd525]

MtGox liquidator sells 30k BTC. Did they cause the recent crash?  I think we were overdue - but they probably added pressure.

More SEC regulation and Japan regulation of exchanges.

Watched a couple Youtube videos on hyperwaves (a bubblish wave that is very similar to the hype cycle meme).  Made a lot of sense (as much as that kind of technical analysis can make), until the person argued that we were in stage 2 out of 7 (eg. modest growth of an insane wave - eg 100k+ target) and that this 70% correction was just a blip.  Whereas if we're in stage 7 (which fits the chart), we're headed to 1k.