The market was waiting for a jump so it could rally... - page 2.

Bitbuy

sr. member

Activity: 308

Merit: 250

Quote from: spiderbrain on May 22, 2014, 10:59:38 PM

We'll probably pop up to 700-800 pretty soon, but after that I imagine we'll have a month or two of people cashing out once they've broken even before it does anything interesting.

Yes, that's a possibility; unless those people have already panick-cashed out on the way down...If that's the case, it won't be two months.

spiderbrain

legendary

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Didn't surprise me that much, the dropping volume, slowing down-trend and huge spread all pointed to a reversal. You're completely right, though, there was a "trend trumps fundamentals" sentiment before. I find it amazing that everyone's expecting the next factor of 10 leg up straight away, though. We'll probably pop up to 700-800 pretty soon, but after that I imagine we'll have a month or two of people cashing out once they've broken even before it does anything interesting.

lay785

sr. member

Activity: 266

Merit: 250

nice insight. thanks

byronbb

legendary

Activity: 1414

Merit: 1000

HODL OR DIE

There has been tons of good news actually, it was just being capped by the China BS.

dree12

legendary

Activity: 1246

Merit: 1077

This recent price spike surprised me, but in hindsight it should not have.

The weeks preceding the price spike were among the most bullish I had ever seen. Speculators across this subforum were predicting breakouts, giving a variety of dubious but thought-out reasons. They were wrong time and time again, but the sentiment remained.

It is reasonable to suggest that this sentiment held out across the Bitcoin trading community—it was time for a rally, but when? Markets behave in irrational ways, and are extremely difficult to predict. But sentiment is a strong indicator. So when sentiment was so strong, why was the price still dropping like a stone?

My hypothesis is that markets will eagerly follow the sentiment if the trend agrees, but if the trend does not agree, markets will reluctantly side with the trend. It took a random one-day fluctuation to convince Bitcoiners the price was going back up, and then the rest is history.

Hindsight is always 20/20 of course, and I don't claim to be able to predict the future. Maybe this rally will fizzle out in time. But I think this hypothesis makes sense, seems to fit well with Bitcoin's history, and may come useful again sometime later.

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