Topic: rpietila Wall Observer - the Quality TA Thread ;) - page 228. (Read 907229 times)

Why would you get out of bitcoin BEFORE it's parabolic rise? I must be missing something.

I have about 5-10% of my crypto investment spread across some of the major altcoins -- mostly litecoin, but a few others as well. If you're in the mood to gamble, you might want to convert some bitcoin into some cheap-o alts before the next parabolic rise in bitcoin, then convert back into bitcoin after the parabolic rise. But I consider this to be "speculation" (trying to predict what the market will do based on psychology rather than fundamentals) which is less worthy of respect than investing, which is based on one's understanding of market fundamentals.

As for ether, I'll probably buy a little bit, but I plan to reassess when it comes out. I read something recently by Vitalik about bitcoin sidechains in which he said that Ethereum would probably not work as a sidechain, bc it's too different, but he also indicated that Ethereum could work *with* bitcoin and other alts as opposed to being a competitor that might replace bitcoin. As a long term bitcoin investor, I am encouraged by that.

ORLY?

Hey, I am glad someone else mentioned ethereum, will you or anyone else reading this buy the ether coins when they come out?  1 btc/1000 eth I think.  Would this be a smart investment?

This is a great point. As I was trying to explain information asymmetry to a newbie as a rationale for a heavily bitcoin-weighted investment portfolio (as opposed to a more traditional diversified portfolio), it occurred to me that there are two implications. Assuming that I am a long-term bitcoin bull, a hodl'er, who follows the space very closely and understands the fundamentals very well (all of which I believe to be true):

1) I am in a very GOOD position to profit from long term price RISES due to continued favorable fundamentals. This is because I am competing against the bitcoin non-owners of the world who will eventually appreciate how great bitcoin is, but they will be very slow on the uptake.

2) I am in a BAD position, relatively speaking, to benefit from price FALLS secondary to unfavorable fundamentals. This is because I am competing against the bitcoin owners of the world who will be able to digest bad news extremely quickly.

In my mind, the greatest threat to bitcoin as an investment is if something significantly better comes along. I have been following "bitcoin 2.0" projects (Ethereum, sidechains, etc) very closely and so far, I have not seen anything so far that appears likely to replace bitcoin. Indeed, things like sidechains will only strengthen bitcoin's fundamentals. But suppose something better did come along, and caused the value to bitcoin to plummet. Would I anticipate it faster than the market? Maybe -- after all, I follow this space VERY closely -- but then again maybe not, according to my above reasoning.

Thoughts?

Sensible. I agree.


Mostly sensible. Comments/Questions:
1) I don't see why the intervals would need to be of a fixed size
2) I don't understand why you need to logarithm (I understand why it's used for modelling, that's fine, but for reporting and interpreting results I don't see the reason)
3) Furthermore, I find you choice of base 10 unnatural (base e is the natural choice!;)
4) What's the exact logic of the point system? Why is there a division and a subtraction/addition? What do the numerators and denominators represent? Why do the points seem asymmetric, i.e. lose more points on a bad guess than you gain with a good guess?
5) The intervals need to be in absolute terms, not relative to the price at posting time - otherwise you would also need to keep track of the price at posting time for each prediction (not difficult, just an avoidable pain in the ass)

The table below summarizes the historical 30d changes in USD/BTC. There has been 1341 datapoints.

Change is given in log (log10) base units and also percentages.

The variance in 30 day change is quite extreme, you could have made more than 8 times your money, or lost 60%.

The 10% upper tail is +157% or better, 10% lower tail is -27% or worse.

The long-term amusement that bitcoin rises 60% of the 30d sequences and goes down only 40% still holds 

I read the proposals with enthusiasm and thought, which one would be easier for the forecasters - producing a continuous probability distribution, or producing a discrete distribution like the one below. The ones who can handle continuous distributions, can easily process them to give piecewise results, but not necessarily the other way round.

I would propose that the ones who want to participate, need to produce a table that gives the probabilities (adding to 100.00%) for each log slot. The slots would be with 0.05 intervals like below. Eg. 3.00-3.05 == $1,000-$1,122. Once the correct result is known, we take a geometric mean of the probabilities given to that slot in the predictions. Then you get + or - points depending if your prob was higher or lower than the average. Eg. if your prob was 8% and average was 4%, you get 8/4-1 = 1 point. If your prob was 1% and average was 3%, you get -3/1+1 = -2 points.

(in the table comma = point (US))

No.

$250 is my prediction.

Sarcasm?

I will take the notional other side of this legit TA and say $250 dollars by mid/late May 2014.

Come on, it's a fun thought experiment at least.

There's no such thing as legit TA

This is legit TA. $250,000 by September confirmed.

now it's more interesting to figure out how low it can go

The chances of this happening are small.
Most bitcoin holders would not be able to hold through a 100X or 200X increase happening so fast.
Bitcoin holders would find themselves sitting on trillions of wealth forcing them to diversify away from bitcoin. This would prevent such steep and sustained increase.
The only scenario allowing this kind of price increase in 2014 is a hyper inflationary collapse of the USD along with a global meltdown of the financial and monetary system. Such scenario does not have a zero probability at all, but I would not want it to happen.

A nuclear war between the US/EU and Russia/China could make it happen as well - but it also guarantees a hyper inflationary collapse.

Here is the full fractal (1d bars):



Although I think that the probability of this fractal is quite small (but growing every day), it's interesting to visualize the speed of 2011 superbubble in today's prices:

- over 700 by end of April, clearly breaking de 2014 downtrend (10-15 days from now)
- ATH by mid May 2014 (1 month from now)
- around 10,000 by mid June 2014 (2 months from now)
- around 50,000 by mid July 2014 (3 months from now) 100x in just 3 months from now!!!
- around 120,000 by mid Sept 2014 (5 months from now)
- around 5,000 by Oct 2015 (1 year of heavy correction)

If we are over 700 by end of month...

I have updated the fractal (Mtgox 2010-2011 vs Bitstamp 2013-2014 superbubbles shape comparison chart) on 1d bars.

Strechting timescale to fit 0.50-1.10 vs 259-1163 maximums
and strechting pricescale to fit shapes,

the shape and timeframe of maxs and mins comparison is amazing:

I was being mildly facetious. We will all appreciate a solid formula for evaluating the accuracy of analysis.

Actually in recent days, there has been much more emphasis on charts and such than was the case before.

In my opinion,the main issue to be resolved was - is the bottom of the November 2013 bubble behind us, or is another leg downward ahead of us? The preponderance of technical evidence debated here - is that the bottom was at $339 on April 10 using prices reported by Bitstamp.

But why would you trust a bitcoin analysis that hasn't been analyzed? Etc, until first principles. Greeks dude, the greeks got that far.

I liked when this thread was about Bitcoin analysis, not analyzing how to analyze whose analysis is best.