Topic: Analysis - page 334. (Read 941596 times)

First Page!

I find your new nickname hilarious. 

But they don't.  The gap between MtGox and other exchanges is growing.  If it was linear that one be one thing but it isn't so charting MtGox price is charting the output of two independent variables, the risk premium and the exchange rate.  Say Mtgox price doubles tomorrow because there is a scare that their bank has been seized.  Now assume the price hasn't doubled on any other exchange.  Does MtGox going to ~$200 break the trendline?  I guess it depends on which trend are you charting, the risk premium, or the true exchange rate?

Which trend are you charting?  It can't be both if they are moving independently of each other.

As long as other exchanges repeat MtGox trend, I use gox data.

Death and Taxes pretty much summed up my opinion. Trading on Mt. Gox means trading at a much higher risk premium (over 10% ?!?) and I wouldn't consider that to be an element of price discovery for bitcoin itself. I think you would have a better analysis of Gox prices if you charted out the magnitude of the risk premium over an average price of the other populated exchanges. As that premium expands/contracts the price would be less/more reflective of the underlying asset, and since Gox is still pretty much the flagship exchange it would mean any technical analysis would represent the overall market a little worse/better.

Without some sort of way to measure that element though, I wouldn't put much faith in any analysis of Gox prices as they relate to the overall market.

Is it possible to really do any analysis on MtGox "fake" numbers?  I mean the MtGox price is reflecting a risk premium that didn't exist (or existed to a lesser extent) in the past so any trends drawn from it are based on a false assumption that the "risk premium" has been consistent.  It hasn't, it has been rising over time.  As an example I wouldn't see MtGox price rising >$120 to have any trend validity if the price on other exchanges remains <$100.  That certainly could happen if the spread widens further as confidence declines.  On the other hand if MtGox resolves their issues I could see the MtGox price fall dramatically as the risk premium shrinks but that says nothing about the overall exchange rate trend if the price doesn't fall on other exchanges.

Another way to put it.  Each % that MtGox trades over bitstamp (or the average of all other exchanges if you want) reflects the risk that one will never get their USD.  That risk premium can trade independently of the Bitcoin exchange rate trend.  In theory you could have overall prices trending down but MtGox prices trending up at the same time.  Unless you normalize for that you are essentially charting the product of two independent variables and assuming the output reflect the change in one of those variables.

Old topic closed. lucif nickname rebranded. Analysis reloaded.

Determining trend.... Mid term trend is undefined. Market makes decision, and if you are looking for trading advise - here is it: Stay away from trading now, keep your funds in most comfortable position for you - fiat or btc.

The last figure I drew was this potential triangle.