@Spekulatius
I'm not sure I buy your 4 step strategy
1. Announce closure -> price drop
2. "default" -> price rise (Pirate sells BTC on the way up)
I'm guessing that your logic is that the price drop (1) was because the market assumed:
a. BST was genuine
b. BST remained solvent despite being shut down, and the funds would be returned
c. That a large proportion of the invested funds would be sold for fiat, rather than held or invested in BTC
Now, I'm not sure it's clear that the market as a whole held any of these views predominently, but I'm assuming your argument is that they did, and that as people began to doubt (b) and hence start to doubt (c) this should spark a rally (2)
Is that about it?
Correct. Add to that some new unexperienced traders since the last bubble and a grain of herd mentality and we are good.
I would expect the crash to be due, in part, to the reduction of the inflows of cash buying BTC to invest in BST and PPTs
and indeed HYIPs in general.
I think you are wrong here, at least short term. See this graph, the MtGox order book is packed to the rafters, as much as never since July 2011:
I would expect that far from triggering a rally, any default by BST would increase concerns about the safety of BTC invested in HYIPs, further reducing these cash inflows and reducing the chances they will recover. Granted, this might cause outflows from some of the other HYIPs, but that won't last long as the other Ponzis will in turn fall like a pack of cards.
Like I said, false in short term. Maybe true in long term.
I would still argue that a new rally is due to about 12$ or wherever Pirate lets us ascent to.
I am bullish because:-
the more time passes without a payback, the more the recent drop seems unjustified- the more time passes, the more confidence grows in the underlying uptrend with all the good news happening (BitInstant Debit Card, Satoshi Client probably becoming light wight soon, "BIG" announcement in September,..)
- the 7% dividends payed weekly from BS&T actually dont increase supply anymore (because there are gone)
- if price remains at current levels or rises, traders laying in wait for a price drop grow increasingly impatient and will eventually buy
- Bitcoin conference coming up (always bolsters traders confidence and fantasy)
This will only hold true if:- Dividends will further be withheld
- Pirate remains patient
- No major news comes in that is suitable to cause a crash (like MtGox gets seriously hacked or something of that magnitude)
If Pirate for whatever reason does not want to wait for an uptrend to happen, maybe because he wants to meet that end of week deadline at all costs, he will probably induce a crash by selling at market prices. This way a crash is certain if he can sell alot and keep frightening walls up. This should be his last resort however, because reasons described in my above post:
If it was a bear raid, wouldn't he sell at market prices?
Selling at market prices without any lenders payed back (therefore no change of fundamentals) bares the risk of a quick momentum change to his disadvantage especially with vigilant traders we have right now, that are alerted by the last days crash only waiting to buy cheap coins. Only selling at market prices would be too obvious.
I can understand his fear that he could end up not buying sufficient amounts of BTC before the momentum turns around against him. A safer bet seems to be to sell BTC he already has on the rally resulting from more and more rumors of his default. Yesterday and today we saw the price on hold. From a TA point of view, we were due for a correcting rally. That rally hasnt happened yet, because of uncertainty, whether or whether not Pirate will pay back maybe with little delay or not at all. The more time passes by without him paying the more confidence grows that there will be no payback, hence no downward pressure.
