Topic: Price has inertia, bitcoin price has upward inertia (Read 1279 times)

Yes, in a developed and efficient market, price manipulation would not be possible. If somebody does try to manipulate markets, he would get caught and be prosecuted. Unfortunately, that doesn't happen in crypto-markets.

even if this is true, it will not be possible to keep it up down forever.

I think theory of bitcoins movement is not fully correct. Can you explain why prices came down from around 1000 to 200 range? You said that it will go up more and come down less.

First MT GOX, then SILK ROAD, then BITLICENSE, now the BLOCK SIZE? Man fucking saboteours are fucking up the bitcoin price deliberately!

Random walk theory indicated that most daily buyer and seller actions cancel each other on the market, so long term wise the price would be stable without major change in market condition, e.g. price have inertia

Another explanation: Most of the people have no idea if an exchange rate is right or wrong: Why should gold cost 35.5K dollar per 1000g? No one knows, it is just a price they get from the exchanges, and they suppose this is the right price decided by market supply and demand

However, once they have this price information, when price rise fast, they will see it is more expensive now, they profited quickly, they will sell some. And when price dropped, they will think it is cheaper now, and buy some. Those actions will keep the price balance at a stable level


Bitcoins exchange rate can rise dramatically during a major rally. However, when the rally is over, it will usually stay at a much higher level, even without all the capital inflow support from the rally

This is because: When exchange rate is rising, mining margin is getting bigger, miners will add more hash power, that will raise the difficulty, and raise the cost of the coin, and the price become more reasonable

However, when rally is done, exchange rate is falling, there won't be same amount of mining power going offline, simply because they have already ROIed, or not everyone will sell their coin immediately for profit/loss. As a result, the network difficulty and the cost of mining now stays at a much higher level than before, which created a "it cost much more to mine now" feeling for every one, so people are less willing to sell

I found out that most of the people's market decision is based on their psychology, and cost is no doubt the most strong psychology support for valuation. This is not saying that the difficult and cost would never go down, it is just they don't go down as fast as they go up

What you said is exactly what I meant, when the price shoot up, the demand-supply balance is broken, demand gets lower while supply gets higher, thus will drag the price down back to the starting point, not exactly back to origin, but still can keep a stable level

You have a very good point: It is the price that affect supply and demand, not the other way around. So by manipulating the price you would be able to change supply and demand

The question is... can you make this to use to predict the price movements of bitcoin? I think that's the holy grail of every observation of the price development. So when you can put this to good use and your theory is right then you could get rich.

Maybe i misunderstood what you mean too only too.

War has never benefited anybody except the ammunition industry, lives are lost and history teaches us that there is nothing peaceful after a war. The country with the best resources and trustful allies wins wars and that is the very reason United States is considered the most superior country, the very reason why the amount of their debt doesn't matter know. damn diplomatic.

You grasp good points but forget to point out the some of the major reason in the prices of the entire thing.
Gold price seen to fall down when one country attack other one (in war), and so keep on high level until the war settle. This year gold hit its peak after so long time...
This is one of the major reasons in fall of gold price...

Your premise is certainly valid, but the question I have is the volume of bitcoin being sold by miners (after having been mined) great enough to influence the price? My hunch is no, but I don't have the data to back that up. Do you know the volume of bitcoin miners are mining and then selling to influence the price?

Remember, the mining of bitcoins doesn't influence the price, only the purchase or sale can influence the price.

Demand and supply are not data points. They are curves, which are functions of price. So when suddenly people start buying more, the demand curve shifts Sure, people start selling more - This is because supply is a function of the price. This does not keep the price balanced at stable level, it shifts the equilibrium point  of the demand-supply curve.

I think theory of bitcoins movement is not fully correct. Can you explain why prices came down from around 1000 to 200 range? You said that it will go up more and come down less.

I think theory of bitcoins movement is not fully correct. Can you explain why prices came down from around 1000 to 200 range? You said that it will go up more and come down less.

What are you talking about - less bitcoin mined = price increase, not otherwise!

There is less and less Bitcoin being mined and more and more holders of the coin are moving the markets, day traders and long time hoarders so now it is less likely to have a massive uptrend for a while until we get more newbies involved.

This is because: When exchange rate is rising, mining margin is getting bigger, miners will add more hash power, that will raise the difficulty, and raise the cost of the coin, and the price become more reasonable

However, when rally is done, exchange rate is falling, there won't be same amount of mining power going offline, simply because they have already ROIed, or not everyone will sell their coin immediately for profit/loss. As a result, the network difficulty and the cost of mining now stays at a much higher level than before, which created a "it cost much more to mine now" feeling for every one, so people are less willing to sell

Another explanation: Most of the people have no idea if an exchange rate is right or wrong: Why should gold cost 35.5K dollar per 1000g? No one knows, it is just a price they get from the exchanges, and they suppose this is the right price decided by market supply and demand

However, once they have this price information, when price rise fast, they will see it is more expensive now, they profited quickly, they will sell some. And when price dropped, they will think it is cheaper now, and buy some. Those actions will keep the price balance at a stable level