Where are the SELLERS??!?

[windjc]

(This thread begins with a loud knock on a hard piece of wood.)

Since December bitcoin buyers and fresh fiat have seemingly gone into hibernation and never woken up. Their sleep seems almost endless, leaving many to believe that we are in the midst of an extended bear market (ala 2011 blah blah blabitty blah). And its a reasonable point. Even the "rallys" have been on historically low volume.

But in the last 3 months, one thing has been lacking even more than new buyers. NEW SELLERS. Go check bitcoin days destroyed. No sellers. Look at the historical exchange asks. No sellers. Look at the volume on "sell offs" since the end of April. No sellers. Where 'ol where have all the sellers gone? Well, lets look at some possible theories - theories that are certainly not exclusive of each other.

A) Sellers are afraid of exchanges. After MTGox, and after the increased AML identity criteria on Bitfinex and Bitstamp, miners and larger bitcoin holders just don't want to sell in current conditions. Maybe they are waiting for a more reputable, trustworthy exchange (albiet doubtful) or maybe they are waiting for an anonymous decentralized exchange (ie Nxt Multigateway) (probably doubtful, but possible).

B) Sellers are feeling bullish. Bulls keeping crying "but, dear God, all this good news has to push us higher" while bears respond "NO amount of good news ever pushes us higher, ha ha ha." But what if all this good news and pending developments (ETF, etc etc blah blah) are actually making everyone HODL?  Again, look at bitcoin days destroyed when we stalled at $420. Look at it now. See something similar? Meanwhile, hashrate continues to go up, indicating that miner profitability may be higher than we suspect. What if these miners can actually afford to HODL more than many have assumed?

C) Off exchange purchases are at an all time high (or are currently very high). What if large bitcoin holders and larger bitcoin miners have simply decided to fullfill a market of large buyers so that neither push up or pull down current market prices?  If I want to invest $5 million into bitcoin - do I send $1 million to 5 different exchanges and hope not to get too much slippage? Do I trust $1 million each to 5 different exchanges? Do I try to explain that to my bank(s)? Do I sit at my computer buying 3.4 btc at a time for a couple of weeks? Probably NOT. I probably go through some broker who has relationships or I have my lawyer call up miners or network for me. Exchange volume is at an ALL TIME LOW. The lower exchange volume drops, the MORE difficult it is for a large hand to buy without slippage and the MORE difficult it is for a large BTC owner or miner to sell without slippage. These parties are not day traders. Executing 150 small orders to try to fullfill a decent size bid or ask is probably not something many of these types care to do.

So what does all this mean? I contend that if these realities are true, most price watchers have been and will continue to look in the wrong direction - trying to measure and understand exchange BUYING. Meanwhile, the most important factor in how fast Bitcoin prices rise (or fall) over the intermediate term is actually exchange SELLING.

And, where 'ol where have all the sellers gone?

[FattyMcButterpants]

wouldn't you agree, though, that there is some hefty resistance above? it seems every time we try to push into the $630s, $650s, $680s, we keep getting smacked down by sellers. or is that just a lack of buyers?

[windjc]

wouldn't you agree, though, that there is some hefty resistance above? it seems every time we try to push into the $630s, $650s, $680s, we keep getting smacked down by sellers. or is that just a lack of buyers?

Lack of buyers, imo.

[FattyMcButterpants]

well, i do remember the last bubble being preceded by what seemed to be thinner and thinner asks above. everyone said asks would fill in, but.... not so much. wouldn't that be nice.

[windjc]

holding, waiting, wishing 

And this is not a bad strategy.

A year ago, every bitcoin "expert" was attaching the following line to any bullish comment they made publically --> "but having said that, there is a still a good chance that bitcoin goes to $0."

Today, government legislation in being devised in the U.S. to make trading bitcoin licensed and legal in every sense of the word.

The worldwide eco-system of bitcoin business development and merchant acceptance is 20x that of what it was a year ago.

Demand is being built into the pipeline.  It may not go up in the next day, week, month, quarter. But without sellers, its going to go up. There is no other way.

[azguard]

Sellers? They on vocation w8 silently into the night for prices to jump.

Today, government legislation in being devised in the U.S. to make trading bitcoin licensed and legal in every sense of the word.

The worldwide eco-system of bitcoin business development and merchant acceptance is 20x that of what it was a year ago.

Demand is being built into the pipeline.  It may not go up in the next day, week, month, quarter. But without sellers, its going to go up. There is no other way.

Do you have any article claiming on this can you provide or post link.

[JimNastics]

We've probably near enough exhausted all the sellers in the current price range, but not enough buyers are coming in to drive up. The biggest worry is all of the people who got in during the last bubble above $700, I guess a lot of them are just waiting to cash out and get their money back. There is going to be unbelievable resistance up to $1200.

[windjc]

We've probably near enough exhausted all the sellers in the current price range, but not enough buyers are coming in to drive up. The biggest worry is all of the people who got in during the last bubble above $700, I guess a lot of them are just waiting to cash out and get their money back. There is going to be unbelievable resistance up to $1200.

Hmmm. Really? Are you sure? I mean, I have heard this theory several times, but if you invested in Bitcoin between $700-$1200, then you probably have had some time to learn about bitcoin since then. Like the fact that it has already had several major bubble price growth periods. And if you haven't panicked sold yet, why would you sell as soon as you could break even, if the price is on the rise AGAIN?

Does not make a lot of sense to me. Although I am not saying your wrong.

[DavidHume]

We've probably near enough exhausted all the sellers in the current price range, but not enough buyers are coming in to drive up. The biggest worry is all of the people who got in during the last bubble above $700, I guess a lot of them are just waiting to cash out and get their money back. There is going to be unbelievable resistance up to $1200.

Hmmm. Really? Are you sure? I mean, I have heard this theory several times, but if you invested in Bitcoin between $700-$1200, then you probably have had some time to learn about bitcoin since then. Like the fact that it has already had several major bubble price growth periods. And if you haven't panicked sold yet, why would you sell as soon as you could break even, if the price is on the rise AGAIN?

Does not make a lot of sense to me. Although I am not saying your wrong.

Technical resistant at around 400 level. Any correction to 500 level will get scoop out quick.

[Tzupy]

Big potential sellers wait for a clear downtrend, which is not apparent now. IMO there's a looming correction in both bulllish and bearish scenarios.
But sellers wait until the last minute, and then sell if a downtrend is confirmed, that's how bitcoin trading works.

[okthen]

Very nice analysis!
I think all your theories are correct, and together are preventing the price from going up.
B seems to me to be the one which is playing the bigger part.

[RyNinDaCleM]

C) Off exchange purchases are at an all time high (or are currently very high). What if large bitcoin holders and larger bitcoin miners have simply decided to fullfill a market of large buyers so that neither push up or pull down current market prices?  If I want to invest $5 million into bitcoin - do I send $1 million to 5 different exchanges and hope not to get too much slippage? Do I trust $1 million each to 5 different exchanges? Do I try to explain that to my bank(s)? Do I sit at my computer buying 3.4 btc at a time for a couple of weeks? Probably NOT. I probably go through some broker who has relationships or I have my lawyer call up miners or network for me. Exchange volume is at an ALL TIME LOW. The lower exchange volume drops, the MORE difficult it is for a large hand to buy without slippage and the MORE difficult it is for a large BTC owner or miner to sell without slippage. These parties are not day traders. Executing 150 small orders to try to fullfill a decent size bid or ask is probably not something many of these types care to do.

I understand that these trades may happen, but other than the 30k auction coins, I can't think of a single way to prove this. Is there something around the forum other than hearsay that you've seen? I don't get around the rest of the forum very much lately, so I don't know. Other sources?

Big potential sellers wait for a clear downtrend, which is not apparent now. IMO there's a looming correction in both bulllish and bearish scenarios.
But sellers wait until the last minute, and then sell if a downtrend is confirmed, that's how bitcoin trading works.

Strangely, I was talking to windjc about this not too long ago. I was saying that this market is heavily reactionary in both directions. They wait for someone with deeper pockets than their own to move first, then they act upon that move. Often times it's too late and they have a loss or break-even trade. This is probably due to a lack experience in trading markets by the majority of participants here. This may also be a contributing factor to the hodl mentality.

[Cryptopher]

I think that the sellers are generally holding their stake.

The bitcoin market price is at a point where it it has almost halved (at present) from its peak price - which was fuelled by goings on at MtGox, therefore people are waiting/fearful for further drops. Meanwhile the sellers are holding their stake in hope of the moon.

Stuff going on with the US Marshals auction has put a cap on things a little, though XBT seems to be holding pretty strong.

You're right about the volume though, it has been dead quiet. The number of trollbox users on BTC-E usually indicates how busy the markets are, at least at this end of the world.

[KeyserSozeMC]

It's the summer effect.

People are taking a break from cryptos.

Every major pump which happened, it happened in November ( If I'm not wrong ).

[alexeft]

It's the summer effect.

This!

[Dalmar]

Sellers can show up in droves on exchanges within an hour if there is some good fud. However, fiat buying pressure takes some time and is more predictable using TA.

[DjPxH]

It's the summer effect.

People are taking a break from cryptos.

Every major pump which happened, it happened in November ( If I'm not wrong ).

Nah, what about the March/April 2013 bubble? But you're right that people are most probably taking a summer break or similar. When do you people think they'll be back and ready to throw some money at BTC again? I believe it could very well be late summer rather than fall already!

[An amorous cow-herder]

Meanwhile, hashrate continues to go up, indicating that miner profitability may be higher than we suspect. What if these miners can actually afford to HODL more than many have assumed?

We dont need to "suspect" anything. Its simple math to calculate the profitability. Even with cheap electricity you will need an average difficulty increase well below 10% to break even with the best kit currently available.
Basicly, if you are hoping to to make money mining you are betting that you will get the miner delivered on time (haha, yeah, funny, i know) and that most companies selling mining hardware will go bust shortly thereafter ...

[windjc]

Meanwhile, hashrate continues to go up, indicating that miner profitability may be higher than we suspect. What if these miners can actually afford to HODL more than many have assumed?

We dont need to "suspect" anything. Its simple math to calculate the profitability. Even with cheap electricity you will need an average difficulty increase well below 10% to break even with the best kit currently available.
Basicly, if you are hoping to to make money mining you are betting that you will get the miner delivered on time (haha, yeah, funny, i know) and that most companies selling mining hardware will go bust shortly thereafter ...

What if you have free electricity and develop your own chips?

Ooohhh. What then?

[An amorous cow-herder]

What if you have free electricity

Oh, thats simple.
Then you sell electricity and take over the global power business. Why go through the hassle to do anything else?

and develop your own chips?

Then you will have to use them yourself when you run out of suckers to sell them to and see and it works out.
Cough.

Ooohhh. What then?

Next question please.