Topic: On evolution of prices (Read 592 times)

It feels like a good time to restart this thread and reflect on the recent price action

What became evident during the last couple of months is that top altcoins started to attract more money, thereby putting Bitcoin on a low-calorie diet (if not to stay on starvation). This can be seen by trading volumes, with those of altcoins surging while Bitcoin's going down up to a point where we can see coins like Ethereum and EOS often outperforming Bitcoin in terms of trading volume (at least, that's what I see at Bitfinex)

I had written about that in the past (that we are going to see more action in altcoins in the coming months) but back in the day it was more like an assumption, while today it is a confirmed fact. The implication of all these recent developments is that we are likely going to see more volatility with Bitcoin in the near future. There are at least two reasons for this conclusion that I came up with

First of all, more money flowing into altcoins means less money flowing into Bitcoin (as there's only so much money in the market, give or take), the result being that there is less liquidity in Bitcoin making it more susceptible to severe price swings. Then, there is also a positive feedback loop via which price action in altcoins also causes some price action in Bitcoin. Most of the time it works in the reverse order but now the direction has changed

If you agree (or disagree, for that matter) with this outlook, share your thoughts below

Strictly speaking, we don't know that for certain

As what we saw in 2017 may well have been a one-time event, i.e. a lifetime opportunity to earn via cryptocurrencies (and get done with them). Indeed, the market may recover eventually but it is not very likely that the hype that you mention is going to come back, at least not in the near future (and then it will be a new hype)

Apart from that, it is not completely impossible that won't go lower as the bear trend doesn't look over at all. With that said, I agree that some could return after we get to 10k and beyond but we should first get there which seems like a daunting task on its own

The only pattern that I see that can be repeated is that of the uptrend, distribution, bearish trend and accumulation, where I can say that we are in the accumulation phase, is what I can rescue if we look for some pattern, but in terms of prices it differs totally, the conditions of 2017-2018 are very different from those of now in 2019, there are many more investors, more participation of new people, which, the conditions have changed, maybe 20k is only a roof that can easily be broken when entering in phase of uptrend.

For consecutive years, price pattern is obvious when you base on charts and price history and this made the cryptomarket on trend. It really gives a hint of price in the future, however it's not always happening like what happened on 2018, there's a lot of speculation that bitcoin will hit more than $20000 but it did not. That event gives the people of how cryptomarket can be deceivable.

I don't think that fundamental would sustain price , it can only cause a astronomical move at that time and later price will go back to bases. By the way, fundamental is news if I may be correct.

Maybe the lost in interest is true but it doesn't always become a permanent loss of interest, it is the loss of interest for now.

Basically, someone who got burnt during the 2018 horrible year will probably leave bitcoin for a long time, it will not return to bitcoin to check day to day stuff, will not check prices or news or developments.

Moreover, believe me many of them will return when bitcoin goes above 10 thousand, same happened to a friend of mine for example during the 2014 deal, he was around here almost everyday and decided to quit during the fall to 200 dollars and I understood that, was expectable yet he came back when bitcoin reached back to over 1 thousand dollars (good timing).

Hence, do not expect all the hype that there was and we lost is gone forever, it will probably come back.

The story may somehow always be repeated, but the times when they happen due to the conditions are different, could focus on what a fundamental analysis is concerned.

And the prediction of a technical analyst always makes reference, I think that the price is built in the case of the market with a basic scheme of Accumulation, Trend and Distribution, henceforth both analyzes should be taken into account to have an idea global how can you build the price, since its value can be given by a fundamental analysis.

The first approach is completely unviable in case of cryptocurrencies. 9 out of 10 times I see technical analysis fail in crypto markets. Unpredictability in crypto market is too high due to lack of regulations and less number of market participants. So approach one is wrong.

Coming to second approach, you say less deviation means market is maturing i.e. adoption is increasing. I doubt it too. Market isn't deviating because investors aren't speculating at the moment. If we see real increase in volume, it is somewhat similar to what was in late 2017. Hence there is almost 0% growth in bitcoin trading volume in last 20-25 months. So stagnation in bitcoin price can't be seen as good sign.

I think history is really important and necessary to judge the market in the future. because past data may be repeated again because people are often in the habit of repeating things that make them feel successful.
so record past events to get an effective strategy in the future. That is also the way I come up with strategies to make money.

Really, I am torn between these two. I want to believe that history may repeat itself but from what is happening right now it seems we are directing to other.

With just little upward movement some easily claim that it's the start of bull run even if it's not, hence they're stuck in the belief that what happened before can happen anytime now.

It will be better I guess if we lessen the speculation and just focus in the current state and that will contribute more.

But isn't it exactly what we see with cryptocurrencies right now?

Apart from sudden bursts of activity as witnessed recently, it doesn't feel like there is much interest in crypto presently. Basically, the price is stuck specifically due to loss of interest from bulk investors as there is no demand to drive prices higher but there is no supply either to press them lower. Indeed, speculators are losing interest and this turns into a self-supporting cycle (also known as death spiral in certain circles)

And it also explains these abrupt surges, which can be thought of as an exception confirming a more general rule. Really, if both supply and demand run dry, it doesn't take a lot of financial muscle to move the price in either direction (and still less when we talk about altcoins). And this is what we see as someone (or a group of someones) adds fuel to the cryptofurnace now and then. But this is not real action

Good question. I think that both of these approaches have the right to life, but I cannot unequivocally answer your question because I think that everything depends on the asset. As for cryptocurrency, here I am probably for the first approach, because I see that cryptocurrency can have a good future and the blockchain continues to grow rapidly. those. interest from investors and crypto-intellectuals does not fade away. The second approach usually means that when the asset loses the interest of investors. This is often observed in the stock market when interest is lost to the company's shares. Speculators come out of it and the liquidity of trading falls so much that the price can stand still for years.

It's been a while since the question raised in this topic had been discussed here. Now that we have seen Bitcoin to rise and fall (once again), it seems appropriate to continue this discussion

At first, it looked like we are no longer in the narrow range when we first went over the 4k level. People who were bored to death by stagnant prices for well over a month felt euphoric. It really felt like we were on the way to get resurrected and live again soon. Now we are back to square one

Well, technically, we didn't return to our previous tight range of 3.5k, give or take, but does it make any real difference if we are going to get stuck in the new tight range for the next couple of months? So what is your take on the recent rally? Was it for real or was it only a minor aberration in the current "boring" state of affairs in crypto?

Does it change anything in the "tight range forever" paradigm as described in the OP?

Historical price data is important, but it is not a definitive indicator of what will happen in the future. You have to pair that with the circumstances and the environment in which this occurred at a specific time. Bitcoin price movement has always been tied to specific events, like : Halving / Forks / major hacks etc.

People should analyse and predict price movement based on events, if these events can be pre-determined in advance.  

Isn't it essentially six of one and half a dozen of the other?

Regardless, it seems to me  that you are misusing the term adoption or misunderstanding what it actually means. With adoption, Bitcoin is not bought or sold (as this is what speculation is all about). Adoption is about real use of Bitcoin, for example, as a means of payment (or as a value transfer vehicle in real life) when things are bought and sold for bitcoins. Indeed, you can say that when I'm buying something for it, I'm basically selling my bitcoin (and vice versa), but this is a poor man's excuse if you ask me

right, the total cumulative of the buyer is what makes the price go up. but with the increasing number of bitcoiners, it means opening opportunities to increase market capitalization, especially the big investors who enter

i am not saying people are going to buy more bitcoin i am saying more adoption means more people and more bitcoin is being bought in total.
for example if we have 100 bitcoin and 10 people buying it, price would be at $1 with adoption the number of people grows to 50 so now there are 50 people buying 100 bitcoin and with it price goes up to something like $3 and so on.

that is what adoption means not the same 10 people buy more shares of the same 100 bitcoin. that is called being at a cap and no more growing.

That's the problem with your ways

Basically, you are looking at only one aspect of something without taking into account other aspects, which can be even more important for the issue in question (read, you don't see the whole picture). For example, you seem to agree that old farts will be spending their long-stashed coins but you evidently don't think about what happens to these coins later

Obviously, they don't disappear as someone receives them, right? But this is how new users will be acquiring bitcoins. So they don't necessarily need to buy them. And why would they, really? Do you buy dollars or whatever to spend them? After all, if we talk about real adoption, it has little to do with trading and speculation

about the evolution of prices that change changed now I think a lot and the shortcomings of the price of bitcoin this year are quite severe

you're basically saying you don't expect adoption to occur then, just that old users are spending coins.

if adoption is actually increasing, new users need to get their bitcoins somewhere. a small minority might mine them (by buying hardware and electricity) or accept payment for goods/services. but traditionally for most people, using bitcoins means buying them first.

you don't expect new users?

it can be used in forex, especially in the crypto market today, any analysis cannot predict, since mid-2018 I have somehow made a wrong prediction, now I only expect halving from BTC and LTC, when that time arrives, BTC soar, altcoins will follow, I am very forced to become a bag holder.

to see future prices I think the most valid approach is with a fundamental approach. although this is very complex because it looks from many sides, but I think it is the most accurate way. unfortunately not everyone can be patient, because this is a long-term agenda, so it is very psychological

That's not necessarily so

You are essentially assuming that people will be buying more bitcoins if real adoption should grow. But this is no more than what you come to intuitively think. So why do you think that people will be buying more Bitcoin in that case? I was always thinking that real adoption is about spending bitcoins (from already accumulated stashes), not so much buying more. Buying more is more about speculation than real use. If anything, adoption should first of all make prices less volatile. Whether it will be followed by rise in prices remains to be seen

I used two approaches to analyzing price action because I think it will help me to get better information related to the moving of the price. I can know where the trend wants to go, I can make another analysis with using the past data history, and I can compare with the present situations. Many things that I can get from two methods and so far, I can get something with that method.

The evolution of currency prices, from the beginning until the issuance of virtural (crypto) currencies. Everyone can see, in the movement of representative currencies, more familiar with fiat currency.
Well now, for example, you don't need to come to the bank anymore to exchange digital transactions for each crypto, not the same as gold. Related to the growth of cryptocurrency like Bitcoin,
maybe: If you wake up tomorrow and stop trusting the local currency, the crypto value will evaporate. And this brings us to Bitcoin.

They want quick profit in short, technology and entrepreneurs move too fast that you can see the evolution of price. We can't even determine and speculate the price evolution because we don't know if there are still technologies that will come out to solve problems and help us access it in cheaper/ more expensive price.
But if I were going to choose, I would go to the first camp. Analyzing everything and check it the long term status is always better technically.

these two statements are contradictory.

if we get more adoption then price will rise. to put simply you can't expect more people buying bitcoin (more money coming in) while price stays the same!
"fundamentally" when adoption grows, the price grows with it.

as for the two views i don't think we can stick to only one specially as i said the second one is flawed already. i don't agree with the first one but that is what happens most of the times! it sometimes doesn't matter what I think, but it matters what the majority in the market think.
for example when they thought the 2018 bear market MUST be similar to 2014 then that is exactly what happened! whether i believed in the "past performance is not indicative of future prices" or not.

You can make money in any market, it doesn't matter.  If anyone of you really think bitcoin will never hit 20k levels again you are welcome to short the market anytime you want and even use leverage if you want bigger profits.

Strictly speaking, yes, it is still about statistics (i.e. looking back)

For example, once the trend is established, statistically it is more likely that it will go on than reverse right at the next moment, i.e. the odds of its continuation in the next couple units of base time are higher than its reversal (base time here refers to time used to define a trend). But it is about odds only, i.e. it doesn't in the least mean that the trend will continue indefinitely, of course

What I mean by the second approach here is a generalization of this case (including "no trend" option), which excludes from consideration past history, i.e. history before the trend (or its lack) has been established. In other words, it is explicitly assumed that what happened prior to that moment is irrelevant and doesn't affect future behavior or price action (for example, cycles, patterns or anything to that tune)

I strongly agree with your statement when we want to determine the direction of the market by approaching history / retrospectively by trying to look back by exploring past data. But in my opinion this method is more appropriate for control because in this way we can determine the risk factors and effects that occur so that we can minimize repetitive errors by exploring the causal variables or influencing variables.

How can assure that price will rise? There is no need of historic thing to be repeat again in crypto currencies so need to be investing on only hope is the investors were doing.

I clearly understand the first approach and tend to support it more or less, even though I realize that if something happened in the past, it does not mean that it will happen again. I am not sure I understand what you mean by the second approach, though. It  still looks on the past, but just on not distant past, right? Because to conclude that the price is low for a long time, we need to refer to the past. I think this approach is simply a narrower version of the previous one. It looks at the tip of the iceberg and makes its projections from there while the first one takes all of the existing data into account and makes more educated guesses.

I think you are misunderstanding the whole point

More specifically, it is not a matter of timeframes at all because if it were, it would mean using the first approach. Basically, as soon as you start talking about timeframes, you are implicitly making your choice (in favor of the first approach). And I don't really know how you can possibly consider the price movement from measly 150 dollars up to almost insane 20k as less volatile, ever. But it is the longest timeframe you can take without losing focus. Indeed, you could take the whole Bitcoin history as "timeframe", but that would effectively destroy the idea of a timeframe (apart from making volatility almost infinite in that case)

I think we should review history and should not ignore it. history and things that have happened will give us many new ideas for our strategy in the future.
Great successes have encountered many failures in the future, and those failures have made today's success.
so history is very important and needs to be carefully considered to make a new investment strategy.

Actually, it is not my thought or idea at all

And this phenomenon has even its own name (if anyone remembers it, you are welcome to chime in on this). Simply put, if we know nothing about a certain process, the longer it lasts the more we can be certain that it will go on for at least as long. It has certain application in things like accrual calculations. For example, if a person survives his 20th birthday, there are good chances that he will live up to 50

It doesn't matter that much if we consider historic data or not,one thing is sure price will rise,it will take years i.e natural growth or sudden spike in price it is depend on big players and crypto adoption.based on past manipulation I was able to get a conclusion that price is following a pattern with sharp dump and pump in random years.

the previous development and charts are only be there using of confidence and hope for a person but it will not be like before at anytime the future will be totally different from the previous 10 years I definitely say the Crypto field will improve a lot more than before in some years.

What makes the price in a tight range? The limited number of Bitcoins makes it difficult to predict the stability of prices, especially with the increasing demand for cryptocurrencies.

The increasing numbers of currencies, especially Stablecoins "Shit-coins," makes possible manipulation possible, paving the way for correction once BTC is accepted globally.

So by mid-2020, the probability of volatility seems likely.

i don't get it. what is this progressive approach exactly and how does it lead to that conclusion?


if i have to choose, i'm in the first camp. it's a lot easier to bet on the long term trend than anything else.

for me, the question is very binary because it's a question of technology adoption. society will either adopt it or it'll quietly disappear. if bitcoin starts looking like betamax in a few years, all the speculative money will flow out from the market and the chart will look like tulip mania.

These two approaches are not mutually exclusive. I think, it depends on the time frame you are looking.

For example, in the case of bitcoin, if you go to smaller time frames, something like 15 minutes or similar, you will see that very often the price stabilizes before an abrupt change. The price can be so flat, that it looks as if no change is happening whatsoever. And then a proportionally huge rise (or drop). But on the higher time frames, the price movements are usually less volatile and it appears the second approach is right, that is, the price has stabilized in a tighter range.

Even if you look at the forex market, there is a more or less stable range of prices where the selected pair moves, but it doesn't mean there are no powerful price actions every now and then. I think we will always have a mix of the two approaches.

As technology is the one making each and every move I go with both the approaches. Because, till date from existence bitcoin has made both the approaches realistic. Early adopters who keep hold of bitcoin has profited big, and this assures unlike the price holding long profits big. The second approach meets reality when bitcoin adoption reached a big margin all around the globe the market of bitcoin along with other altcoins grew much higher. So, in the future based on both the approaches can expect good price pumping.

There are basically two approaches in analyzing price action with the purpose of seeing and telling the direction where prices may be going in the future

The first approach, which can be called historical (we can also call it retrospective), is based on the past data as it uses prior history to draw conclusions about future price action. If we use it, we should expect a powerful price action after a long period of stable or stagnant prices simply because it has always been so in the past. In this way, it can be said that we are running on a countdown timer now, i.e. with each passing day we are moving closer to the day when the market will rise and shine (again)

The second approach deliberately discards the past data (like past performance is not indicative of future prices), and on this ground it can be called progressive (or prospective). If we employ it, we may come to a completely different conclusion. Basically, the longer the price stays in its tight range, the higher are the chances that it will continue to stay in that range in the future. Fundamentally, it may mean more adoption and thus less speculative value, which would make this approach quite viable while its conclusions perfectly valid and legit

So which camp do you belong to? If you feel like you don't belong here at all, feel free to post your minority opinion too