Topic: rpietila Wall Observer - the Quality TA Thread ;) - page 355. (Read 907212 times)

It seems to me Bitcoin is at the beginning edge of the chasm per http://en.wikipedia.org/wiki/Crossing_the_Chasm.  The Bitcoin exchange rates will mostly slump until the pragmatists (early majority) climb on board.  If they don't then Bitcoin fails.

Just because I was focussing on wave analysis, and not particularly deep wave analysis.  Frankly I'm skeptical on wave theory, ,and not particularly well versed,, but the ABC interpretation does seem obvious.

Yup. I like the 618 number too.  This chart has been serving me quite well during this phase. https://www.tradingview.com/x/e7RMwYYp/

I suspect the 2.618 line test is almost a "no brainier" at this point. But could easily see 1.618 over the next couple weeks/months.

We often have triangles in bitcoin - why not this time? Why zigzag is the only option you are analyzing?

How deep will C cut?

Classically, significantly below 380.  Realistically? Not flipping likely.  I think you need to do the wave geometry on a logarithmically distorted chart.   The farther out the end of wave B goes, the higher the end of C ends up being.  

Now that 850 has been touched, C can commence at any time, with my full permission.  The B retracement points are 760, 688, 618, 528.  (618 would please my inner numerologist.)  568 is a point in A, so I would give it a non-zero weight.  Extension points at 242 and 188 are utterly ludicrous to me.

Regarding wallet counts, until and unless a significant proportion of addresses are generated by machines for machine use, the rate of wallet creation is roughly proportionate to the number of users.  I.e. the number of users is proportionate to the first derivative of the number of wallets,  including empty ones.

If you zoom out on this chart: www.tradingview.com/e/eBL7nAJN/ it may appear that the current uptrend started at the beginning of October with a selloff, it may even have started at the end of September. SecondMarket fund started in this period.

And as far as I know they generate additional unique wallet for each user.

There are 11,012 users logged onto btce right now.

Some lovely posts aminorex, thanks for sharing.


However, I'd suggest that using wallet numbers (I'm not sure where this data is sourced from...downloads or network activity?) might be rather inaccurate.  As an anecdotal example I'm on my third wallet in two years but none of them have any coins in them - they are all in various exchanges - and I imagine I'm not the only one in this situation.  And you'd need to factor in exchange accounts - I know roughly BTCe had about four thousand users in April and that had more than tripled by December. 

Thank you, aminorex, it was impressive, even though I failed to understand some part of it.

However we should keep in mind that growth factor of the number of wallets does not imply the same factor of "new blood" flowing into bitcoin. I think it mostly reflects activity of current users and services which generate new wallets for some kind of convenience. The "new blood flowing" and "old blood accelerating", I believe, have different impact on bitcoin's value. The only question is what is this difference.

Wow. Gbianchi's analysis is some high level shit. Really impressive.

He basically came up with a mathematical formula to explain why I am so bullish on bitcoin.  I keep screaming that we need to pay attention to fundamentals and this is the kind of fundamental analysis I have been referring to.

Short term charts do not tell us when a current rally or retraction will end or, more importantly, how long it will last.

Great find. Thanks for posting.

Very nice posts aminorex, thanks for sharing your thoughts hope to read more from you.

Presently there is a co-ordinated global devaluation, a conspiracy of central banks to inflate their currencies by stealth to destroy debt, without precipitating a trade war.  Presently Japan has been granted leave to run ahead of the group, since its debt situation is so incredibly awful.  The negative real interest rates and asset inflation are punitive to savers, as bankers attempt to force them into risk assets (at a particularly awful entry point, I might add). 

I think savers have been warned very vividly by Cyprus that the central banks are not their friends.  It would start as a trickle, and in fact already has started, the conversion of savings to bitcoin. In a sovereign currency crisis, e.g. in a hyper-inflation such as would result if excess reserves began to circulate, it would rapidly become a flood.  That is when BTC will whizz past 300k, 1M USD on greased skids.

I'm increasingly finding it difficult to imagine a scenario in which BTC fails to become a global reserve currency, and a primary numeraire for international commerce.  Proposed: Superexponential growth in BTC is due to the compounding effect of the exponential failure of the sovereigns.

We tend not to think much about fundamental value when performing technical analysis.  gbianchi has a nice post at https://bitcointalksearch.org/topic/24-feb-report-bitcoin-price-theory-proposal-394221 in which he finds that the price scales at the 9/4 power of the number of wallets (which I would presume tends to scale with the number of user-years).  Network theory tells us that the value of a network scales with the square of the number of vertices (accounting of 8 of 9 fourths of the exponent).

The number of wallets from Q3 to Q4 went from  ~350k to ~1M, a factor of ~3, while the price scaled by roughly the 8 or 9/4 power of that factor.  This suggests to me that the fundamental value of bitcoin has increased at least as much as the price did from bottom to top, during that time.  Probably bitcoin is now undervalued, and will be even more undervalued at the extreme.  Consequently, I would be surprised if the trip back up from the eventual capitulation bottom is a protracted one.  It should move with great force, and will probably never go below 1000 again unless there is a concerted attack or a technical catastrophe.  The number of users will at least double during this quarter, which should at least quadruple the network-derived value component. 

As luxury retailers market to the bitcoin demographic, use of bitcoin is likely to see aspirational emulation.  International remittances for real estate purchases seem to be present news, but are a very small-scale thing.  Volume remittances on the scale of diaspora populations are very slow in coming.  I have yet to meet a New York taxi driver who knows what is bitcoin.  When at least half of them know, I think we will be approaching the remittance volumes which will impose a monetary valuation (aside from the network valuation) component between 3k and 5k USD. That can happen quickly within a given ethnic enclave, but each enclave is a silo-ed market.

Looking at the Fisher transform on the daily, it looks like a reversal, so I think you nailed it;  C appears immanent.  On stamp, I'm inclined to expect a bounce off something yet to be determined between 840 and 900 (.382 at 852, .5 at 880 are likely), which may take a day or three, thence down to the 500 region, rather directly.

Presently, it's zagging rather than zigging, down towards 800ish, whereupon it will need to reverse up to 850 overnight for my scenario to prove accurate.

check these out
http://en.wikipedia.org/wiki/Sumitomo_copper_affair

http://en.wikipedia.org/wiki/Silver_Thursday

http://en.wikipedia.org/wiki/Gold_fixing

these we know about

i sound paranoid but i think its every market with enough volume/capitalization to give a damn. even commodities that aren't traded on exchanges (like pot and cocaine). its the product of human actors in a speculative market. it happens every single time.

~Green

So far the 2 day downtrend hasn't seriously broken the uptrend from 12/17, so it ought not to be terribly surprising if the latter should continue. 

The volatility of bitcoin is no longer news.

When under 50 people own most of the bitcoins in circulation, then it's not very hard to get organized in a goal to profit at the expense of others.
Though I don't underestimate the chance that maybe even the bigger markets are actually fraudulent and the transaction data they stream, is just simulation for people to give away their money while blaming themselves for doing so. There actually wouldn't be any legal consequences for the people who run those "markets". The bitcoin phenomenon could just be another penny stock scheme with a twist.

I don't know about a highly organised cabal of manipulators all working in unison.

However someone with some serious change and a hardened trading mentality would regard the Bitcoin market as a gift from god. You've got the prospect of long term returns, zero regulation and a big number of holders who panic constantly. A pretty sweet deal for a few people.