Topic: Rally from $500 happened on very low volume, crash looming? - page 3. (Read 11045 times)

Do not be too sure. The crash will end up happening when almost everyone is convinced it is bulletproof.

No idea if this is the crash, does not feel like till now. There will be a crash sooner or later, but may be from $2000 to $1000, or right now till $400.

Was that $200 last night a correction or the crash?  I believe that crashes will become less and less intense the more people involved in bitcoin, so I wouldn't expect to see much more than that at this point.

Didn't want to sound too hash, I like your new serious style. Plus, we're going into a correction (how small or big unclear yet), so you're not entirely wrong.

One thing though I forgot in my earlier post.


Right. After posting my critical remarks I realized I didn't address your main point (about the uneven volume distribution across prices). Then I thought of a brilliant answer for that point, but was too tired to post and went to bed instead

So here it goes, with a bit of delay: I don't think that part holds up very well. I'm pretty sure that you just describe what is basically a "natural" distribution (of volume) that thins out as you get to fringes of the price.

In other words: the time interval you picked contained prices from 200 to 1200. The lowest point isn't a fringe point, because you cut off trading history before that price. So we've traded around 200 much longer. Same for everything in between 200 and 1200. The further you go away from the middle though, the lower the volume gets, as is to be expected since 1200 was the ATH at that point.

I guess to really make my point I'd have to do a quick history analysis myself. I'll see if I have time for it tonight. But my basic claim would be: If you take *any* time interval where the beginning point is at a price that has been traded regularly before, and the ending point is near the ATH (up the end of that period), then volume will thin out getting closer to that ATH.

If that's true, then the point would be then that you can't really conclude from volume thinning out as you get near the then-ATH that we've reached the end of a rally... Usually, on the way to the "final" ATH of a rally, several smaller ATHs are broken in the meantime, without a major interruption of the rally (see Januar to April this year for an example)

It is a belief that is growing stronger and stronger among people, and this belief is fundamentally based on very limited supply of bitcoin and almost unlimited supply of fiat money

Once this belief established, it is impossible to break it, it will change people's anticipation and behavior, eventually become a self-realized prophecy: When coin price dropped quickly, there will be many people come in to buy and lift the price back immediately, until they have exhausted all their available risk capital

And then next wave will be taking loan to buy when it drops, that might push the price into bubble area, but as long as the mining cost stays low, fiat money will first flow towards mining equipment makers

I like y'all's style.


Honestly naive sounds better to me. I had just gotten to use Bitstamp instead of gox for the analyses, and now the china thing steals the show. It was not intentional to bias this, and I have not verified the "corrected" figures myself yet either. It is very possible that you are right.


This was not the point. The point was to show that there is markedly less volume in higher prices, compared to lower. It is not the same thing as higher volume over time. The point was to visualize (e.g.) that if only 2% of coins have been traded at over $700, the price level is not yet very established, and will not be supported by buyers if the selling intensifies.

Main thing, as is always the case with fast runups, is the lack of support levels. We have one in $400 and the next one in $190-$266. I don't believe we will ever see the latter, but the former is very much a possibility. All this talk about bitcoin "entering mass adoption" and "everybody talking about it" was there in May. Perhaps we now have 10x more substance, but then again the price is 10x higher.


Every spike in USD volume can be the last. We are multiples higher than in the beginning of the month. I appreciate your willingness to delve into the matter but it does not change my very cautious outlook. As for psychology, when everyone thinks that it is time to buy, the time to buy has just ended.

To repeat: by "very cautious" I mean that 80% in bitcoin is warranted but 90-99% is not in these market conditions. If you have less than 80%, then you are actually more bearish than me by your actions.  

I think it's just that the banks are closed and it's hard for buyers - individual or institutional - to get money to the exchanges to support the sell pressure.

Since the second week of November began, the rise has been approximately linear, not exponential, with drops coming on the weekends.  I suspect that institutional buying is driving the rise, and they don't work on weekends.

LOL only for noobs.....

The next day they will chase the train again.

Fasten your seatbelts.

In old English, "you" was supposed to be plural only and there was another word for singular "you"; seems the cycle is repeating...

Some places, y'all is singular. 'Round these parts, it takes all y'all to be plural.

Wow! That is indeed very different. Thank you.

It appears that sudden volume spikes are associated with big changes in the price, but obviously that is only observable ex post facto and therefore it isn't useful information.

Rpietila, your analysis is bad and you should feel bad.

You're either trying to prove a point and cherry pick your data accordingly, or you're honestly too naive to see that in late 2013 you simply cannot take data from one exchange alone and then draw grand conclusions from it.

Here are two charts, daily btc volume over time and daily USD volume over time, summed up over mtgox, bitstamp and btcchina (where the CNY exchange rate for btcchina was fixed at 1/6.1).

I'm too lazy to draw in a nice moving average, but I trust you can see the rough trend yourself: there were indeed two spikes in btc volume compared to which we are somewhat lower now, but not drastically so, and certainly we're not lower in btc volume than in the beginning of the month. In simpler terms: btc volume is stable or slightly going up.

And USD volume paints a stronger version of the same picture, as is to be expected with the hugely increased per coin value: two spikes earlier this month, and we're slightly below them now, but overall it's going up.

That's all there is to say. Looking at those charts and concluding that we are rallying up on "decreasing volume" is wishful thinking at best, or wilful deception at worst.

If you really want to differentiate, you can use "you" for singular, "y'all" for plural, and "one" for general. Examples:

If you sell now, you are a dipshit.

If y'all sell now, all y'alls are dipshits.

If one were to sell now, one would most certainly be a dipshit.

 

Reality check:  The only thing that gives BTC value is faith.  Faith is mass psychology.  The value of BTC is pure mass psychology, as are damn near all other investments.  I don't care if it's dollars in your pocket, shares of Apple or a bar of gold.  It's all psychology.  About the only thing people can agree on is the value of food, basic shelter and love.  The absolute survival necessities.  Beyond that, it's all a matter of anticipating how other people will value that "thing".  The gold bullion you have has value because other people agree with you.  Will they feel the same way tomorrow?  Shrug.  The only thing this TA does, in my opinion, is capture trends in human psychology (the other traders out there following your TA philosophy, other philosophies, their gut, or some algorithm a guy programmed).

The constant of Greed pretty much promises the continuation of bubbles/crashes. magnitude and frequency do seem to be on the fall and rise respectively though. As price rises, less and less of a blip on the line needs to be made to realize a profit.  More and more hands stirring the pot, not necessarily in unison, creates more and more vortexes, but less slop over the side  

It's all part of one big bubble 

Didn't whats-his-face (oracle picture) write something up a few months back about how Bitcoin is prone to exponential (unsustainable) growths and "crashes"?  Can't find it now..

His thoughts were that this pattern of bubbles would continue, though naturally decreasing in volatility in time.  From a psychological perspective, it's still interesting though.  Are bubbles less likely in Bitcoin considering everyone is so constantly aware and thinking about them? 

How do you calculate the 6.3% for November?  (I've never been good at interest calculations.  I'm getting over 15% per day.  Is this a simple vs. compound thing?)

    This seems to be more and more the case. That, and significant new money, topped off by a more diluted pool of whales selling, US senate hearings, etc. Pretty much all of bitcoin speculation is opinion. More exposure, more exchanges, more money. It won't eliminate spikes and drops (my Opinion   ) but those are the factors that I see as closing the gaps between Events, and somewhat moderating them too.  I think (there's that Opinion again) that having this last spurt of growth makes the whole more viable, and more likely to realize its potential than ever before. On that I base my opinion that $500 is unlikely, and if it came, it would be short lived.