Supply and Demand - Simple question to a chart

notme

legendary

Activity: 1904

Merit: 1002

Quote from: Luigi on February 06, 2013, 06:00:55 PM

Hi,

not paying any attention to bitcoins lately, I know realize how its marketprice has risen since november or mid january. Trying to understand this I looked at this graph:

http://www.bitcoinx.com/charts1/depth_mtgox.png

and I find myself with two questions:

Do I interpret correctly that the red chart reflects the amount of BTCs people ask for / would like to buy? If that is so, why does BTC price rice with declining demand? Or am I indeed confusing ask and bid sum here?
Why do the graphs seem to have a synchronized or even an axially symmetric signal/part to their trends?

Thank you
Luigi

Red is asks... in other words, what people with bitcoins are asking in exchange for them. So you have that backwards. In addition, there are many more exchanges and much volume never touches an exchange, so you can't use that graph to determine supply and demand for bitcoin.

Foxpup

legendary

Activity: 4326

Merit: 3041

Vile Vixen and Miss Bitcointalk 2021-2023

You've got the bid and ask mixed up. The "ask" is what people want to sell (they "ask" for a particular price for the coins they're selling) and the "bid" is what people want to buy (they "bid" a particular price for the coins they want).

xxjs

sr. member

Activity: 280

Merit: 250

Supply and demand should be expressed in how many at what price. It does not help if the supply is thousands of BTC at USD30/BTC, when there is no demand at that price.

These graphs are most useful around the eqilibrium. Too far off that point, it does not express real demand or supply. It is too easy to put up a big order, and it is also easy to cancel the order when the actual sales price comes close.

Luigi

jr. member

Activity: 39

Merit: 1

Hi,

not paying any attention to bitcoins lately, I know realize how its marketprice has risen since november or mid january. Trying to understand this I looked at this graph:

http://www.bitcoinx.com/charts1/depth_mtgox.png

and I find myself with two questions:

Do I interpret correctly that the red chart reflects the amount of BTCs people ask for / would like to buy? If that is so, why does BTC price rice with declining demand? Or am I indeed confusing ask and bid sum here?
Why do the graphs seem to have a synchronized or even an axially symmetric signal/part to their trends?

Thank you
Luigi

Topic: Supply and Demand - Simple question to a chart (Read 2270 times)