Topic: A lot of talk about $50, but the very bottom may be lower - page 2. (Read 7913 times)

so the cycle continues,
people will again begin to spend less money on mining which means more money directly into bitcoin (not necessarily but likely)
generation I of asic miners will keep mining
until generation II+ starts mining and generation I will keeping mining, probably in a larger proportion than the GPU/FPGA miners are currently with gen I

either way, when difficulty increases, price will have to eventually follow given the greater distribution of bitcoin creation.  i don't see the logic in mining as a cause of concern for price dropping


so as miners realize they will make less and less per GH, they will suddenly dump for a loss after they realize that it is actually that much harder to procure bitcoins?

There is at least 4.5X increase in efficiency available using industry standard processes over the 130nm ASICs currently being shipped.  150X current difficulty and these 130nm chips won't outproduce the electricity they take to run.

If difficulty keeps going up, that means there's less BTC/miner. This means every individual miner has to sell their coins for a higher rate as you noted in the first quoted paragraph. What I don't understand is why a miner will shut down, seeing as ASICs are at basically peak efficiency. They have to keep mining because no one will buy their ASICs from them.The only way they can recoup their investment is to keep mining. Why will they suddenly liquidate their coins once mining profitability is squeezed? I have to say, most miners are in this long-term as well. That's just in their nature.

Rampion's analysis is some of the best I've seen, but everyone seems to be missing a critical factor.

BTC can decline simply from the flow of newly minted coins accumulating on the bid side of the ledger without anyone 'panicking' and choosing to unload long-held coin hoards.  The price of BTC very very closely follows the bid/offer ratio, any change of the number of offered dollars or number of offered Bitcoins has a decided impact on exchange rates.  Each day nearly 4K BTCs are generated (during these times of slightly faster blocks as difficulty is constantly trying to catch up), so unless ALL 4K coins are bought and permanently removed from that side of the ledger you will see a value decline.

In a broader sense BTC valuation is supported by ONLY the daily inflow of new dollars to buy up new coins.  E-commerce transactions have no real price supporting ability because dollars are just transiting through BTC at the volatile exchange rates with both parties buys and sells canceling each other out.  At 4K BTC a day we need to see $400,000 a day be expended to buy coins, the current bid depth of ~10 million can thus absorb about 1 month worth of coins, likewise the ~100K BTCs offered represents about a month worth of mining.

Now one must also consider that miners, particularly ASIC miners are in a position to 'pre-hoard' most if not all of their coins due to their low production costs (ware as a GPU miner at the margin of profitability is presumably selling more coins to cover electricity costs).  Also the typical ASIC buyer is hyper bullish on BTC.  So it is very likely that far less then 4K coins are even flowing into the exchanges and any sell off of BTC happening now are occasional profit takings from old retired whales or small holding non miners who have lost confidence.

At some point enough profitability is squeezed out of the mining that the option of pre-hoarding will end and we will see full liquidation of new coins, only then will we find the bottom.  And it will also be AFTER HASH TOP, as in 2011 the final stage of the bubbles deflation occurs after miners realize they have over extended and their hardware is no longer profitable and some of them shutdown.  Were no ware near the Hash top as it would be proceeded by a slowdown in hash rate growth, this is because of the inertia in the ASIC shipments and their high efficiency which means they are still profitably to run now (but probably not to order).  I expect the Hash top in 3-6 months and the ultimate market bottom ~3 months after that.

Agreed that changing plans "on the go" is a mistake 99% of the times. The fact is that we usually change our plans based on emotions (e.g. "what a rally, if I sell now I may kick myself if the price keeps rising!"), while originally those plans were established through cold and rational analysis.

It costed me a few lessons to learn that changing plans on the go is -EV

Sounds like a wise move to lock in some profits. I've also learned that plans changed on the go are mostly costly endeavors. Especially when you become bullish when price just has gone up, or bearish when price just has gone down. Stick to the plan! I say to myself on a daily basis.

Nobody ever went broke taking profits

You're trying very hard to convince yourself this is a trap but you don't sound as convinced as you were before. I think it could very well be a trap, but the case for a trend reversal is getting stronger by the day. Sentiment seems much better now, Gox issues have subsided for now and confidence is returning. My initial thoughts were that we were going to see an epic bounce up into the triple digits and then a gradual fall again until we hit a new low of 55-60, but I'm getting more optimistic now which I admit is also kinda dangerous. My initial plan was to sell 50% of my bitcoins when we hit triple digits again, but now that we got there I am getting second thoughts and want to hold on to them. What if this is a trend reversal and we did hit bottom at 65? The smart thing to do is probably to just follow my initial plan, it's never wrong to take some profits when you can.

Based on what? This seems to me a trap, with a few positive signs for the bulls (rally on volume, etc.), but in no way is the confirmation of a trend reversal. The speculative mania phase is definitely dying (for now), so "back to normal" means that huge spikes are followed by big correction, and big crashes are followed by huge bounces.

Everything is playing pretty much as expected, I think that even the biggest bears expected huge bounces on the way down. And we are definitely on a way down since April, 10th.

we've been in a primary uptrend since pizza

The long term trend is up, and one of the things I've learned about trading is that it's usually better to follow the long term trend. Following the short term could leave you burned badly, but also give you great profits if lucky. Lucky being the keyword here.

you guys talking about 50ies...    but we are leaving double digits for good...

...And we indeed bounced straight on the 200 day EMA, which is triggering what will probably be the biggest trap of this summer (see blue line):



This is quite standard stuff, so I really don't see why you get so excited.

The fact that some of you are so emotional, calling names to the people that share bearish analysis, is just a proof that the market is fearful, or very anxious at least. Its like you think that us "bears" only want the price to go down. You are mistaken, 99% of the people in here wants BTC to grow, we are just acknowledging a trend and acting accordingly. Since April 10th, the trend is down - and its still is.

 

bump.

Hi all the stupid bears in this thread....

I just want to say.... thank you

Even though things aren't looking good (price wise), you are pretty brave to short in an extremely oversold market and right on support.

Good luck, I'm sitting any bounce out for now.

I don't care if you like playing casino. But next time, don't ask other people their opinion

So we went from $50 may not be the bottom to $50 will most definitely not be the bottom? Don't see how you can be so sure of that, I think even 65 could have been the bottom although I estimate the chance to be 75% that we're going lower still after an epic bull trap the coming week(s). I wouldn't bet anything on it going lower than 50 though, it's possible but right now I don't see it in the market.

too early to go long or short, just wait

it's way too risky, even without leverage5 (!)

Just be patient =)