Topic: So when's the crash? - page 3. (Read 10805 times)

If nothing goes wrong with bitcoin, you may well be right in the long run.

But for the speculator the question is a different one: Where is the price going in the short term?

For the next months the answer is generally: down. The price will fluctuate up and down, but overall it will go down, perhaps to $20, perhaps lower.

By the way, the price just went down to $90.

Bitcoin is clearly a better place to have your money than Liberty Reserve and at any given times there are probably billions sitting in LR. All that's needed is time to pass, so clearly Bitcoin is way undervalued.

As I wrote:


If all my predictions were always perfectly correct, I would no longer be here.

But I stick to my earlier prediction that "we will see the bitcoin price essentially shrink over the next couple of months." I also predict that the price will go below $40.

Of course, that latter prediction can turn out to be wrong if something unforeseen happens, but I still consider it very likely that the price will go below $40 at some time later this year or next.

The big question in a price bubble is always when to sell or how long to ride the wave. The longer you hold on, the higher the profit, but the bigger the risk that the bubble bursts before you got out. During a bursting bubble you can usually not trade, because the exchanges stop working, so you can lose a lot.

Being conservative, I tend to sell early, more or less when I recognize that I'm in a bubble. But I'm working on it. Predicting bubbles may be one of the finer arts of speculation. It remains very imprecise though, because a few biggish sales can prick a bubble, and these cannot be predicted.

Cough. Price ~$40. 

In retrospect my "personal guess" was pretty good. The bubble did burst within three days. It actually did go up to $200 and beyond even within these few days, but fell back steeply, as expected.

It is good to check one's predictions later to hone the predictive skills, something every successful speculator probably does.

You mean a "permanently high plateau" at around $190?

I admit I'm basing this on little more than gut feeling. But the Sunday hike did feel like a start of the last leg in the rally. It happened in anticipation of new money coming to exchanges on Tuesday. Bubbles tend to accelerate just before they burst, for obvious reasons (people are making the mistake of viewing past performance as a proof of the future).

We'll see in the next few days. Consolidation below $200 would be more bullish than a rally to $300, in my book.

I have pondered this until my brain almost exploded. My best result is that a rough guess is possible, but it is fundamentally impossible to predict with any precision when or at what price a bubble bursts. This is similar to volcano eruptions. Sometimes you get some advance warnings, but a precise prediction is still impossible.

Why is this so? Because a single big seller can burst the bubble by selling a large amount and perhaps another large amount just when the price attempts to recover. If there is no big sale, the bubble can inflate higher and higher.

A second effect is that buyers simply run out of money. If you look at the bitcoin price curve of the last few months, you see that we have super-exponential growth, which is impossible to sustain for long. Even exponential growth quickly becomes unsustainable.

And when you look at historic price bubbles, one conspicuous observation is that the peak is always pointed. You never see a rounded head or a "permanently high plateau". It does not necessarily have to be pointed when you look at it through a microscope, but for any normal observer a price bubble always has a pointed peak.

This seems to indicate to me that the bubble also bursts on its own when the accelerating price increase cannot be sustained any longer.

I believe that there are a few simple psychological phenomena at work in these bubbles. You know how the run-up feels—you could observe that here all the time. After the burst you get the effect that many late buyers panic and sell at a loss, relatively quickly driving down the price.

By the way, let me try to explain the stupidity of a price bubble in a different way. From the dollar point of view, bitcoin trading is a zero sum game—no dollars are created or destroyed. They only change hands. This means that necessarily there will be winners and losers. But against all rational sense almost everybody believes to be a winner. That is like asking people whether they believe to be above average car drivers; some 80% answer that they believe exactly that.

Thats what they said a couple of weeks ago.

I'd like to know if there is really someone who would possibly able to know when the market crashes.

or never

I'm starting to think we'll reach the top this week. Or the next.

I'm not scared about the early adopters, i'm scared about hacker groups or just wealthy individuals that are currently playing the market. I have no doubts that the bicoin will appreciate in value in the long term, but if you are in it for the short term (3-6 months), then chances are you are gonna lose money. If you've been holding for a while, it's an easy hold right now.

I agree, its the only negative I've found so far. Love everything else about it. I'm hoping with more volume it stabilizes and big sell offs are a thing of the past for it, but then again, we'd need to know who the single biggest holder of bitcoins is, as that person is to be feared! Anyone know who holds the biggest amount of bitcoins? The leading bitcoin farmer on BTC Guild?

Many people seem to be really scared that the price will crash when early adopters star to dumb their Bitcoins. But what they don't understand is that soon there won't be any need to cash out. When price is 10k$/BTC you can just buy your mansion or yacht with Bitcoins directly.

carsh what carsh  

Let's just hope never But I wouldn't be surprised if we went down a little this month. It's seeming a little too good to be true, despite all the great supporting facts that this is just a correction :>

Thats the 1 scary thing about BTC i fear.
But also pertty much the only negative thing I can think of

The crash will come as soon as someone with 50,000 bit coins decides that its time to cash out and then buy it all back when the market starts recovering Pretty scary.

Why would there be such a value? For what I've seen, bitbears will always believe that we're in a bubble, they did it at 14, at 114, and would do the same at 1014.

In fact, the higher the price grows, the better are the odds of a correction, so louder bears.