Topic: Bitcoin looking very weak at mid $600 - page 2. (Read 4577 times)

Looks can be deceiving. OP get ready to buy back in before we rocket up again.

Still think we will see higher prices in April

Buyer if we go back to the low 500's

+1

i have outlined in the past the basic idea here, but in more rigorous terms using concepts from game theory applied to the concept of market efficiency. the reasoning behind why even individuals with large amounts of capital in proportion to the average market participant would find it difficult to manipulate the market in any profitable way goes as follows:

Market efficiency
the market moves to minimize traders' profits -- this is a consequence of efficiency. in a market that is perfectly efficient, there would be zero excess profits. by my own experience and the collective experience of this subforum, i think we can safely assume that the bitcoin price function does not exhibit this kind of perfect efficiency (and i would argue that no market does, but that's another topic).

Profit-minimization in (mostly) efficient markets
each time profit is extracted from the market, it causes the price to converge on its "true" price. that is, the process of correctly anticipating market behavior and extracting profits makes the market more efficient. for instance, speculators who can guess where a natural price support is (which is determined by the emergent behavior of the sum total market participants) will exert buying pressure below this support, thereby strengthening it. a mostly efficient market quickly recovers from flash crashes like the one on 24 Feb by this exact process. if the bitcoin price remains undervalued for too long, excess profits can be made by buying low and selling high (and vice versa), so speculators enforce efficiency by buying sudden dips that have a disproportionately large effect on price due to slippage. this is also the mechanism for "corrections" due to profit-taking during periods of rapid price gains.

The cost of market manipulation
now, in this way, the market rewards successful speculators with the few spare profits available from lapses in efficiency like in the examples above. following from this relationship between the theoretical "true" value and the actual stochastic price function which approximates this value, the most profitable move is always the one which enforces efficiency, that is, the move which converges the ticker price to this underlying "true" value. in other words, generally speaking, the most profitable move is one which anticipates trends, not contradicts them. in fact, it also follows from the above relationship that direct price manipulation would be costly, not profitable, because any true manipulation would move the price further away from the "true" price, which is equivalent to creating more inefficiency. this correlates to more excess profits, and the game is zero-sum! it follows that the profits created come from the pocket of the manipulator.

The trading metagame
i do feel i must address the idea that certain clever manipulators may be able to beat a metagame of inducing signals in indicators upon which other traders rely (e.g. creating a "false" crossover). in this situation, the manipulator tricks other market participants into inducing inefficiency through their actions, and then scoops up the excess profits thereby created for themselves! this is a nuanced kind of manipulation that relies on the metagame revolving around anticipating the strategies of other traders. however, this meta-strategy is subject to the same pressures it exploits, as any other market participant may be able to consistently anticipate it and scoop up the profits before the original manipulator does. in this way, the manipulator is still bound by the rules of the "game", and cannot use this meta-strategy to consistently extract excess profits. once the manipulator's own behavior becomes predictable, it is no longer profitable.

in closing: the market incentivizes all participants to enforce trends (by means of profits), and deters them from violating them (by means of costs),

and the corollary: any manipulative meta-strategy that can consistently extract profits can and will be exploited by other participants and thereby neutralized by the same principle.

i hope this issue can now be solidly put to rest. however, i have a sinking feeling i'll be making the same post in another six months or so

--arepo

No  no no.

These guys bitcoins aren't worth 10x as much

Because they are buying and selling them every week, in a desperate attempt to make a few dollars.

Now they can't arbitrage and Bitcoin isn't going haywire up and down.  too bad so sad.  #daytraderproblemz

Buy and hold.

Some of mine are worth little more than half of what I bought them for...

Fortunately for me I sold all of the vaporous little units of nothingness long before they got into such a state.

I'd love to print this, frame it, and hang it in the speculation forum lobby.

But there are tons of other people making moves at key lines of resistance, and the only reason that they aren't called "manipulators" is because they trade a few BTC's rather than hundreds or thousands.  That's really about the only difference.  Imagine being at an auction house and claiming that the only millionaire in the room who keeps winning item after item is manipulating the auction.

Of course there are. My statement stands.

The flip side of that is that if you think that there aren't whales in this market using their buying and selling power to initiate moves at key TA 101 A points, in order to cash in on any stampede that they happen to cause in either direction......

.......then you just haven't been paying attention.

Actually i bought in at the bottom of this mornings rally after watching it simmer and get ready for a few hours. It seemed pretty organic to me, like runners chafing for postion at the start of the race.  Not at all like the beginning of the week. And the people jumping on were with pretty medium amounts.

I think you are discounting the large numbers in the middle, who are neither burned out nor starry eyed, but believe in BTC and are cagily trying to just stay with the market, in both directions.

just my 2 satoshi.

The problem is that he has abused that word to the point that it no longer means anything coming from him.

Good deal. Conspiracies are fun but don't let 'em cloud your judgement. Compare the April rally/crash/uncertainty/certainty/just kidding/doldrums/fear/doubt/whew with November's rally and there are some surprising finds.

Believe me, I keep it dumb.

#1 determinant of my Bitcoin outlook is intuition, perhaps with a pinch of distorted emotional bias if I get too involved arguing with Nutters on this place.

The arms and legs of the TA (which I have only the most rudimentary grasp off) come afterwards.

Mat you think way too much. Dumb it down. Price action reflects everything that is happening in the market and doesn't mix well with theories based on incomplete information. As much as TA is an art form, keep it simple. I tell my music students this all the time: Dumb it down, keep it simple and don't overthink technically or you'll walk onstage and be screwed.

I wasn't actually aiming that comment at yourself. But at a couple of the other fannies who were calling bottom at $800 and 'predicting' Bitcoin to take off to 10K from there.

Well I admit I have sucked up to this point, but I was using Coinbase with it's 4 day wait. I think I can do some good now that I'm on a real exchange, but if I lose I will blame noone but myself.

The problem with using the word 'manipulation' is that idiots get this confused with actual problems like 'insider trading'.

The word 'manipulation' is most frequently used on these forums to reference ordinary traders that simply have lots of money, i.e. 'whales'.  These people are the exact same as everyone else in that they're just trading and trying to make a profit.  Calling this 'manipulation' is stupid because this makes everyone a manipulator.  But, erecting huge buy/sell walls or pumping and dumping isn't manipulation -- it's called being wealthy.

Save the term 'manipulation' for devious practice like insider trading and otherwise.

I would suggest that Joe Public is not chomping at the bit for Bitcoin right now. To the untrained eye, a quick glance at the Bitcoin chart makes for scary viewing indeed, perhaps because it actually is a very scary chart. The popular image of Bitcoin right now is a world of shoddy exchanges that have a habit of disappearing with everyone's money. Meanwhile, there is a large amount of potential selling pressure going around due to all the stolen coins which seem to be getting ground down into smaller and smaller amounts in order no doubt that a large proportion of them be turned into cash over the course of time.

I suspect that their are still a lot of dreams of avarice in the market anticipating $5K Bitcoin by Dec 2014, but the reality is that failing another X-Factor (collapsing Ukraine economy without a bail-out could have done it), Bitcoin needs to lose a lot of the hot air that has inflated it up and find some kind of genuine equilibrium price range, where long term investors are happy to absorb any selling pressure in the market until:

A) A real Bitcoin economy establishes itself and starts to take Bitcoin forward

B) Another crazed pile into Bitcoin occurs, possibly due to some fucked up situation in the world.

The avaricious dreamers may be happy to pile into Bitcoin as the 4Hr MACD crosses down in the 500-600 range, but who is gonna pile in and take Bitcoin higher? Doesn't seem to be very much interest to me.


Who said anything about manipulation? Not me. Just looked like moned TA101A noobs trying to beat momentum as important 4hr indicators signaled switch to positive trend. Speculator driven, but not driven by enough speculators and certainly not any fresh capital which is what Bitcoin needs.

We will see how things pan out. But someone contributing to this thread has a good track record with these types of things whilst others here have a woeful history of calling Bitcoin.

Knew you would make another manhipuhlacion post. Do yourself a favor and take a few weeks off.