Topic: Rally from $500 happened on very low volume, crash looming? - page 5. (Read 11037 times)

6.3% per day over the last 27 days is rapid, but it is not blowoff.

We actually did hit my blowoff trigger event Monday last week, that is why I sold. The price later corrected down -50% (in all exchanges but different times), but it was not yet the beginning of a prolonged cooling period.

I highly doubt that the next one will be a false alarm. It is possible that we go to $2k or $3k before the crash, but remember that with the current ascent (6.3% over X days and then 60% over the final 3 days), we will hit:

$2,000 in Dec 4th

$3,000 in Dec 11th

$4,000 in Dec 15th.

So:

1. Either we will have to slow down and have a sideways correction (which can possibly result in a crash when people realize that the rise has stopped and they are sitting on huge gains several times the ATH of one month ago, and technical indicators are going sour etcetc. somebody pulls the trigger first: manipulators, China, shorters, whales, traders, panickers, SSS subscribers; but buyers will not pick up because coins at $1,000 are not cheap and even if they were, it takes such a number of dollars to absorb them at these levels that it just does not happen)

2. Or we continue this "stalling" with 6.3% daily ascent until we hit either $2k, $3k or $4k before Christmas, and then crash legendarily to sub-$1,000 when all the forces outlined in (1.) - and then some - conflate.

Humankind's greatest disability is the lack of understanding of exponential function.

I agree that the volume is questionable, mostly in China and Gox.  There are patterns to this but I don't care to elaborate because it seems to irritate people when you talk about the actual nature of coulds and woulds.  This is a great movie!

I have never gotten a single Bitcoin via mining and have absolutely no intention of ever trying.  Well, I did run the default miner for a few minutes just for fun/learning.

I have never purchased a single item using Bitcoin yet; I have given some gifts of Bitcoin away (only one has been bought back).

I was the spark for a local retailer, The Bronx Deli http://bronxdeli.com/, beginning to accept Bitcoin.

I brought in $10,000 (USD) (~1-2% of my total net worth) of non-retirement funds through a few different exchanges (to learn about them), fully prepared to lose it all in a flash (still am).  A couple of days ago, I sold BTC1 just to appease my wife, family and friends; they wanted proof that I could get out.

I'm a small number of days away from getting in $25,000 (UDS) of Roth IRA, i.e. tax-free growth, via SecondMarket & Equity Institutional after which I will draw out some more non-retirement funds to rebalance -- my mid-term target is to get back my original $35,000 (USD) (after taxes, fees, etc.).

The longer Bitcoin goes without a fatal flaw the greater the percentage of my net worth will be in Bitcoin but I won't be abandoning USD anytime soon.

I will not be attempting to time my ins and outs.  Anyone, including the OP, that thinks they can reliably and accurately predict corrections/crashes or anything else is deluding themselves although I sincerely appreciate the postings (they make for entertaining/thought-provoking reading).

Bitstamp might have seen its market share greatly diminished along your time frame. I have imitated your analysis with bitcoinity data for all USD exchanges:

http://data.bitcoinity.org/#ccacdfdgaa

Doubling from $205 to $416 takes 1,67 MBTC, while doubling from $560 to $1130 takes 2,14 MBTC. Please notice both intervals include the same number of crashcorrections (one) and, roughly, of days (14 to 12).

In conclusion, during November, 49% of the trades happened at prices lower than $500.

Thanks for encouraging me to delve into the numbers, I always enjoy some analysis, especially if it makes me a lot more confident on current price levels than I was a few minutes ago. 

Great thread!


I have no problem dealing with the volatility, I'm prepared to lose it all, and investing more than 10% would be crazy anyways.

What I'm more "nervous" about is some technological or political problem coming up, bringing BC down to 0. Restrictions imposed by the government e.g., problems with the blockchain, etc... these are the only things that would not be nice.

There are smooth and spiky tops, in the former the fluctuations cancel each other out in the latter they get in phase with each other.

That pretty much is the only thing missing in your crash picture--rapidly ascending price, we are now stalling and flucutating.

Hmm... this is indeed possible. Again from my own experience, I started to accumulate more of them on top of my previous holdings, when the price had risen significantly early this year, I made for example a BTC2,000 purchase when the price was already at $70. Then I sold very little at >200 and bought very much at <100, and afterwards.

In dollar terms this previously large holder therefore contributed a lot towards the rise.

Now I have decided that I have enough. So I have a diversification schedule that aims to keep BTC at 80% of portfolio. If I have less, I am "short" and positioned to buy back in the event of crash. If I have more, I am waiting for an opportune time to sell some. For me, an opportune time came 2 weeks ago when China was at 45% premium. No matter where the price goes from here, I am fine.

But the thing is that because I am already unloading my bitcoins, does not mean that everybody should be. There are a lot of people who are as rich (or richer) than I am, and not nearly as loaded with bitcoins. For them, this current runup may be a good opportunity to buy more, despite that the price is much higher than it was only 2 months ago.

At any rate, if price goes up quickly, it makes sellers hesitant to sell, buyers even more anxious to buy, the price go up even more quickly, and when it has gone to parabolic (defined by roughly 50-100% increase in 72 hours), it will crash. There is no going around this.

Oh yes, most of them will. After all they are intimately bound to BTC for cashing in and out and some of them are extremely overbought at the moment. If their value suddenly halves because BTC halves I expect pandemonium with sheep rushing to the exit.

You really believe we would hit 1000 back in april, if not for Gox? Market doesn´t work like that.

My gut instinct says the price will crash and more than 50% what it's currently.
The whales in China have to book their profit in trading after-all!

 Some here seem to be reviewing the wrong type of data. Or at the wrong time. Or in the wrong frame of mind.



 Mainstream news isn't going to offer much in the way of serious thoughts when it comes to Bitcoin or the alt. coins.

 Nor is reading anything about the data from TODAY of all days. Or Thursday (Thanksgiving). Or even since the middle of this week when it comes to any American or Western European BTC Exchange Service data.



 Yes fundamentals and technical's really both matter a lot.

 But this is a Breakout period of the birthing of Crypto-Currencies. This truly is the start of a Monetary Revolution.



 Sure there will be many corrections ahead. And many price surges too. And many trading levels as BTC and other Crypto's march forward.


 As for why anyone would pay x for y (alt-coins) that's silly! It's because they believe they have Value.


 I did enjoy reading this thread though. Seems like a bright bunch here. But maybe a bit nervous, and maybe a bit too nervous for what's arrived! (Bitcoin, and all the various alt-coins).


 Best get used to this being the new ultimate high stakes poker game of sorts. (Best get used to the price swings and all), or get into another line of trade. This is going to be harrowing for quite some time to come. As in wild swings followed by calmer periods, then repeat the same thing over and over. Seems no one here ever traded in the Forex? Or at least never at any level above 10/1 which is extremely sage advice except in the best moments where it's obvious what looms right then and there!


 From a fundamental reasoning BTC will keep marching upwards, but with many corrections. (others may like the term crash) but it's not correctly applied here. This is a new ballgame. A whole new ballgame.


 From a technical perspective $900-ish is the 1st major support level. Below that it's a long way back to any strong support at around $400 if memory serves me correctly, I wont bother to look at the charts now for that one. Fact is BTC broke way, way out of it's prior trading range of $80 to $150s. So heading back there isn't impossible. But it may only be for hours instead of days if that should occur. I seriously doubt it will but it's possible, but with quick recovery of sorts, at least partially. The bottom is likely around $900, or $400 now. Instead of the old trading range of $80 to $150s.

 The new trading range is likely >$800 to <$1300 for a while to come, but not a long while. After that it's either up higher to a new record trading range, or instead a backwards for a spell. It all 'depends'...

 Get used to sweating bullets if your not used to playing high stakes capitalist games because that is what this is if you have a lot on the line. Best stay diversified so that nothing tragic could occur if you have most at stake here and not much in the way of reserves. Otherwise what are we really chatting about? Nervousness...




Caveat emptor - let the buyer beware!

What do you base that on? Gox may have been a trigger cause, but the April crash was one of the most predictable crashes in finance history, far more clear-cut than the current situation. It would have crashed regardless. Like Schiff says, it was a bubble in search of a pin.

Your wisdom is much appreciated.

Rpietila, when you compare the current situation to the April crash, I think you miss one detail:

The April crash was largely caused by MtGox going down. Now there isn't a single point of failure like that anymore.

The question you should ask yourself is: Do you expect these 6 M USD to be in the market? At what price point will these miners cash out?

Mining equipment is much too expensive for people to cash out immediately. It does not matter if thousands of Bitcoins are minted every day if the holders think that the price is too low to sell.

And the altcoins are mostly traded in BTC, so I don't think any valuation in dollars really make sense there. Cash flows in and out of Bitcoins almost exclusively.

I agree that the alt coin market will start going bonkers (hell, it already is).  However, I don't think they will be able to crash the BTC market like in April.  I believe a crash like that would stem from a lack of confidence in the technology, which is what happened in April .. So I don't think comparisons to April are terribly relevant.  How many times have people predicted crashes over the past few months based on coincidences with April data points?

As a sidenote .. I think the trollbox @ BTC-E represents the lowest form of humanity.  Noobs should steer clear.

Don't think so, at least not regarding the alts. I'm following a bitcoin thread on an Norwegian forum and we've had a massive increase in newbs asking "where do I buy LTC?", "How do I transfer USd to cryptsy?", "Wich alt is the best to buy?" etc.

Also, check out google trends on altcoin: http://www.google.no/trends/explore?q=altcoin#q=altcoin&cmpt=q

The newbs are coming, and a lot of them are going to leave crying.

I think my math is right but at this valuation aren't there 6 million usd of new coins per day getting mined.  If prices double it will be 12 million usd per day and that's not including alt coins.  I think Litecoin is generating well over a million usd per day as well.  So at $2000/btc, 500 million usd gets created each month?   

How do we know it's an influx of newb money?  I'll pose an alternate scenario.  People who have been into BTC for awhile are converting more of their fiat into BTC.  However, since they've been around awhile, they may be reluctant to continue to dump money in past $1k.  I know I am.  Irrational perhaps, but I do have a problem buying something at such a premium that I bought so much cheaper early this year.  This combined with large blocks of investment capital just parked in cold wallets could produce these patterns of steep inclines as large blocks of money come in, then cool off periods when we cross critical price thresholds.  The Chinese certainly threw a wrench into things, because they tend to be gamblers and were obviously inexperienced in this particular market.  If the old steady hands hadn't been around when the Chinese markets slumped, we probably would have had a full blown April all over again.  Now they've wised up like we did.  I expect that the Chinese will drive the alt coin market into fits of mass panic and hysteria in the upcoming months.  Buy! Sell! Buy! Sell!