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Topic: It's called a correction (waveaddict's bitcoin charting subscription thread) - page 3. (Read 92097 times)

hero member
Activity: 532
Merit: 500
For any lost TA sheep out there Wink, my subscription service is always available. 

Also, a quick premium update was just released. As always, happy trading all!
hero member
Activity: 532
Merit: 500

Unless you have lots of capital and balls of steel, I strongly recommend against shorting bitcoin.

I would have to agree unless you have very tight stops in place...and even then a stop doesn't protect you if the price gaps up. There is an old adage about never attempting to catch a falling knife (buying during a collapse); the same can be said about trying to stop a rocket (shorting during a bubble). (...)

Does it mean that you always buy/sell at market?

When it comes to limiting risk, I always sell at market if a key technical area (~stop-loss point) is breached which goes against my trade. The risk of the market not pulling back is just too great in most circumstances. Plus, this helps take emotion out of the equation. But, when it comes to buying or selling into or out of a position, I usually stick with limit trades spread throughout a key technical area. Again, this helps take emotional trading out of the equation. Basically, I do everything possible to suppress my emotions Wink
sr. member
Activity: 434
Merit: 250

Unless you have lots of capital and balls of steel, I strongly recommend against shorting bitcoin.

I would have to agree unless you have very tight stops in place...and even then a stop doesn't protect you if the price gaps up. There is an old adage about never attempting to catch a falling knife (buying during a collapse); the same can be said about trying to stop a rocket (shorting during a bubble). (...)

Does it mean that you always buy/sell at market?
hero member
Activity: 532
Merit: 500
I'm curious about your opinion on the following. In catching up with the hundreds of posts in this thread, you make a strong case for why bitcoin is not like gold or silver as a hedge.

Makes perfect sense actually from that perspective.

But you also say that bitcoin tracks the stock market. As people are more willing to invest in anything, they are more willing to invest in bitcoin. Perhaps, you might argue, I don't know, that they need to be even MORE willing to invest in general before investing in bitcoin.

Sort of. I'm basically saying that the wealth effect from an increasing stock market makes people more willing and able to invest in risky ventures/investments. In other words, when you feel wealthy, you are probably more willing to buy something compared to if you are less wealthy.  

What doesn't make sense to me in this argument, however, is the fact that bitcoin has risen exponentially compared to the stock market. One might say, well bitcoin is like a penny stock that way - it was cheaper and so could rise faster.

Yes, I see bitcoin as more of a early startup (possibly a low cap tech stock) which fluctuates with but far more violently than the overall stock market because its fate is ultimately determined by how strong the economy is or is perceived. In other words, it has a high beta.

But is seems that bitcoin - if not like gold and silver - is also not like the stock market. As it is a technology. A worldwide technology.

So far the primary mining and cultivation of btc has been in the US, and now spread a great deal into China. However, one might argue that btc investment is much more a worldwide opportunity than the US stock market. Also bitcoin seems to be a "personal" technology, meaning that unlike a stock, it has the ability to have a loyal following.

If institutional investors were highly leveraged in btc, then I could see an argument for why it might track the stock market. But, for the most part, institutional investors haven't entered in bitcoin markets.

It seems that it is very plausible that bitcoin rising while the stock market rises is simply coincidence. In fact, corrections in the stock market and bitcoin have not tracked. Of course, the correlation between the two is meant to be over the long term. But still, it seems that there is little emperical evidence to suggest that they are tied to each other, as we have not had a stock market crash since bitcoins invention.

In fact, it seems that there are many reasons to suggest that they are not. With the one caveat being, that if the world economy goes into throes, then all markets may suffer for a time.

Until bitcoin actually becomes a stable commodity and/or currency, its success, as of right now, is based on whether or not people will accept/buy it -- a concept which is not so different than what determines how successful a company/stock is. Now, as I stated above, this willingness to accept/buy a new idea/concept is largely determined by how well off investors feel. During bad times, investors go for the safe investment. During good times, investors go for the risky one.

Absolutely though...this correlation to the stock market could be coincidental, especially because of how young bitcoin is. But, until it actually diverges, one has to assume that they will continue trending together.

I hope that I helped clarify some things. If not, I'm always open to further questions and/or a constructive debate.
legendary
Activity: 2156
Merit: 1070
Here's hoping that this high beta speculative test turns us all into millionaires !!!  But it does have enough similarities to gold to be able to use it similarly in theory at least to protect from inflation and such.

In theory...yes. But, as on now, there is just no evidence that it is an inflation hedge.

A big reason why gold and silver have fallen for the past two years is because the US dollar has risen in value. The fact that bitcoin has continued rallying doesn't exactly help its inflation-hedge case.  

Regardless, bitcoin has enormous potential, and I'm in no way bashing it. It could after all change the world and make a lot of people very rich in the process. On the other hand, it is by no means a sure thing. It is probably just as likely or more so that a lot of people will lose a lot of money in bitcoin. Time will tell. I would just stress that no one should ever invest what they cannot afford to lose in bitcoin.  

I'm curious about your opinion on the following. In catching up with the hundreds of posts in this thread, you make a strong case for why bitcoin is not like gold or silver as a hedge.

Makes perfect sense actually from that perspective.

But you also say that bitcoin tracks the stock market. As people are more willing to invest in anything, they are more willing to invest in bitcoin. Perhaps, you might argue, I don't know, that they need to be even MORE willing to invest in general before investing in bitcoin.

What doesn't make sense to me in this argument, however, is the fact that bitcoin has risen exponentially compared to the stock market. One might say, well bitcoin is like a penny stock that way - it was cheaper and so could rise faster.

But is seems that bitcoin - if not like gold and silver - is also not like the stock market. As it is a technology. A worldwide technology.

So far the primary mining and cultivation of btc has been in the US, and now spread a great deal into China. However, one might argue that btc investment is much more a worldwide opportunity than the US stock market. Also bitcoin seems to be a "personal" technology, meaning that unlike a stock, it has the ability to have a loyal following.

If institutional investors were highly leveraged in btc, then I could see an argument for why it might track the stock market. But, for the most part, institutional investors haven't entered in bitcoin markets.

It seems that it is very plausible that bitcoin rising while the stock market rises is simply coincidence. In fact, corrections in the stock market and bitcoin have not tracked. Of course, the correlation between the two is meant to be over the long term. But still, it seems that there is little emperical evidence to suggest that they are tied to each other, as we have not had a stock market crash since bitcoins invention.

In fact, it seems that there are many reasons to suggest that they are not. With the one caveat being, that if the world economy goes into throes, then all markets may suffer for a time.
hero member
Activity: 532
Merit: 500
Thought I'd bump this thread again because of the latest crash.

In short, the recent run up since $266 and crash were nearly textbook technical analysis (TA) if you knew what you were doing. So, profiting from the bubble and getting out before the crash was relatively easy.

If anyone is interested in learning how to chart & trade bitcoin, while obtaining a greater understanding of larger markets, I'm always taking on new subscribers.
legendary
Activity: 1708
Merit: 1010
A big reason why gold and silver have fallen for the past two years is because the US dollar has risen in value. The fact that bitcoin has continued rallying doesn't exactly help its inflation-hedge case. 


The very fact that Bitcoin is, by it's nature, completely detacted from any fiat currency is the long and short of it's inflation-hedge case.  Cans of soup are an inflation hedge.

Bitcoin's strong growth phase must eventually level off, but where that mature level actually might end up is anyone's guess.
hero member
Activity: 532
Merit: 500
Here's hoping that this high beta speculative test turns us all into millionaires !!!  But it does have enough similarities to gold to be able to use it similarly in theory at least to protect from inflation and such.

In theory...yes. But, as on now, there is just no evidence that it is an inflation hedge.

A big reason why gold and silver have fallen for the past two years is because the US dollar has risen in value. The fact that bitcoin has continued rallying doesn't exactly help its inflation-hedge case. 

Regardless, bitcoin has enormous potential, and I'm in no way bashing it. It could after all change the world and make a lot of people very rich in the process. On the other hand, it is by no means a sure thing. It is probably just as likely or more so that a lot of people will lose a lot of money in bitcoin. Time will tell. I would just stress that no one should ever invest what they cannot afford to lose in bitcoin.   
member
Activity: 84
Merit: 10
Here's hoping that this high beta speculative test turns us all into millionaires !!!  But it does have enough similarities to gold to be able to use it similarly in theory at least to protect from inflation and such.
hero member
Activity: 532
Merit: 500
WA what have more upside gold, silver or bitcoin  Cheesy

Bitcoin...clearly (especially if the stock market continues rallying). The only problem is that bitcoin isn't a sure thing like gold and silver which will never go to zero and will almost certainly head higher longer term. Right now bitcoin is purely a speculative beast unlike gold and silver which have weathered the test of time. In other words, I can't guarantee (no one can) that bitcoin will be around in ten or twenty years unlike gold and silver.

Also, I wouldn't really compare bitcoin with gold and silver because bitcoin follows risk trends far more than gold and silver. Although a lot of doomsday-inflation-bugs believe that bitcoin is similar to gold and silver, it isn't. If it was, they would trend together. They may in the future if bitcoin becomes an actual store of value, but right now, it's basically a high beta speculative asset.   
legendary
Activity: 938
Merit: 1000
chaos is fun...…damental :)
WA what have more upside gold, silver or bitcoin  Cheesy
hero member
Activity: 532
Merit: 500

Unless you have lots of capital and balls of steel, I strongly recommend against shorting bitcoin.

I would have to agree unless you have very tight stops in place...and even then a stop doesn't protect you if the price gaps up. There is an old adage about never attempting to catch a falling knife (buying during a collapse); the same can be said about trying to stop a rocket (shorting during a bubble). Although you may ultimately be right, unless you have deep pockets and are willing and able to hold through a vicious bubble continuation, you will be forced to buy/cover at a loss only to see the trend reverse in your favor. There is a reason why a trader's best friend is a trend. A lot of perma-bears got slaughtered during the dotcom bubble in much the same way that perma-bulls got slaughtered during its ultimate collapse...the reason: both groups ultimately rationalized their viewpoints and married their trades instead of trading what was in front of them with proper risk management steps.    
hero member
Activity: 532
Merit: 500


From a fundamental point of view, a taper would push US treasury yields higher along with the US dollar. The combination of higher yields and a stronger dollar should pull the US stock market lower. Because bitcoin generally follows the overall trend of the US stock market, bitcoin should continue lower as well in this scenario. Although a lot of you guys believe that bitcoin is somehow different and excluded from overall risk trends, if the overall speculative environment turns bearish (the US stock market is an excellent barometer for risk-taking), bitcoin is going to suffer because bitcoin is undeniably a risky investment which people flee from during bear markets.


Is this perspective still true if Chinese speculators maintain a higher overall demand than US speculators?  Or would the souring of the US outlook undermine the Chinese speculation as well?

The souring of a US outlook would almost certainly spill over into the Chinese market. The world is just too interconnected now for a US market downturn to not negatively effect the rest of the world because of how important the US economy is to the rest of the world. The crash of 2008 is an obvious example.

The fact that the Shanghai Stock Exchange (SSEC) has been in a vicious bear market since 2007 (unlike the West) actually undermines the idea that the Chinese are willing or able to overtake US demand in something as risky as bitcoin if the US begins selling en-masse. In short, because the Chinese are in a risk-adverse environment because of their bear market, they are far less willing to take part in risky behavior compared to the US which has been in a bull market.
legendary
Activity: 1708
Merit: 1010


From a fundamental point of view, a taper would push US treasury yields higher along with the US dollar. The combination of higher yields and a stronger dollar should pull the US stock market lower. Because bitcoin generally follows the overall trend of the US stock market, bitcoin should continue lower as well in this scenario. Although a lot of you guys believe that bitcoin is somehow different and excluded from overall risk trends, if the overall speculative environment turns bearish (the US stock market is an excellent barometer for risk-taking), bitcoin is going to suffer because bitcoin is undeniably a risky investment which people flee from during bear markets.


Is this perspective still true if Chinese speculators maintain a higher overall demand than US speculators?  Or would the souring of the US outlook undermine the Chinese speculation as well?
hero member
Activity: 532
Merit: 500
Waveaddict, what do you think the implications of a U.S. taper will have on the value of bitcoin?

Asset prices are falling, Gold, Stockmarkets are falling. Bond Yields are rising sharply.

Bullard came out and said there will be a taper. Bernanke quoted indirectly that a taper was coming.

U.S. debt is being reduced to serviceable levels. Government programs are being cut in the U.S. Defence spending down 30%. Food stamps being cut and more.

Looks like we will all be praising the central banks for reducing dollar money supply whilst bitcoin's supply keeps growing as people mine more.

It's all relative, but it looks like a good time to short bitcoin, either through lending schemes or funds like bitcoin investment trust.

Anyone up for some activist investing?

From a fundamental point of view, a taper would push US treasury yields higher along with the US dollar. The combination of higher yields and a stronger dollar should pull the US stock market lower. Because bitcoin generally follows the overall trend of the US stock market, bitcoin should continue lower as well in this scenario. Although a lot of you guys believe that bitcoin is somehow different and excluded from overall risk trends, if the overall speculative environment turns bearish (the US stock market is an excellent barometer for risk-taking), bitcoin is going to suffer because bitcoin is undeniably a risky investment which people flee from during bear markets.

From a technical point of view, I would be doing a disservice to my subscribers if I elaborated.
legendary
Activity: 840
Merit: 1000

You likely saw the gox API glitch caused by a 10k sell. The API repeated the information like a loop for quite sometime making it look like far more was being sold than actually was.

Ouch, that's still quite a lot... Looks like 1/3 of SecondMarket's Bitcoin Investment Trust or another huge fund. That means more selling may come.
There are actually plenty of people with that many coins so no way to be sure. I don't think it would be SecondMarket, at least not their customers/clients as they have a no sell rule until next summer I believe.
full member
Activity: 140
Merit: 100

You likely saw the gox API glitch caused by a 10k sell. The API repeated the information like a loop for quite sometime making it look like far more was being sold than actually was.

Ouch, that's still quite a lot... Looks like 1/3 of SecondMarket's Bitcoin Investment Trust or another huge fund. That means more selling may come.
legendary
Activity: 840
Merit: 1000

Unless you have lots of capital and balls of steel, I strongly recommend against shorting bitcoin.

Even if you don't short, the fact that dollars are worth more after tapering will lead people to not pay as much for a bitcoin. Dollars would purchase more of other assets. It's going to be problem regardless, but I think one of the large hedge funds dumped a lot of BTC yesterday. I saw an order for a 30,000 BTC sell yesterday. Right after the FOMC minutes came out... Co-incidence?

The USD is rising in value against many major western currencies such as the AUD and CAD and GBP...

You likely saw the gox API glitch caused by a 10k sell. The API repeated the information like a loop for quite sometime making it look like far more was being sold than actually was.
full member
Activity: 140
Merit: 100

Unless you have lots of capital and balls of steel, I strongly recommend against shorting bitcoin.

Even if you don't short, the fact that dollars are worth more after tapering will lead people to not pay as much for a bitcoin. Dollars would purchase more of other assets. It's going to be problem regardless, but I think one of the large hedge funds dumped a lot of BTC yesterday. I saw an order for a 30,000 BTC sell yesterday. Right after the FOMC minutes came out... Co-incidence?

The USD is rising in value against many major western currencies such as the AUD and CAD and GBP...
legendary
Activity: 1904
Merit: 1002
Waveaddict, what do you think the implications of a U.S. taper will have on the value of bitcoin?

Asset prices are falling, Gold, Stockmarkets are falling. Bond Yields are rising sharply.

Bullard came out and said there will be a taper. Bernanke quoted indirectly that a taper was coming.

U.S. debt is being reduced to serviceable levels. Government programs are being cut in the U.S. Defence spending down 30%. Food stamps being cut and more.

Looks like we will all be praising the central banks for reducing dollar money supply whilst bitcoin's supply keeps growing as people mine more.

It's all relative, but it looks like a good time to short bitcoin, either through lending schemes or funds like bitcoin investment trust.

Unless you have lots of capital and balls of steel, I strongly recommend against shorting bitcoin.
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