The bitcoin price crashes - here's why

[Kimba_Coinarch]

It was a day that left bitcoin believers horrified, panicked and quite probably far poorer. The bitcoin market has crashed by around 15% in the last 24 hours, driven by a mix of fundamentals and fear. Our theory is that the price fall was in no small part driven by the combination of increased bitcoin mining difficulty and the prolonged bitcoin price declines, events which have led to some large cloud mining outfits like Cex.io and GHash.io shutting down and rumors of others being in trouble (and perhaps quietly winding back their operations).

The pull back in mining has in turn impacted block propagation times, with confirmation times of up to 2 and a half hours in yesterday’s session, far longer than is ordinarily the case (see blockchain.info screen capture below). This may have added fuel to the bearish fire, with traders and miners alike selling off coins as fear took hold. Naturally we cannot be certain that our theory is accurate, but it does seem to hold some weight.

The bitcoin price opened at 268 on the BitFinex charts and fell steeply soon after the open on the back of huge sell orders which dominated early trading. The selling pressure continued to mount over the next few hoursand caused the bitcoin price to hit a low of 226. At this point, there was some attempt from the bulls to hold the price and drive it up moderately to 230-235 where it currently sits.

What to Expect Today? We are expecting atleast a brief pullback towards the 255 resistance level, at which point the question of ‘how low can we go?’ could reasonably be asked. The panic that is currently gripping the market is leading some to speculate that the next bottom will be the psychologically important 200 level, while others think the price could fall well below this. To dig into this question further, we have taken a look at the historic 1-week bitcoin price chart.

The red horizontal line in the chart marks the point from which the infamous Bitcoin bubble took off in 2013, with the price exploding to its all-time high around 1200. The patterns in the chart suggest that 133 is potentially a solid bottom in the event that bearish sentiment continues to prevail over the coming days and weeks. Looking at the nearer term, we think 200 fits the bill as a likely support level. We do not expect any violent rebound.

Conclusion (On Daily Charts)
Current Mood: Strongly Bearish
Moving Averages: Strong Sell (0 Buy 12 Sell)
Technical Indicators: Strong Sell (0 Buy 11 Sell)

See pictures at http://us3.campaign-archive1.com/?u=c030d59939a82ed2a757c343e&id=ad47849a78&e=61b9c30df2

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[tins]

The bitcoin price opened at 268 on the BitFinex charts and fell steeply soon after the open on the back of huge sell orders which dominated early trading. The selling pressure continued to mount over the next few hoursand caused the bitcoin price to hit a low of 226. At this point, there was some attempt from the bulls to hold the price and drive it up moderately to 230-235 where it currently sits.

Day isn't over...I was able to just buy at $219 (Coinbase)...if it goes further down, I'll be even more of a buyer.  

[cyberpinoy]

You forex "Experts" or Forex wannabee make me laugh so hard. What you saw in bitcoin price can be charted all the way back to June of last year. the same thing has happneed over and over month for month the past 7 months. There are no fundamental analysis in bitcoin possible, there is no demand for the coin. Anmd how ironic I told this whole community back in June if someone does not get off their ass and create a demand for this coin it will tumble it will fall, and if someone with 1000s of bitcoins in thier wallet doesn't wake up and do it now those 1000s of bitcoin will be worth pennies. Call me what you want, rationalize this however you want. But for ALL OF YOU idiots on here who do not UNDERSTAND currency trading let me give you somne clues. in order for a currency to hlde true value it MUST have a demand, in order for high dollar investors to really get involved, there MUST be a demand. THERE IS NO REAL DEMAND FOR BITCOIN. gambling is NOT a demand, anonymity is NOT a demand, have the ability to anonymously look on porn sites is NOT a demand.


Ask yourself if you were a multimillion dollar investor, would you rest hundreds of thousands of dollars in an investment where the best thing it had going for it was a bunch of gamblers and porn watchers?

NO YOU WOULD NOT!!!. SO why do you expect real multimillion dollar investors to.

where are the bitcoin devs? why do you never see them here? why dont they even support their own community of believers and invesdtorts. Oh yea thatys right they are in the Bahamas drinking mixed drinks showering them with the fruits of our labor. opening their Ipads once a week to seemingly work on the "protocol" which has no problems at the present. They need to get their priorities straight. Bitcoin lost everything it had going for it when Satoshi disappeared. these jokers who took over were just another get rich quick bullshit scammers. And that is why bitcoins price is never going to rebound Unless the community does something. For em I would not do a thing for bitcoin. I would do something usefull for Dogecoin than Bitcoin. At least the Dogecoin devs are trying to make a demand for thier coin they are not just sitting on thier ass waiting for a handout.

Gavin Andresen said it all when he released his stupid ignorant slap in the face to all bitcoin investors by telling new people NOT to invest in bitcoin. No matter how youb look at the add to a technological idiot it says DONT BUY BITCOINS!!!

For you developer lovers and peons who want to defend the Bitcoin devs and the people involved in bitcoin heres I CALL BULLSHIT. ANd I call your bluff and make you look stupid by your own people now



Stop defending the Devs like they are some kind of Gods, its thier responsibility to create a demand for the coin its been 6 years time for them to go to work. Its thier job to make sure the coin succeeds, time to go to work. Its been 6 years no more infancy, no more bullshit DO YOUR DAMN JOBS DEVELOPERS!!!!

[tokeweed]

You forex "Experts" or Forex wannabee make me laugh so hard. What you saw in bitcoin price can be charted all the way back to June of last year. the same thing has happneed over and over month for month the past 7 months. There are no fundamental analysis in bitcoin possible, there is no demand for the coin. Anmd how ironic I told this whole community back in June if someone does not get off their ass and create a demand for this coin it will tumble it will fall, and if someone with 1000s of bitcoins in thier wallet doesn't wake up and do it now those 1000s of bitcoin will be worth pennies. Call me what you want, rationalize this however you want. But for ALL OF YOU idiots on here who do not UNDERSTAND currency trading let me give you somne clues. in order for a currency to hlde true value it MUST have a demand, in order for high dollar investors to really get involved, there MUST be a demand. THERE IS NO REAL DEMAND FOR BITCOIN. gambling is NOT a demand, anonymity is NOT a demand, have the ability to anonymously look on porn sites is NOT a demand.


Ask yourself if you were a multimillion dollar investor, would you rest hundreds of thousands of dollars in an investment where the best thing it had going for it was a bunch of gamblers and porn watchers?

NO YOU WOULD NOT!!!. SO why do you expect real multimillion dollar investors to.

where are the bitcoin devs? why do you never see them here? why dont they even support their own community of believers and invesdtorts. Oh yea thatys right they are in the Bahamas drinking mixed drinks showering them with the fruits of our labor. opening their Ipads once a week to seemingly work on the "protocol" which has no problems at the present. They need to get their priorities straight. Bitcoin lost everything it had going for it when Satoshi disappeared. these jokers who took over were just another get rich quick bullshit scammers. And that is why bitcoins price is never going to rebound Unless the community does something. For em I would not do a thing for bitcoin. I would do something usefull for Dogecoin than Bitcoin. At least the Dogecoin devs are trying to make a demand for thier coin they are not just sitting on thier ass waiting for a handout.

Gavin Andresen said it all when he released his stupid ignorant slap in the face to all bitcoin investors by telling new people NOT to invest in bitcoin. No matter how youb look at the add to a technological idiot it says DONT BUY BITCOINS!!!

For you developer lovers and peons who want to defend the Bitcoin devs and the people involved in bitcoin heres I CALL BULLSHIT. ANd I call your bluff and make you look stupid by your own people now



Stop defending the Devs like they are some kind of Gods, its thier responsibility to create a demand for the coin its been 6 years time for them to go to work. Its thier job to make sure the coin succeeds, time to go to work. Its been 6 years no more infancy, no more bullshit DO YOUR DAMN JOBS DEVELOPERS!!!!

it's not the devs' job to create demand.  what do they know about business, markets and economics.  their job is to improve the code and explore other possibilities and uses for the protocol.  

the companies who are building on top of bitcoin should be the ones marketing it and creating demand for it since their prime motivation is profit and creating a btc ecosystem.

[johnyj]

Bitcoin is crashing because the liquidity of USD is dramatically worsen since the stop of QE3, now every raw material and other foreign currencies are going down together with bitcoin, spare assets are being sold out in exchange for USD because there is no 2.8 billion USD trickle down from FED every day

Soon we will see some bank run into liquidity problem and the rise of interbank lending rate. Under such a situation, FED either print more money or let banks die. If they select the first, bitcoin will be pumped up again just like the previous QE. If they select later, banks who ran out of fiat money will turn to bitcoin holders to borrow bitcoin. Unlike USD, bitcoin's value is very scalable, you could just borrow 1 bitcoin and use it as 1 billion USD, then all their liquidity problem will be solved

Imagine that in 2008, when Lehman Brother had their problem, if they could just turn to bitcoin holders and borrow some bitcoin, they would not go down and the financial crisis might have been avoided. But there was no bitcoin in 2008  

[Flashman]

Bitcoin believers are barely batting an eyelash, it's all the "fairweather friends" running around like chickens with their head cut off.

[AhmedAshraf]

Bitcoin believers are barely batting an eyelash, it's all the "fairweather friends" running around like chickens with their head cut off.

Your'e right, they usually are registered around November 13 when the bubble started and just came here to get rich.

[mayax]

cyberpinoy is right

yes, there is no demand. ONLY 1 MIL real users in 6 years.

I think any other e-currency from market has triple than Bitcoin and without any lobby in media.

it is a bubble, few people earned a lot of money (mostly exchangers who manipulated the market and few others...a gang) and now...someone must pay the bill.  

[jonald_fyookball]

those 1000s of bitcoin will be worth pennies. Call me what you want, rationalize this however you want. But for ALL OF YOU idiots on here who do not UNDERSTAND currency trading let me give you somne clues. in order for a currency to hlde true value it MUST have a demand, in order for high dollar investors to really get involved, there MUST be a demand. THERE IS NO REAL DEMAND FOR BITCOIN. gambling is NOT a demand, anonymity is NOT a demand, have the ability to anonymously look on porn sites is NOT a demand.

For someone who purports to know a lot about trading and markets, you seem to not understand that the market knows more than you and what you deem to be important or assume are the motivators.

[justusranvier]

Bitcoin is crashing because the liquidity of USD is dramatically worsen since the stop of QE3, now every raw material and other foreign currencies are going down together with bitcoin, spare assets are being sold out in exchange for USD because there is no 2.8 billion USD trickle down from FED every day

Exactly so.

Right now Bitcoin is shedding the speculative adopters because for them it makes more sense to hold USD while the debt singularity is busy devouring Dollar liquidity.

While this continues Bitcoin will see organic adoption rather than speculative adoption.

The organic adopters are were already in the informal economy, and those who get pushed into the informal economy due to the effects of USD appreciation.

Sooner or later, appreciation of the USD is going to cause financial distress for indebted Americans (statistically speaking, all Americans). As more people get pushed over the edge and end up facing the gamut of civil judgements and their associated wage and bank account garnishments, the fraction of people who need Bitcoin's censorship resistance will increase.

Someone who's facing a 100% garnishment of what little money they have in the bank would do better to have all of that value in Bitcoin, even if there's a potential 90% downside risk. Keeping 10% is better than keeping 0%.

The last time we saw this kind of mass financial distress was 2008, and just like we saw then people will adapt to financial distress by joining the informal economy.

The major difference between now and then is that "cash under the table" income is no longer an option that's restricted to blue collar labor.

The ability to get paid by clients anywhere in the world without moving funds through the banking system means that tens of millions of middle class professionals now have the same opportunity. In fact, the are arguably in an even better position because anyone who produces digital deliverables can now access a global client base.

[grendel25]

What does it all mean?  How low will it go?  Does this mean it's still better to buy btc or invest in mining gear?

[Bobsurplus]

It's going to the $100 range...

[Zer0Sum]

People who think Bitcoin (a toy virtual asset)...
Has ANYTHING to do with the USD are crazy = zero correlation.

The USD is up 20% in recent years because there is huge global demand...
Russia, Africa, South America... everywhere USD is wanted and used to pay for IMPORTANT things.

The Fed is fucking brilliant...
They are printing shiny pieces of paper and selling them for $100 to people in the Third World.
 

[tokeweed]

What does it all mean?  How low will it go?  Does this mean it's still better to buy btc or invest in mining gear?

who knows...  just watch it go down, go sideways, then trend up again.  and beware of fake reversals aka the dead cat bounce.

[grendel25]

What does it all mean?  How low will it go?  Does this mean it's still better to buy btc or invest in mining gear?

who knows...  just watch it go down, go sideways, then trend up again.  and beware of fake reversals aka the dead cat bounce.

Would that sort of dead cat bounce be something similar to the typical price increase after conferences?  Seems like it to me.  Although.. I can also imagine people taking advantage of such a bounce especially given the current trend in price decrease.

[halfawake]

A miner dropping out, seriously?  No, the obvious reason for the crash in price is that the recent hack at Bitstamp panicked a lot of people, who started selling.  I can't say that I blame them, really.  I'm starting to wonder if I'm dumb for not selling earlier, but I always knew it was a gamble and high risk investment buying bitcoins, and I sleep soundly at night even with my paper loss.  I'm still hopeful that the price will go up again eventually.

[axel2078]

To me, this is just an opportunity to buy more bitcoin at a much cheaper price.  I have no doubt the value will climb again, but I have no idea how long it will take.

[notbatman]

@PINOY, DEV's JOB LOL

I should remind the audience that Bitcoin is free and open source.

[QuestionAuthority]

If it keeps dropping like this we're all going to get rich again.

[pooya87]

i was shocked when i saw 200$ price at first, and the first thing that came to my mind was that it might be a good opportunity to buy. but now i am not that sure