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Author Topic: Predicting Flash crashes (solution found?)  (Read 2998 times)
Mikcik
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October 25, 2014, 04:05:46 PM
 #1

Hello i just want to share an idea and hear feedback, i must have been said here before but neverthless:

Is looking on blockchain (or similiar sites) and monitoring incoming huge ammounts of BTC to the accounts of major exchanges (bitstamp, bitfinex, those chinesse ones etc.) a good way for predicting a flat crash...? I got a "hint" that some of the more experienced users might do so... As far as i know, major exchanges have only limited and probably by this time well known bitcoin adresses, so if someone monitors them on blockchain and seesa  huge ammount of incoming BTC to these adress (thousand of btc for example), that might be quite a good indication that the exchange is heading for a major flash crash...

Is this basic idea a good way for predicting flash crashes of BTC price?
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October 25, 2014, 04:14:59 PM
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They're nothing more than market manipulation. They attempt to trigger stop loss orders in order to cause an avalanche in price. They attempt them often, usually during long boring spells of stability. The only people that don't see them coming a mile away are newbies like I was once).

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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October 25, 2014, 04:29:08 PM
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They're nothing more than market manipulation. They attempt to trigger stop loss orders in order to cause an avalanche in price. They attempt them often, usually during long boring spells of stability. The only people that don't see them coming a mile away are newbies like I was once).

Yeah i thought that someone might use it this way...

So i understand it (im not native english speaker so i might get it wrong). The "trick" is well known (watching blockchain as a mean for predicting price movements), and everybody besides noobs (like me) have thought this out a long time ago, so long that peopel are trying this as a way of taking advantage. That means they send a huge ammounts of BTC to exchange, even if they do not intend to sell, they just want to cause panic, let the price crash, buy more bitcoins (and then maybe sent the original ammount of btc, that have never really touch the market back)?

Do i understand it right? (again, english is not my primary language so im asking to be totally sure)?

Thanks
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October 25, 2014, 04:33:19 PM
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Bitcoin price has nothing to do with the blockchain. All market trading is done with imaginary tallies in a trading program. No bitcoins are actually traded from markets. They are only deposited and withdrawn depending on how well you play their trading computer game.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
sbrzol
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October 25, 2014, 06:56:34 PM
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I am interested in bitstamp "addresses", so if anybody knows where to find which addresses should i monitor, share it , thx Wink
Mikcik
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October 25, 2014, 08:13:46 PM
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Bitcoin price has nothing to do with the blockchain. All market trading is done with imaginary tallies in a trading program. No bitcoins are actually traded from markets. They are only deposited and withdrawn depending on how well you play their trading computer game.

Useless post, talking about absolutelly other topic...

If you have a lot of BTC you can move the market
If you have a lot of BTC you wont keep them on Bitstamp wallets, you will move them to your own personal wallets/adressses whatever
If you want to sell a lot of BTC via "normal markets" you have to move them to their wallets (Bitstamps e.g.)
All moves are publicly visible on blockchain
People know, or are pretty sure which wallets belong to the biggest exchanges

What is that you do not understand in this simple case sherlock... :-( ?

Could someone verify what i said?
Mikcik
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October 25, 2014, 08:16:48 PM
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I am interested in bitstamp "addresses", so if anybody knows where to find which addresses should i monitor, share it , thx Wink

I do not remember them but i know they are floating around the net somewhere, but as i said, and would love to get that verrified, its useless since people found out about this possibility and try to manipulate/take an advantage of this.

They move a lot of btc to exchange, little more informed but naive people see that, expect a sale-off, sell their BTC, other poeple see it, sell theirs, the price gets lower, the original "manipulator" buys another BTCs and sends those "BIG BTC ammounts" back to his adress.

At least that is how i interpret the things that have been said. Can someone verify it???
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October 25, 2014, 09:14:02 PM
 #8

Bitcoin price has nothing to do with the blockchain. All market trading is done with imaginary tallies in a trading program. No bitcoins are actually traded from markets. They are only deposited and withdrawn depending on how well you play their trading computer game.

Useless post, talking about absolutelly other topic...

If you have a lot of BTC you can move the market
If you have a lot of BTC you wont keep them on Bitstamp wallets, you will move them to your own personal wallets/adressses whatever
If you want to sell a lot of BTC via "normal markets" you have to move them to their wallets (Bitstamps e.g.)
All moves are publicly visible on blockchain
People know, or are pretty sure which wallets belong to the biggest exchanges

What is that you do not understand in this simple case sherlock... :-( ?

Could someone verify what i said?

You are assuming a market maker isn't already established on the exchange and has to move coins.  Thats an assumption. Blockchain transactions could be anything, you are just wildly speculating that its moving to an exchange with the intent to sell.

Sure its possible, and I've seen people speculate on transactions before dips in the past, especially on this chart https://blockchain.info/charts/bitcoin-days-destroyed, but there is no direct correlation.
Mikcik
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October 25, 2014, 09:53:09 PM
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Bitcoin price has nothing to do with the blockchain. All market trading is done with imaginary tallies in a trading program. No bitcoins are actually traded from markets. They are only deposited and withdrawn depending on how well you play their trading computer game.

Useless post, talking about absolutelly other topic...

If you have a lot of BTC you can move the market
If you have a lot of BTC you wont keep them on Bitstamp wallets, you will move them to your own personal wallets/adressses whatever
If you want to sell a lot of BTC via "normal markets" you have to move them to their wallets (Bitstamps e.g.)
All moves are publicly visible on blockchain
People know, or are pretty sure which wallets belong to the biggest exchanges

What is that you do not understand in this simple case sherlock... :-( ?

Could someone verify what i said?

You are assuming a market maker isn't already established on the exchange and has to move coins.  Thats an assumption. Blockchain transactions could be anything, you are just wildly speculating that its moving to an exchange with the intent to sell.

Sure its possible, and I've seen people speculate on transactions before dips in the past, especially on this chart https://blockchain.info/charts/bitcoin-days-destroyed, but there is no direct correlation.

I do not understand, my assumptions:

If you have a lot of coin (big investors), you are not stupid and you do not keep it on exchange accounts, but your own. Thus when you want to sell some of these (for whatever reason), you have to move them to the exchange (to exchange wallets), all transactions are visible on blockchains. People do with high accuracy know what adresses (wallets) belong to the exchanges. Im not sure on the last one, but i think it is true, big exchanges have only few adresses/wallets (they do not create a special wallet for each customer), and these are known, or am i mistaken?

So is it this was or not, im not sure if i do express my questions so stupidly (english is not my native language), or are the people here stupid :-)?
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October 26, 2014, 05:03:08 PM
 #10

Does "my" approach apply or not?
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October 26, 2014, 05:07:50 PM
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You are right and wrong. Blockchain analysis could be helpful but someone with lots of coins/fiat on exchange could massively move the price and because it is 'off chain' not leave a blockchain imprint.

If bitcoin days destroyed rockets upwards, if there are documented cases of huge numbers of coins moving to or from an exchange then perhaps something is afoot and you could predict a major market move. But it is not a perfect science.
cbeast
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October 26, 2014, 05:58:30 PM
 #12

You are right and wrong. Blockchain analysis could be helpful but someone with lots of coins/fiat on exchange could massively move the price and because it is 'off chain' not leave a blockchain imprint.

If bitcoin days destroyed rockets upwards, if there are documented cases of huge numbers of coins moving to or from an exchange then perhaps something is afoot and you could predict a major market move. But it is not a perfect science.
Markets don't use the blockchain. Watching bitcoin days destroyed or large transactions has no corellation to markets. You can only corellate them after the fact, but nobody has ever researched this to conclude any probability of that phenomenon. It's right up there with "The Weekend Dip." It's just magical thinking. You can massively move the market without ever even having a Bitcoin wallet and I suspect that's a lot of what is going on.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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October 26, 2014, 06:08:31 PM
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You are right and wrong. Blockchain analysis could be helpful but someone with lots of coins/fiat on exchange could massively move the price and because it is 'off chain' not leave a blockchain imprint.

If bitcoin days destroyed rockets upwards, if there are documented cases of huge numbers of coins moving to or from an exchange then perhaps something is afoot and you could predict a major market move. But it is not a perfect science.
Markets don't use the blockchain. Watching bitcoin days destroyed or large transactions has no corellation to markets. You can only corellate them after the fact, but nobody has ever researched this to conclude any probability of that phenomenon. It's right up there with "The Weekend Dip." It's just magical thinking. You can massively move the market without ever even having a Bitcoin wallet and I suspect that's a lot of what is going on.

I think we actually are in agreement cbeast. Smiley
Mikcik
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October 27, 2014, 07:16:21 PM
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Im not sure if i understand it correctly...

The only way to get BTC to an exchange to "sell" them is via sending them from some (my personal for example) wallet, and this transaction is always visible on blockchain...

Or am i wrong, thats the only way to get BTC to exchange?
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October 27, 2014, 07:25:41 PM
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Im not sure if i understand it correctly...

The only way to get BTC to an exchange to "sell" them is via sending them from some (my personal for example) wallet, and this transaction is always visible on blockchain...

Or am i wrong, thats the only way to get BTC to exchange?

One route to sell coins is to send them with a blockchain transaction to the exchange over the bitcoin network. But you can wire fiat currency to the exchanges. For example you could wire 10 million dollars to bitfinex if you were stupid enough. You might then loan btc from someone in a swap and sell them on the exchange - you might manipulate the price downwards significantly. You could then close your short contracts for profit. You then take your money out of the exchange. End result the price moved, but no bitcoins moved on the blockchain.
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October 27, 2014, 08:18:40 PM
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[...] People do with high accuracy know what adresses (wallets) belong to the exchanges. Im not sure on the last one, but i think it is true, big exchanges have only few adresses/wallets (they do not create a special wallet for each customer), and these are known, or am i mistaken?

Virtually all exchanges handle it this way: For each deposit a fresh address is or can be generated by the user. There has to be at least one user-specific bitcoin address, otherwise the deposit couldn't be assigned to the user's account.

You can identify the cold and hot wallets of an exchange and monitor the transactions going there. But these are not the addresses users deposit their bitcoins to directly. So you'd need to discover if your target exchange forwards the deposited bitcoins to its own wallets instantly (or at least very quickly).

Provided that you are able to identify the forwarding transaction to the exchange wallet before the deposit is credited to the user's account, you could possibly utilize that knowledge. But you would be making a lot of assumptions there: The deposit is made to dump the coins (not a swap), the exchange's deposit forwarding works in a predictable way, it's an actual deposit (not an internal transfer between wallets), etc.

As already pointed out, it is not a perfect science. Not at all.
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October 27, 2014, 09:34:33 PM
 #17

Doing reliable predictions in any market is very difficult. Especially short time fluctuations are almost impossible to predict with certainty.

Staying away from short term trading is a good advice for almost anyone. Because the probability to loose is huge. Most traders tend to overestimate their abilities with disastrous consequences.

Better buy based on fundamentals and hold longer term. It's much less stress and more rewarding.


ya.ya.yo!
Mikcik
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October 28, 2014, 01:26:56 PM
 #18

Im not sure if i understand it correctly...

The only way to get BTC to an exchange to "sell" them is via sending them from some (my personal for example) wallet, and this transaction is always visible on blockchain...

Or am i wrong, thats the only way to get BTC to exchange?

One route to sell coins is to send them with a blockchain transaction to the exchange over the bitcoin network. But you can wire fiat currency to the exchanges. For example you could wire 10 million dollars to bitfinex if you were stupid enough. You might then loan btc from someone in a swap and sell them on the exchange - you might manipulate the price downwards significantly. You could then close your short contracts for profit. You then take your money out of the exchange. End result the price moved, but no bitcoins moved on the blockchain.

Thanks, this is usefull and straightforward, didnt know about this possibility on bitfinex (that you can "swap fiat for BTC" "outside" the normal market on exchange, interesting).

Why didnt anybody tried it already on bitfinex? it seems as a nice way to make money, and it should work... didanybody tried it already, are there any rumours surrounding this
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October 30, 2014, 03:00:53 PM
 #19

Bitcoin price has nothing to do with the blockchain. All market trading is done with imaginary tallies in a trading program. No bitcoins are actually traded from markets. They are only deposited and withdrawn depending on how well you play their trading computer game.

+1
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October 31, 2014, 04:33:18 AM
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No one can predict that FlashCrashes were always coming inadvertently

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