Topic: I forced the 10 day high last night. What do you think about that? (Read 3873 times)

If the exchange rate is 10 usd per btc, Al has 10 000 btc and Bob has 100 000 usd, by trading otc they both benefit. Al looks at the exchange and realizes the price would plummet if he tried to sell them all at once, leaving him with fewer usd than he would like, Bob looks at the exchange and realizes the price would skyrocket if he tried to buy them all at once, leaving him with fewer btc than he would like. So if they come to an agreement to exchange at the current rate off the exchange, then they both come out ahead.

Both the OTC seller and buyer are splitting the difference by using the current exchange price.

Buying and selling is always easier said than done.  One of the fallacies that I see above is thinking that an OTC seller is going to neglect to calculate that if you were to buy on an exchange, you'd be facing increasing resistance to your buying.  So the OTC seller is going to split the difference, that way, you both win.

My post links to the depth on Mt Gox, that's how I got the number. But bitcoinbear is right about people pulling asks as you are buying, something that doesn't make sense to me because it should be atomic and immediate but Gox allows it to happen. Also, people can bid as you are buying in the hopes of flipping the coins, so this could also lead to less.

I Seriously doubt there is 1.6 million $ worth of BTC depth at current price on OTC, I doubt there is even 1/10th the depth that mtgox offers....

If you buy it slowly (6 months / ~555 coins a day) on Gox, you should be able to buy all your coins without pushing the price up that much...

It depends on how you do it. If you find a seller (or several sellers) with enough bitcoins then you could do it all otc for the current rate. If you try to do it o mt gox, you might not even get that many if people are able to pull their asks quick enough.

A buy of $1.6 million would only get you BTC86810.

It's all low right now

Ok, what's your point?

In city of Shanghai where I live, an apartment suite of premium quality can be sold for 10 million Chinese Yuan which equivalents to US $1.6 million. If someone sells a suite of this kind (there are at least a couple thousands of them) and uses the money to invest into bitcoin, he can get 118+ thousands BTCs and thus enters into the World Top 10 Fortune List of Bitcoin.  

comma separated value.

Edit: http://en.wikipedia.org/wiki/Comma-separated_values

So, following your explanation about good and bad rallies, my question is:

1) Is this rally a good one or a bad one?

and consequentially

2) Will the price go below 12.5 usd in the next days or keep above 13?

I disagree.

You are assuming that the price of bitcoin reflects (or should reflect) it's current usefulness as a medium of exchange for the bitcoin economy. That's only partly true (I'm guessing the price of a bitcoin would have to be 0.25 USD for the current supply to be able to "run" the current bitcoin economy).

A large part of bitcoins value comes from the expectation of future usefulness as a medium of exchange and it's usefulness as a store of wealth.

You cannot remove these large components because bitcoin is money and that's just part of that.

A 7% rally in bitcoin is not "bad for bitcoin". It might be annoying for the people using bitcoin as a medium of exchange because those fluctuations introduce pricing problems, but that just has to be accepted and worked around.

A 7% rally doesn't have to be "pump and dump" either. It can just be the case that the expectation of future usefulness has risen (due to some news) or speculators have adjusted their expectations for any number of other reasons.

A rally can be bad or good, depending on what's behind it.

Best time to buy is when you start to see questions such as "is this the end of Bitcoin?"

While that may be "the principle", I don't believe that it actually works. Two reasons: 1. There is no way to know if or how your transactions actually affect other people. 2. You don't know if you are the one being manipulated or not.

We have essentially been consolidating for several weeks now.  Had to move at some point.  Just dollar cost average into BTC and stop looking at the chart.

BTFD

Illiquid markets, such as Bitcoin are easy prey to manipulation.
The principle is to draw attention by buying a pretty big quantity (compared to the daily number being bought and sold) and once this attention is drawn, more and more people will start buying trying to jump on the bandwagon and trying not to miss the train.
This is on a larger scale exactly what happened in the summer of 2011 when the price of a BTC went all the way up to 30 USD a piece.
Such phenomenons normally end up with a massive selloff, (exactly what happened in the above mentioned example when the price went down to 3 usd, losing about 90% of its value) where a lot of late joiners got burned, lost lots of money and abandoned the game saying it's rigged, when the only thing that was rigged was their intelligence.
Rallies and inevitable subsequent bubble bursts aren't good for bitcoin.
The movement we experienced in the last 2 days (about 7% up) isn't good for bitcoin.
What we should need and hope for is a slow movement up, of about say 1-2% each week, due to a growing number of bitcoin adopters and to the fact that this adopters demand SLIGHTLY outpaces the number of bitcoins being sold by miners and people that accept payments in bitcoin but then need to translate those into fiat money.
Everything else should be seen as a danger for bitcoin and not cheered as most people do.
Rally is bad, not good!
We all need to understand that or we will keep being a bunch of goofy beginners easy prey of speculators  

It implies something useful, though: when it breaks out, it will move in that direction with considerable momentum.

I hear something like this all the time: "It has been trading sideways and it is going to break out, either up or down" Well, DUH! Of course, it is going to "break out" after trading sideways. There is no other possibility.

It was clear we were going to break out of that 12.5 to 12.7 range we had been trading sideways in for roughly 5 days. It was less clearer which way.

He might not be responsible for the breakout and subsequent rally, but you could say he decided on the timing.

Also: he made quite a killing.

@smoothie

+1

This is pure entertainment when people start jumping up and down like little girls because the bitcoin price goes up.

Next stop: Sobbing, bitching, whiny, confused stage.


"Why did the price fall?  "

... because someone was smart enough to sell high. 

Unless you can prove it wasn't a total coincidence, you really can't claim to have had any effect. A couple of weeks ago, I bought 10,000 LTC and it had no effect on the market at all as far as I can tell -- and LTC is far less liquid than BTC.

Don't underestimate the effect a rogue 700BTC market buy.

I believe OP 100%!

Couldn't have said it better myself 

But this very could have triggered a bot, which triggered a few other bots, which started the rally. Or it could have had no effect at all. Doesn't really matter because we don't have a time machine to compare the results.

OP TRANSLATION:" I peed and all the tides of the ocean changed because of my piss."

Give some credits when credits are due, guys! Otherwise who would be brave enough to start a rally next time?

That would only cost $1,366,236. No big deal 

A ten day high is nothing for bitcoin. Now, if you could buy up past the all-time high (about 32 usd/btc, less than 3x what it is at now), that would be something to talk about.

Thanks for the post, i'm now sure i want to wait to invest

Obviously not. My point is that maybe breaking a 10-day high provided psychological relief after the post-halving uncertainty, thus opening the floodgates for the subsequent buying volume.

The ask price is now 12.94.

You still buyin up?

Didn't think so

Well, I started buying at 12.66. So yes, it was the reason it went up to 12.75, and it only took seconds to do so. I'm not claiming anything else about the past 24 hours. But in particular, could the past 12 hours have been a result of this initial jump?

I realize that this kind of volume represents a drop in the ocean on Mt.Gox, but is the psychological effect of High/Low price not volume-independent?

Post again when you've got 70000 BTC.

Well 700 BTC are not enough, but in general if you are the first who kicks off a massiv buy or dump, you'll surely get followers. I think thats not happening too seldom on Mt. Gox. Very risky investment strategy^^

So even though the price has been drifting higher ever since the WordPress announcement, you seem to think that your 700btc purchase is the reason it went up during the past 24 hrs?

Don't overestimate your effect on the market

Think you should post your CSV to prove it

I bought around 700 BTC at market price and drove the 10 day high to 12.75. I first had to sell BTC to get the money, and by the time I sold and bought, this market experiment cost me around 15 BTC in fees and personal losses. But... psychologically, it obviously had an effect on the market. By popping the 10 day plateau (and the 3 day post-halving uncertainty) I think it injected some short-term confidence in the market. When I wake up this morning I see a 12.93 high. Well, that wasn't me. But obviously it took off. And now we're around 12.85 and I've already covered my losses!

So surely this is a form of sentiment manipulation? I guess we cannot manipulate supply and demand, but we can manipulate emotions which drive them. Emotions are tightly wound around certain symbolic price points, so it would make sense that forcing the price above or below those price points (albeit artificially) could be a catalyst for real movement around those price points.

What do you think about this?

And what do you think would happen if we rally above 13.09?