Topic: rpietila Wall Observer - the Quality TA Thread ;) - page 116. (Read 907212 times)

Here is the one-week resolution chart from Bitstamp. On it I have drawn two trendlines suggesting a damped oscillation pattern that might breakout mid October. The green candle I was watching a couple of weeks ago, turned out not to be a hammer on any of the high volume exchanges that Bitcoin Wisdom charts.

Your macro views are remarkably similar to my own.  The demographic cycle in particular is very compelling to me.  I see fascism as the dominant economic and political paradigm, rather than socialism.  Bread and circuses for the masses, the dole for the the underclass, subsidies to sop and co-opt fractious demographics, while structural factors are crafted to drain the shrinking productive classes of wealth, and concentrate it with laser focus in the hands of the two major power centers:  The deep state, and the financiers.  Fiat slavery seems the clearest and most explanatory name for the dominant global system, a serfdom crafted to the tolerance parameters of the indoctrinated bourgeoisie.  But the oxygen has been consumed.  Flows upon which the homeostasis depends can no longer be supported.  Leveraged structures must collapse.  Debt must be destroyed.  Rigidities must be pulverized, so that the system can be reshaped into something capable of surviving with the current resource profile (including the ruins of the old among those resources).  Average joe is just cannon fodder on that scale.

The opposing case (bullish risk, now and forever) is that central banks determine asset prices now, not markets, and, as a result of the dominant economic theories of their generation, will not allow what they miscast as "deflation" and its spiral boogeyman.  We are living out the consequences of the lessons learned by misinterpreting the history of the great depression through Keynes-colored glasses.  As long as it is common knowledge that the central planners are omnipotent, the kabuki continues. (Although, the actors beneath their costume robes become increasingly gaunt and weak with each new act.  When the first principal character can no longer mumble his lines, the plot thread will be lost.)

War may crush those old bones very quickly.

That said, I find it difficult to time the macro events.  It is even difficult to recognize them, through the crafted storylines of crony corporate journalism, and increasingly difficult to recognize them through the astroturfed agit prop and mental flak of the infected internet. Difficult, and exhausting.

For estimating asset values on short and medium term scales, what I find most productive, in terms of timing, is gaming scenarios, estimating driver events, and tracking the over-extension of correlation schemas, responding to their breakdown.

In BTC, the eventual listing of COIN is a likely watershed.  It enables but does not enforce a massive burn of fiat, beyond anything previously seen.  Once that channel is open, almost any triggering event has the potential to create a stampede and superbubble.  Until then, it's just drip drip drip mining inflation, overlaid on chaos, overlaid in turn on top of a long-term network growth which looks less exponential each day.

The intraday moves tend to be anti-dollar, pro-commodities, but not so much on a daily scale, where uncorrelated jumps enforce the chaos.   I say uncorrelated only because I don't know with what, if anything, they correlate.

A castle built from Bitcoins rises in Estonia

http://www.arcticstartup.com/2014/09/01/estonian-bitcoin-castle

I protesth too much. Let me dig my hole deeper while defending one possible perspective...

I may be wrong but here is my spin...

http://en.wikipedia.org/wiki/Pets.com

Btw, I knew the dot.com bust was coming because I couldn't buy advertising at profitable rates, and I had a successful product with extremely low overhead of a one-man SOHO company. So I knew the VCs were inflating the ad costs by pumping too much money into promoting dot.bomb startups.

Average joe is tired of losing money on snake oil. Socialism is peaking. People want to be taken care of and insured. Boomers are the largest Western age bracket and they are retiring and need to downsize and be more conservative with their finances. The youth are saddled with student debt and often can't find work in the field of their non-engineering degrees.

http://www.washingtonpost.com/business/where-has-the-retail-investor-gone/2012/08/17/9a915eee-e7cf-11e1-936a-b801f1abab19_story.html

http://www.economist.com/node/21547997

http://finance.yahoo.com/blogs/daily-ticker/facebook-fatal-blow-retail-investors-were-equities-already-150247745.html

http://www.cnbc.com/id/101599140

I expect BTC will rise again and the average joes will come rushing in late as they always do, after leaving dejected when they got fleeced out of their hodlered positions at the coming firm bottom.

Remember my series of posts began on the point of diversifying some portion and especially if you needed cash in the next few months because volatility to the downside might not be finished from the 2013 peak.

P.S. the successful design of an altcoin will take this in account and leverage sunk costs, so the average Joe can participate en masse immediately.

Ah, you're numbers were: "these will someday be passed numbers?" I thought we were talking long term value.

That means great ROI! I am really curious what 2014 has left for bitcoins.

They are not mutually exclusively. Each lower amount is achieved on the way to the higher one.

I just pulled numbers out of my arse, but the essence of my opinion is:

1. $million is a very remote fantasy. (as far as I know, adoption rates are no where near that trajectory)
2. $100,000 is very unlikely but not impossible.
3. $50,000 is somewhat unlikely but less fantastical.
4. $10,000 is somewhat likely, but not assured.
5. $3000 is very likely and nearly assured.
6. $0.10, $1, $100, and $1000 have already been achieved.

Those add up to 111%

I may be entirely wrong, but here is one spin on that...

1. Bitcoin investor demographics are (to some significant extent) former gold bugs. Gold to be sideways or lower lows until 2015.75.

2. Traditional capital is seeking sure thing and safe haven, not risky obscure speculations. Realize most people don't look at BTC the way we do. They see it sort of like snake oil gambling. The media isn't out there blowing Bitcoin's horn right now as it was in 2013. Too coincidental gold crash 2012 - 2013, Bitcoin up like crazy. Seems almost intentional to sucker the gold bugs into another bubble to fleece them.

3. Retail investor is wiped out and conservative since the 2008 crash. They will come rushing back into the stock market near the top. Jealousy. They are actively scared and avoiding speculations. But their jealously will fool them.


In short, the professional speculators shorts are now on board fleecing all the gullible gold bugs who believe Bitcoin is the new savoir after they thought they wised up from their wrong-headed thinking about gold (I was one of them   ). Easy market to manipulate because float is reasonably small, i.e. buying pressure has relented since the media went home.

We get glossy eyed and we bet the farm on grand fables that really don't have that much upside as they did (in January 2013).

I am not long-term bearish, just trying for sobriety and prudence. I don't like being fleeced.

I believe we have before us the opportunity to forge - for fun and for profit - an epic short squeeze.

http://btccharts.everdot.org/.bitcontalk/470_1600.png

* 1600 BTC sold short at $469/$470
* Flash pool at BFX as good as empty (shorts can currently add 2-300 BTC before there will be no more shorting)
* Total amount of shorts is at a record 9,249.08 BTC

It must be remembered that you can easily squeeze shorts but you can not squeeze SELLERS. Still, I do believe we have an opportunity here.

All we need is the right major crisis and the nations will accept the GNU World Order.


We short term traders are not very consistent, now are we? That being said, I honestly do believe this is a long-term bear-market. Look at the daily. Are we above ATH? No, we are not. Do we have higher highs and higher lows? No, we do not. Bear-markets do tend to have counter-rallies before falling down again and there is nothing wrong with riding those waves.

Good point. Note I did say "3 years or more", so the $10,000 is when ever Bitcoin reaches its peak price not necessarily within 3 years (because my somewhat technologically informed expectation is for Bitcoin to not be the final winner in the crypto-currency arena). First some opinion, which is basically worthless. I am thinking more along the lines of sideways to down for some months (say pull the number 3 or 6 out of my arse) then a slower averaged rise (with potentially sharp rises and drops) until the blastoff when the ensuing stampede (retail investor isn't even in the USA stock market yet since they left in 2008/2009) into the dollar and dollar assets has reached its peak around 2015.75. And also to give time for my (non-verified) assumption of the slowing rate of increase (i.e. deceleration) of adoption of Bitcoin (in my log-logistic theory) to catch up with the huge rise in the market cap in 2013. Remember Peter R showed that market cap correlates with the square of some proxy for adoption (as expected by Metcalf's law).

So let's say roughly my expectation is Bitcoin is back over $1000 in (late) 2015, and then up to a 10 bagger over next several years. And I expect the smoothed (taking into account the 2013 rise) rate of appreciation to continue to slow down in my log-logistic adoption theory. So the $10,000 would be reached sort of asymptotically rather than as a stampede peak. I think we are past the early adopter phase of Bitcoin, as it is almost 6 years old.

There could be another big jump in the price upon the next halving of the nominal rate of increase in the coin supply in 2017, although less pronounced than 2013 because the market cap is larger and debasement rate is continuously declining.

I do believe this period is an opportunity for long-term hodlers who don't have their market cap weighted fill to dollar cost average to accumulate more. I was mainly writing that message to those (at least one I know who is not rpietila) who are top-heavy on Bitcoin and who have cash needs within the next 6 months. Essentially I was arguing for diversifying some (20 - 25%?) into altcoins, dollars, and USA stock market, although do note in my opinion (as far as I know since I don't have time to study deeply every altcoin) mostall of those are just investor pump short-term speculative timing rides. The altcoins appear to mostly follow a familiar pattern of pop on some misinformed stampede (greater fool theory of speculation) then they do a death spiral, e.g. Litecoin, Aurora, and Doggiecoin.


The Scrypt ASICs have apparently killed the main reason it was needed as an alternative to Bitcoin for the GPU miners. The value of a coin is proportional to the hashrate applied to mining. Anyone who is making an altcoin and ignores the importance of mining is not going to beat Bitcoin.

We discussed this last month in rpietila's Altcoin thread, and I made the point that when PoW difficulty is not directly influenced by investor driven price, then miners have some say in the price. GPUs were made unprofitable by ASICs, so this is not a Litecoin investor driven change. Also investors now have to value Litecoin under the new regime where there is no strong feature that Bitcoin doesn't have. There is still the arbitrage reason to need Litecoin, but there are also other altcoins although liquidity may be much lower. I do expect Litcoin to bounce back some relative to BTC as the math argues it is oversold and an arbitrage opportunity. Also note that when BTC sells off, LTC sells off more. When BTC rises (except for recent decline due apparently to arrival of ASICs), LTC rises more. So LTC looks to be a good speculation (for diversification from BTC) as we approach a firm bottom in BTC, contrary to popular sentiment.


My former post contained a link to my recent summary of Armstrong's thesis, which says that printing is ending in all the western countries other than Europe and Japan. This was a secret central bank agreement to prop up those dying economies by driving bond investors to Europe and Japan (declining interest rates cause the value of pre-existing bonds to appreciate, whereas rising interest rates in the other western countries drive speculative bond investors out and the long-term bond investors such as pensions are dying).

Armstrong's ECM model had turning point this Sept 3 or 4 2014 which means the stampede into the dollar could accelerate and volatility could be very high in all markets this week! The Euro recently turned down. And now Draghi says Germany is wrong and the ECB must print trillions of Euros.

Have you bought this account recently? 

At the very least, it is beyond ridiculous to:
1) peg the value of BTC to the market price of the lesser LTC
2) assign that value by virtue of nothing other than quantity

I cannot see why ltc would have any long term value.

this is one strange prediction: no growth in price (or negative growth ) until Oct 2015, then 20-fold appreciation (with 80% probability ?) in the following <24mo.
In any case, this would allow me to convert more of my ongoing $$ earnings to btc/xmr stash.

OK...in other news:

* Your Ford Pinto is worth $900
* A Ferrari goes about 3x as fast
* Thus, the value of the Ferrari is 3x the value of a Pinto
* The fair value of a Ferrari is $900 * 3 = $2700

Yea the dollar bullish scenario has been a long time coming but seems to be at bay because of the amount of printing that keeps going on.. so I think it may rise a bit but only before the next crash when rates rise 3x from here.. last time rates went low and rose they rose up about 3 to 4x the lows before the next bubble burst... This time its already so low that rates going to a few percent may be too much.. and thats when the confidence in the system breaks and we enter a new era.. hopefully a crypto currency backed financial system.

I generally  agree with the viewpoint that usually all the permabulls are wiped out before it really rises.. which is why gold/silver are headed down since retailers are still long.. however bitcoin seems a little different because we are in the early adoption phase and if we look back we would be laughing at the fact that we were able to buy bitcoins in double digits.. and it didnt stop the rise from $50 to $1200 when there were plenty of people along for that ride and not just smart money.

Please note I qualified my post saying it was targeted to those who need cash within 6 - 12 months. I wasn't asserting anything about the long-term risk vs. reward analysis.

Near-term risk is limited to the upside, and greater to the downside. Last time we had this discussion @ $600, Bitcoin came down to $350 just as I expected. I could end up wrong this time, but I am having difficulty finding  a catalyst to the upside near-term and the downside risk is potentially revisiting $350 or breaking through to lower lows as silver did.

As Armstrong says, don't fight the market. Let it speak to you. Fundamentals apply long-term, but not short-term. Just the same as for silver, all the perma-bulls have to be wiped out before a bottom is achieved. Don't ever get married to an investment.

So my post should not have made you angry if you read it carefully.


Long-term (up to 3 years or more), I place 1% probability on $1 million, 10% probability on $100,000, 20% probability on $50,000, and 80% probability on $10,000.

So my risk vs. reward calculation for the long-term differs significantly from yours, but it is not bearish and I wouldn't advise long-term hodlers to sell except to diversify into any suitable faster growing alternatives in market cap weighted proportions.

The dollar and the US stocks look more attractive between now and 2015.75 and will maybe be pulling capital out of Bitcoin.

Thats gotta be the weirdest math ive ever seen

I'll play  - $482.09 / 4 = $120.52