@ SlipperySlope:
Can I ask you a question? Not rhetorical, but I'm actually interested in your answer.
I enjoyed reading your thread, and think your arguments were pretty solid (and I was inclined to agree with them in the beginning, on the first days after the correction from 260+).
But at least to me it seems that, with each day, there are more signs that the scenario you described does in fact not play out: a quick, sharp correction occured, shortly followed by another sharp drop (to 50), which was however rejected by the market to be lasting. 100 has been tested several times now, but didn't even fall when mtgox suffered from DDoS. There seems to be strong resistance at the moment to go anywhere near 150, but equall strong resistance to go anywhere below 100. Trading volume has been pretty low in the last days, so at the very least there is less panic driven behavior now.
So I'm wondering, under which circumstances would you revise your initial assumptions? I mean, like any good attempt to objectively describe (and predict) reality, you need a way to adjust your theory if confronted with contrary evidence, and I'd like to understand what you would consider to be (sufficiently) evidence to the contrary?
Topic: SlipperySlope's Bubble Collapse Journal - page 13. (Read 24785 times)
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I place less and less importance on Google Trends these days, vis-a-vis bitcoin. A couple of years ago: yes, it was important.
Despite its failings, Google Trends and the other bitcoin web site indicators, might be the still the best way to gauge new investor interest in bitcoin. I simply look for sentiment confirmation that this bubble has peaked.
I have been looking for confirming signs that this second bitcoin bubble has peaked and is declining.
- Google Trends for 'bitcoin' now shows decline from a peak, when viewed over a 12 month or shorter time frame. This important, because an on-boarding step for new bitcoin investors is to search for information about bitcoins.
A small quibble - but I believe it's time.
I place less and less importance on Google Trends these days, vis-a-vis bitcoin. A couple of years ago: yes, it was important. Today? Not so much.
Remember that unfortunate noob a few days ago who posted Trend comparisons on bitcoin + US Dollar; his point being that interest in bitcoin was obviously greater than interest in the dollar? It was pointed out that not too many people Google the US Dollar, because pretty much everybody knows what it is.
I think that is also beginning to be true of bitcoin. Now certainly bitcoin is nowhere as near as well-known as the dollar - but among those who might take an interest, it's getting there.
Just a thought.
Did you sell at $75? Price is over $100 on bitfloor now 
It is $94 on MtGox however, this could be Bull Trap #163.
11 days after the April 10 peak
1. Does the recent dramatic recovery from 50 to 136 USD/BTC negate the case for a short term bear market?
Note that 136 is very close to halving the 266 peak. I suggest, based on price action, that the mid 130's is a significant resistance point. Perhaps, if the comparisons with bubble 1 are still valid, price peaks will be generally lower in the weeks and months to come. In the aftermath of bubble 1, prices declined on average 1% daily.
I have been looking for confirming signs that this second bitcoin bubble has peaked and is declining.
Is anyone tracking the the number of Bitcoinity chart number of connected users? As of this writing it is 9021. One might reasonably expect this number to decline as less committed investors drop out.
2. What effect do Mt. Gox problems have on the bubble decline?
Back in June 2011, Mt. Gox was very seriously hacked and closed for several tense days. When the exchange reopened for business, prices sunk that day only to recover, and to gently continue the subsequent three-month long decline to the bottom. Compared to the first bubble, current Mt. Gox problems are much less serious. But as of this writing, Mt. Gox has been offline for hours with yet another DDoS attack.
1. Does the recent dramatic recovery from 50 to 136 USD/BTC negate the case for a short term bear market?
Note that 136 is very close to halving the 266 peak. I suggest, based on price action, that the mid 130's is a significant resistance point. Perhaps, if the comparisons with bubble 1 are still valid, price peaks will be generally lower in the weeks and months to come. In the aftermath of bubble 1, prices declined on average 1% daily.
I have been looking for confirming signs that this second bitcoin bubble has peaked and is declining.
- Google Trends for 'bitcoin' now shows decline from a peak, when viewed over a 12 month or shorter time frame. This important, because an on-boarding step for new bitcoin investors is to search for information about bitcoins.
- Alexa web site traffic statistics for bitcoin.org show a decline from the April peak
- Wikipedia article traffic statistics for Bitcoin show a decline from the April peak here
- Blockchain.info chart for 'My Wallet Number of Transactions per day' appears to have peaked, when viewed on a log scale with 7 day smoothing. This data relates to the underlying bitcoin economy, including gaming.
- Blockchain.info chart for 'Trade Volume vs Transaction Volume Ratio' smoothed values peaked at 12 in early January, and bottomed out April 15 at 1.4. I was puzzled by this particular chart at first, but a post today explains that the ratio is actually transaction volume / trade volume, i.e. as the bubble formed, the relative increase in trade volume caused the ration to diminish, and as the bubble collapses the ratio will likely return to pre-bubble levels.
Is anyone tracking the the number of Bitcoinity chart number of connected users? As of this writing it is 9021. One might reasonably expect this number to decline as less committed investors drop out.
2. What effect do Mt. Gox problems have on the bubble decline?
Back in June 2011, Mt. Gox was very seriously hacked and closed for several tense days. When the exchange reopened for business, prices sunk that day only to recover, and to gently continue the subsequent three-month long decline to the bottom. Compared to the first bubble, current Mt. Gox problems are much less serious. But as of this writing, Mt. Gox has been offline for hours with yet another DDoS attack.
Quoted in anticipation for moderator action. Not all people can immediately see the troll here, which would lead them to believe that I actually said something like that. Can somebody please tell whether it is OK to alter the text in quotes in the way described?
Hey, loosen up slaphead!
This is a Bitcoin forum, not yer local Masonic Lodge.
btw, I am at least 10 years older than you are and i still have all my hair. don't wear no dorky school tie and blazer either.
(now I am trolling).
LOL
Quoted in anticipation for moderator action. Not all people can immediately see the troll here, which would lead them to believe that I actually said something like that. Can somebody please tell whether it is OK to alter the text in quotes in the way described?
Hey, loosen up slaphead!
This is a Bitcoin forum, not yer local Masonic Lodge.
btw, I am at least 10 years older than you are and i still have all my hair. don't wear no dorky school tie and blazer either.
(now I am trolling).
So you're saying it's either a rapid shoot in price back over $250 or a slow drop in price over weeks/months down to new lows. And anything in between is impossible?
So the price stabilizing between $90-$110 for a month or two followed by a gradual increase to $150 by the end of the year is impossible?
So the price stabilizing between $90-$110 for a month or two followed by a gradual increase to $150 by the end of the year is impossible?
Something like that. 100$ -150$ stable over long term is less plausible because it requires something like 300.000 - 400.000$ fresh funds to enter the economy each day as mining revenue, profits + cost. When ASICs become the norm, profits will drop and even miners that are long in bitcoins will put cashflow pressure on the exchanges (miners seeking only USD profits are already doing it). In october - november the whole daily trading volume was around 500.000$, so I really don't see how the market can sink 400.000$ worth of BTC long term without dumb money caused by quick appreciation and media exposure.
Bottom line, nothing fundamental really changed in the last few months. If BTC price was stable around 5-10$ with a 50 BTC block reward, it should be stable at 10-20$ with a 25BTC reward. I'm willing to grant an extra 50-100% for the increased visibility, and I'm being generous. So 20$ to max 40$ could be stable long term, 100$ can't be.
So it's either another bubble or a slow death with a capitulation in the 20s (realistic) to 30s (optimistic).
You forgot to add value to what it might become. A lot of people see a bright future for Bitcoin, even more today than a couple of months ago.
So you're saying it's either a rapid shoot in price back over $250 or a slow drop in price over weeks/months down to new lows. And anything in between is impossible?
So the price stabilizing between $90-$110 for a month or two followed by a gradual increase to $150 by the end of the year is impossible?
So the price stabilizing between $90-$110 for a month or two followed by a gradual increase to $150 by the end of the year is impossible?
Something like that. 100$ -150$ stable over long term is less plausible because it requires something like 300.000 - 400.000$ fresh funds to enter the economy each day as mining revenue, profits + cost. When ASICs become the norm, profits will drop and even miners that are long in bitcoins will put cashflow pressure on the exchanges (miners seeking only USD profits are already doing it). In october - november the whole daily trading volume was around 500.000$, so I really don't see how the market can sink 400.000$ worth of BTC long term without dumb money caused by quick appreciation and media exposure.
Bottom line, nothing fundamental really changed in the last few months. If BTC price was stable around 5-10$ with a 50 BTC block reward, it should be stable at 10-20$ with a 25BTC reward. I'm willing to grant an extra 50-100% for the increased visibility, and I'm being generous. So 20$ to max 40$ could be stable long term, 100$ can't be.
So it's either another bubble or a slow death with a capitulation in the 20s (realistic) to 30s (optimistic).
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This bubble burst in 5 days instead of 5 months. ...
My numbers would be that $100 is the new $5 for the following months.
My numbers would be that $100 is the new $5 for the following months.
Bubble bursting follows a double exponential rate of decay, which is the opposite of what happened in the run up. Post peak, one would expect the price halving time to increase - thus the first halving from 266 down to 133, then the second very quickly down to 66.5. In contrast to your view, I think that the having time to 33.25 will be some weeks away - if the rate of decline slows down as in a typical bubble collapse.
What is your basis for the growth rate of the bitcoin economy? A linear regression of the log closing price on Mt. Gox starting in 2010 to present suggests a bitcoin economy growth rate of 4.8x annually = 580%. That is a fantastic growth rate, but the market gets ahead of that when doubling several times in a few months.
Mt.Gox first day = 0.06, yesterday 73. No linear regression, just (days_open/30)th root (73/0.06) ~1.26, hence 3 months double.
It is more than you think. If we continue this way, $300k is expected in 2016
You're drawing the line in the wrong place like everyone else who makes graphs on this site. End the numbers in late 2012 before the bubble started when it was around 10
And that forgets that bitcoin doesn't just go up magically because you whisper "bitcoin" in someone's ear. It gains investor confidence as more sites and companies start accepting it as a form of payment.
Unless you're serious about your belief that the total bitcoin economy will be worth 3 trillion dollars in just 3 years. In that case there's probably no point discussing it with you.
Everybody is expecting to catch another falling knife, and profit from the differential when it goes back up, that's why all the bids are there. That doesn't mean the fundamental problem with the bubble (irrational overvaluation) has disappeared. If price steadily drops over the next few weeks and the promised influx of buyers fails to materialize, which I think they will, the bid wall will vanish.
If you look at the google trends data, the interest peak becomes more and more clear a thing of the past, so there's nothing to salvage the situation short of a rapid valuation over 250$, so that reporters and news outlets are interested in the story again and dumb money starts flowing again.
If you look at the google trends data, the interest peak becomes more and more clear a thing of the past, so there's nothing to salvage the situation short of a rapid valuation over 250$, so that reporters and news outlets are interested in the story again and dumb money starts flowing again.
So you're saying it's either a rapid shoot in price back over $250 or a slow drop in price over weeks/months down to new lows. And anything in between is impossible?
So the price stabilizing between $90-$110 for a month or two followed by a gradual increase to $150 by the end of the year is impossible?
Everybody is expecting to catch another falling knife, and profit from the differential when it goes back up, that's why all the bids are there. That doesn't mean the fundamental problem with the bubble (irrational overvaluation) has disappeared. If price steadily drops over the next few weeks and the promised influx of buyers fails to materialize, which I think they will, the bid wall will vanish.
If you look at the google trends data, the interest peak becomes more and more clear a thing of the past, so there's nothing to salvage the situation short of a rapid valuation over 250$, so that reporters and news outlets are interested in the story again and dumb money starts flowing again.
If you look at the google trends data, the interest peak becomes more and more clear a thing of the past, so there's nothing to salvage the situation short of a rapid valuation over 250$, so that reporters and news outlets are interested in the story again and dumb money starts flowing again.
Quote
This bubble burst in 5 days instead of 5 months. ...
My numbers would be that $100 is the new $5 for the following months.
My numbers would be that $100 is the new $5 for the following months.
Bubble bursting follows a double exponential rate of decay, which is the opposite of what happened in the run up. Post peak, one would expect the price halving time to increase - thus the first halving from 266 down to 133, then the second very quickly down to 66.5. In contrast to your view, I think that the having time to 33.25 will be some weeks away - if the rate of decline slows down as in a typical bubble collapse.
What is your basis for the growth rate of the bitcoin economy? A linear regression of the log closing price on Mt. Gox starting in 2010 to present suggests a bitcoin economy growth rate of 4.8x annually = 580%. That is a fantastic growth rate, but the market gets ahead of that when doubling several times in a few months.
The bid depth on the Mt. Gox order book hit an all time high today supporting current prices. This was not the case during the 2011 crash (bid depth back then was almost non-existent).
I don't think any mathematical formula would fit it - because bubbles are built on feedback loops. For example this latest crash was the result of people anticipating a long slow slide - they capitulated earlier - but the effect of it can be that this time there would be no long slow slide.
Personally I would rather expect a huge triangle here - there is lots of pressure up, even when the prices are crazy.
Personally I would rather expect a huge triangle here - there is lots of pressure up, even when the prices are crazy.
My prayers would be that $100 is the new $5 for the following months.
I have corrected that for you.
HTH.
Quoted in anticipation for moderator action. Not all people can immediately see the troll here, which would lead them to believe that I actually said something like that. Can somebody please tell whether it is OK to alter the text in quotes in the way described?
My prayers would be that $100 is the new $5 for the following months.
I have corrected that for you.
HTH.
Quote
This bubble burst in 5 days instead of 5 months. ...
My numbers would be that $100 is the new $5 for the following months.
My numbers would be that $100 is the new $5 for the following months.
Bubble bursting follows a double exponential rate of decay, which is the opposite of what happened in the run up. Post peak, one would expect the price halving time to increase - thus the first halving from 266 down to 133, then the second very quickly down to 66.5. In contrast to your view, I think that the having time to 33.25 will be some weeks away - if the rate of decline slows down as in a typical bubble collapse.
What is your basis for the growth rate of the bitcoin economy? A linear regression of the log closing price on Mt. Gox starting in 2010 to present suggests a bitcoin economy growth rate of 4.8x annually = 580%. That is a fantastic growth rate, but the market gets ahead of that when doubling several times in a few months.
Mt.Gox first day = 0.06, yesterday 73. No linear regression, just (days_open/30)th root (73/0.06) ~1.26, hence 3 months double.
It is more than you think. If we continue this way, $300k is expected in 2016
Quote
This bubble burst in 5 days instead of 5 months. ...
My numbers would be that $100 is the new $5 for the following months.
My numbers would be that $100 is the new $5 for the following months.
Bubble bursting follows a double exponential rate of decay, which is the opposite of what happened in the run up. Post peak, one would expect the price halving time to increase - thus the first halving from 266 down to 133, then the second very quickly down to 66.5. In contrast to your view, I think that the having time to 33.25 will be some weeks away - if the rate of decline slows down as in a typical bubble collapse.
What is your basis for the growth rate of the bitcoin economy? A linear regression of the log closing price on Mt. Gox starting in 2010 to present suggests a bitcoin economy growth rate of 4.8x annually = 580%. That is a fantastic growth rate, but the market gets ahead of that when doubling several times in a few months.
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This would mean we are gonna recover faster
You are saying that, by way of analogy and symmetry, that because the decline is faster this time, then the recovery will be too. That is plausible, but I think that the bottom will not be reached until people have forgotten about the bubble peak - months away.
This bubble burst in 5 days instead of 5 months. Let's face it, $32 sustainable coin price any day from now, is becoming more and more of a slim chance. Even crossing $50 is difficult, since the price was tested 4 separate times in intraday trading during the last week.
Last time we saw a quick recovery from $2 to $7, and then a long base at $5. My numbers would be that $100 is the new $5 for the following months.
Since the opening of Mt.Gox, bitcoin's price has doubled on average in 90 days. I agree with all the ones saying that this rapid an appreciation is inherently chaotic, since the bubbles will inevitably form and burst. I think we are actually below the trendline now, and that this is a sweet entry spot. When Mt.Gox was opened, 1000 people knew about Bitcoin, and on average they were willing to invest $100. Now the price is up 1000-fold, but the fundamentals have gotten 10^4-10^5 times better.
It is good to remember the big picture. In 2016 we'll hit $300k.
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This would mean we are gonna recover faster
You are saying that, by way of analogy and symmetry, that because the decline is faster this time, then the recovery will be too. That is plausible, but I think that the bottom will not be reached until people have forgotten about the bubble peak - months away.
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