Topic: rpietila Wall Observer - the Quality TA Thread ;) - page 341. (Read 907227 times)

This is a great link and I'm glad there is finally some real research to back it up

lol i'd sure hope to buy a lot more than a single TV with 1BTC.. try the whole stadium ^^

Why my threads are actively moderated and I delete posts "at random".

I agree David, that the USD side of the equation in not considered often enough. All fiat will loose value over a long
period of time(hence my username  lol). This alone will cause BTC in USD dollars to rise longterm. At the bare minimum,
if you can buy a Superbowl quality TV now for one bitcoin, then you will be able to do so in the future. The USD cost
of the TV will be much higher and I think it's pretty safe to assume the value of bitcoin will outpace it, causing the amount
of bitcoin needed for a TV is drop below 1.

The exchange rates reflect liquidity and confidence, and supply and demand; supply and demand reflect want or need but mostly emotion.

Liquidity and confidence (or rather the lack thereof) causes Mt. Gox to be 20% higher than other major exchanges (at least for $US/BTC).

Mostly folks enter sells and buys because they just want to; very few transactions are need driven; anyone playing with their grocery money deserve what they get.

Emotions are driven by a wide variety of stimuli.  News, for example, is a big source.  Word of mouth causes many to act.  One very big source of emotion is the exchange rate itself; folks compare the exchange rate vs. the recent history and become agitated.  Rapid declines evoke terror.  Rapid increases overly excited.

Technical analysis attempts to detect emotions in the historic chart of the exchange rate and then predict future emotions; good luck.  It works until it doesn't.

Bitcoin will benefit from a lower level of erratic emotion regarding the exchange rate.  As infectious enthusiasm for the capabilities spread and they are adopted then the fundamental value of Bitcoin will rise.  Building real world infrastructure to further enable the use of Bitcoin will also increase the fundamental value of Bitcoin.  Shifts in the fundamental value will lead to news, etc., and eventually to movement in the exchange rate.

The other side of the exchange rate is also very important.  Supply and demand for $US, for example, reflect into the $US/BTC exchange rate.  The endless news of quantitative easing (debasing) pushes the demand for $US down.  Etc.

As someone living in the northern parts of Sweden I say: smart women.
Lots of good stuff here, but the winter weather isn't one of them.

RP, you're finnish? Love how musical that language is. Was actually considering moving to Scandanavia at one point but every woman I hooked-up with hated cold weather.  lol

I calculated that $1 investment raises the market cap by $4. So therefore the sum invested over Bitcoin's existence should be about $2.8 billion.


By "stocks" you have to mean "exchanges". For sure the $2.8 billion is not there currently. We are talking some (low) hundreds of millions. By pressing "sell" for 200,000 bitcoins, you can crash all the markets 90% or more.

But that is not so meaningful. Exchange system is very untrustworthy and unfunctional, and therefore the money interested in buying bitcoins is not deposited there. There is much hidden demand, which means that no matter how many bitcoins are sold, there will be a buyer. For significantly lower price than now of course, but still a very robust price compared to just a year ago. Maybe $200 or so.

This is my favorite one:

Why would you think that one would want to liquidate all at once? Just wondering.
It wouldn't be wise, comparing to dump in a slow manner (or portions).

It's little bit contradicts with my previous post, but previous is more of a theory.

That not helps, cause it's not accounting for orders not in the book, and real "walls" might be way, way bigger (I assume biggest players using trading bots).

btw it's also would be nice to understand what amount of btc each stock is holding (assuming some of them do provide shorting btc with leverage).

Just look at the order book of any exchange. 

I really wonder how all that transaction mechanics works on the stocks for BTC, in terms of real money availability on stocks' balance.

According to this site current "bictoin capitalization" is around 11,2 billion $
http://www.coinometrics.com/bitcoin/bmix
and current amount of btc existing is 12,2 millions

But we understand, that "capitalization" is oversimplified model, basically calculated as
[current value per bitcoin ($/btc) multiplied by the number of bitcoins in circulation]

It's nice to think in terms of "that huge amount of money" but it's just the stock, and price is fully depends on the supply/demand, as example

On 5th of december, selling ~200 000 bitcoins (2% of total)  on btc-e caused price drop from 1068 to 556  in 3 days (by 50%).
We might add there other stocks, as ~175k  for bitstamp and ~200k on gox, it's still aboout 5,5% of all volume.

That's how fast wealth disappearing.



Now, the most interesting question for me - is how much money was invested into btc by now? It's certainly not 11,2 billions, nor it's 5 billions. Sum must be way, way less.

Most of these sums must be stored on main stocks (btistamp, gox, btc-e, okcoin/huobi?), who performed transaction operations. //assuming, that people not cashed out to fiat//

And in the end, that sum will determine how much btc you can sell, without going price to zero. Because if one (or several guys) wants to liquidate his BTC holdings, if sum will be big enough, there just wouldn't be enough demand ($) in stock balance to buy even at low levels (and deposit takes several hours), and that will crash price to zero.

Having approximate amount of all cash invested to btc, which are in stocks now, might allow us to predict how much % btc will be required to completely crash the market.

Sure we can't predict how much support (buying power) will be waiting on $100 mark, but in the end, it's all about current cash  on stock balance - if potential buyer don't have much cash his order will be filled up and price will drops further.

If we have some figures about stock balance funds, we can create approximation scenarios (like 1kk btc to be bought at $100 before cash ends and drops further, etc).

Is there any way to obtain something like that?
I mean all stocks are legal organisations and must provide some finance reports to the govt (and at least partly these reports are open to public).

P.S. in before "who the hell will liquidate all his holdings at one day" stuff - scenario might happen if several major holders (up to I dunno, 1kk BTC?) will liquidate their positions at once for whatever reasons.

Blit's actions in summer pissed me more than anything I've been reading on this forum as I strongly believe the man who was talking shit about Bitcoin should never be a moderator on Bitcoin forum though he is doing his job pretty well beside that.

Now he says he was trolling but whatever, moderator here should not act like that.

i was annoyed more than once to be honest, guess you got me
You do speak the truth about risk management, and we are still due to break below the trendline according to Risto's regression

I have a question: how do you tell if a data set is exponential or something higher such as e^x^y

Maybe, otherwise trolling is always good excuse to use if you are wrong on something.

Now I look as idiot after you deleted your previous post 

No, you were not warning of possibility, you were warning of certainty.

You're uber bull now with all your bearishness compared to bullshit you were talking in June/July.

I agree about being careful and protecting new wealth that is created but that's about all I agree with you after all crap you posted here last summer.

I'm sorry if people took me seriously, it was fun for me, and I like triple digit Bitcoins. It was my way of managing expectations, and I wanted to point to the possibility of this. If you care to know, I've never shorted it and I still don't. Maybe I will reconsider that stance in quintuple digits.

The question nowadays is keeping the fortune, that is where the skill is involved. No risk management and soon it can be poof. I realize that many people here believe there is absolutely no risk to Bitcoin long-term though.

edit: Yes, I was a pure troll at that time, was having too much fun there agitating people. Same way I trolled the bears in Winter 2011 who were shorting on leverage via Bitcoinica. Maybe I need a disclaimer in my signature that I am not to be taken seriously sometimes?

coming from the guy who spent all day everyday 'warning' everyone here "no more triple digits in 2013" as Speculation's moderator.
so at least I know where your neutrality stands.
I would only agree that today you are more pragmatic.

and honestly the least anyone here on this website who first owned Bitcoins in 2011 could do is make a fortune, relativity aside.

Yes, exactly. Even if you initially intend to hold "long-term", if you don't have some form of risk management, there is too great a chance your mind will slide from Bitcoin illusioned to Bitcoin desillusioned purely because of a bear market – after all, it was merely a bull market that led you to the other opinion in the first place! – which creates a risk that even if you end up being correct in a few years, you will have sold out near the bottom and forsaken Bitcoin.

The importance of managing your expectations in order to have the ability to execute your plans is incredibly important IMO.

By the way, the flattest long-term support trendline that is being drawn nowadays, even though it is much less steep than the one drawn in 2011, still has the price doubling every couple of months. It would not be too difficult to go below it given enough time.


Sure, if the money is nothing to you to begin with or it is easily regained from income, then there is less worry in the first place and you won't have to care.

Thanks Blitz.  This is the point I was trying to make regarding divesting until you can sleep soundly at night.  

Although I believe that bitcoin will be successful, how will I feel if it isn't?

If I don't divest enough now, it will be more painful if it all falls apart.  If I divest too much now, then it will be painful when it gloriously succeeds!  What to do, what to do....

I recommend Risto's SSS plan with a 10% - 15% divestment per "doubling."

Meanwhile, I'm staring at my cavirtex account pondering whether I've diversified enough.  Funnily enough, last night I was pondering whether I had diversified too much.  


EDIT: I should add that if you are young and have like $5,000 or $10,000 in bitcoins--just ride this f*&cker.  Worry about portfolio diversification in your thirties or after you're up $50k - $100k.