Topic: Some points about the current uptrend overlooked by most (Read 1228 times)

you can also cross the Alpes by foot with no food.

Joke aside: Berlin is live and kicking. Their satoshi sqaure meeting is booming and in the news. The utterances of financial regulators in germany are being over-interpreted to the upside, in my mind... but such are journalists and it has effect nevertheless.

EDIT: btw: good points, McGyver. Especially the first one.

Yep €100 line has been broken! Anyway a large investor sees a good future in bitcoin!

I was referring to Mt.Gox price.

Yeah, I know, you're gonna tell me that Gox isn't relevant anymore, but the truth is that everyone is still watching Gox prices very closely as a kind of referrence, even if not actually making transactions there. Mt.Gox still has the highest liquidity and market depth.




Having different people consider different exchanges as their "true" price indicator has one very interesting side effect:

Any strong resistance level (either a previous high or any round figure in a major currency) gets split into more less strong: one on Mt.Gox and some other on other exchanges. This makes it easier to break any such barrier as less momentum is required.

I believe that the market has also started to price in emerging more "professional" exchanges such as Kraken and Coinsetter and above all the Winkelvoss ETF. Another thing that caught my attention is the eBay Deals video on bitcoin. I think a lot is brewing right now below the surface.

Last time I checked, 99.79 was below 100.

Where?
The only EU exchange that I know is bitstamp. And current bitstamp price is 95,09 euros / btc.

I think the key factors are


1)  All mining is ASIC now and these first generation machines are still very profitable, thus the miners don't need to sell any significant numbers of coins to cover costs.

2)  Gox is obviously useless for selling BTC for USD even if you needed too.

3)  Between the above two factors we have a complete cessation of newly minted coins flowing into exchanges.

4)  People still have long-term deflationary expectations and old coins are not being lured out of hoards in any significant number, particularly when a lot of people are still in negative territory and want to see a new all time high to sell.

5)  Some whale for some reason is buying up the few coins on Gox (At it's peak this year Gox has had at most 1% of the total BTC supply on it and its now at .3%) either fear or insolvency or a genuine desire to have coins, or an elaborate market manipulation.

6)  The combined lack of incoming coins with a rapid drawing off of thouse that remained the coin depth on Gox is collapsing and this is driving the price up hugely.

Not to mention the recognized in Germany where in Berlin you can actually live on it.

I believe the following factors relevant to the recent price movement got underestimated in most analysis:


1. Buying mining hardware served as a kind of "back door" for the investors to the Bitcoin world until quite recently.

This door is now at least half-closed due to the recent price:diffuculty ratio combined with anticipated further hashing power increases (2PH/s expected from CoinTerra in December, 4PH/s from Bitmine before April 2014, just to name the biggest). Those interested in getting larger quantities of Bitcoins can no longer sneak in by buying mining hardware without the risk of having substatially negative short-term return on their investment. Many may see OTC transactions with a premium as a more sensible alternative and I believe that recent price spikes on exchanges were liquidations of such large OTC buy-ins.


2. Any spikes on Mt.Gox got dismissed as not being genuine and attributed only to investors wanting to escape from Gox.

I get a strong feeling that the price actually "wanted" to go up for some time already, but was constantly suppressed by traders believing in the above. Their misguided resistance could only last for so long (or they would have to have indefinitely deep pockets...) and it seems that this volcano which has been "boiling" underneath for quite some time already is now just about to explode!


3. We just broke the 100 EUR barrier!

Many US-based traders tend to overlook Europe, a second major player in this game and how Bitcoin price tends to bounce off or stick to the round figures in EUR:

ATH being so close to 200 EUR
The biggest (so far) rally had a short-term correction around 100 EUR
May 2013 plateau around 100 EUR

It seems that the mythical "whale" is Euro-based!


4. If the price is only a result of blind market forces then why did it "dance around" such a round figure as 100 USD for so long?

Of course because of human psychology attributting something magical to "double digits", "triple digits", etc. (thinking like: "Ouch, we're back to double digits, so cheap! I must buy!"). This way we got kind of sticky to 100 USD (first on Mt.Gox, later on the other exchanges) and only recently we set ourselves free!

Are we gonna repeat the same exercise with prices denominated in EUR and having 100 EUR as the new strong support level? We shall see it soon...