BTC =
http://hdwallphotos.com/wp-content/uploads/2014/03/High-Roller-Coaster-Cartoon-Wallpaper-HD.jpg
http://hdwallphotos.com/wp-content/uploads/2014/03/High-Roller-Coaster-Cartoon-Wallpaper-HD.jpg
and WEEEEEEEEEEEE!!!
Topic: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 26278. (Read 26711908 times)
August 18, 2014, 11:49:02 PM
August 18, 2014, 11:47:45 PM
Just posted the following on reddit in response to "wtf is causing price to fall?", thought I'd share it here, too:
-----------------
Market dynamics:
Negative feedback
Usually there is a dampening effect prevalent in the market
It's pretty easy to see: at lower prices there's more people willing to buy, at higher prices there's more people willing to sell.
This has dampening effect on price movement: each time the price wants to take a hike in any direction, it's slowed down by this.
This is called **negative feedback**, because a result of the process influences the process itself in such a way that **it reduces changes**.
However in some situations like now there are stronger effects that resemble **positive feedback**. With positive feedback, the results of the process influence the process itself in such a way that the **magnitude of the change increases**.
I can think of a couple of things that might currently be in effect and have a positive feedback on falling price:
So: the system is out of balance.
Fortunately, all of the above positive feedback effects are dependant on some resource that is reduced and ultimately depleted in the process:
So don't worry: the imbalance to the downside is only temporary ;-)
----------------
not sure how naive or accurate, but these are my thoughts on the reasons of the price fall.
-----------------
Market dynamics:
Negative feedback
Usually there is a dampening effect prevalent in the market
- when price rises, demand decreases and supply increases
- when price falls, demand increases and supply decreases
It's pretty easy to see: at lower prices there's more people willing to buy, at higher prices there's more people willing to sell.
This has dampening effect on price movement: each time the price wants to take a hike in any direction, it's slowed down by this.
This is called **negative feedback**, because a result of the process influences the process itself in such a way that **it reduces changes**.
However in some situations like now there are stronger effects that resemble **positive feedback**. With positive feedback, the results of the process influence the process itself in such a way that the **magnitude of the change increases**.
I can think of a couple of things that might currently be in effect and have a positive feedback on falling price:
- Miners: miners are forced to sell part of the mined coins to cover fiat expenses. A falling price causes them to increase the percentage of coins they have to sell => positive feedback
- Margin calls, forced liquidation: falling price can trigger leveraged longs on exchange to be automatically liquidated, which results in more selling => positive feedback
- Market participant psychology: falling price causes frustration, anger, and fear in at least some market participants, which in turn causes them to sell => positive feedback.
So: the system is out of balance.
Fortunately, all of the above positive feedback effects are dependant on some resource that is reduced and ultimately depleted in the process:
- miners: they cannot sell more than 100%
- liquidations: there's only so many longs
- psychology: the panic-sellers have only a limited amount of coins
So don't worry: the imbalance to the downside is only temporary ;-)
----------------
not sure how naive or accurate, but these are my thoughts on the reasons of the price fall.
I think what you wrote is really good and gives some perspective; however, I doubt that you can capture all the reasons for market changes...
In any downward trend there seems to also be manipulation and opportunism that cause additional positive feedback effects.
August 18, 2014, 11:37:21 PM
No power in this yet. 
August 18, 2014, 11:27:42 PM
What you gotta watch out for are the manipulative manipulators out-manipulating the previous manipulators.
I thought that when the hash rate passed 150 PH/s the Network would become self-conscious and would take control of everything, so we would not have to worry about that anymore. August 18, 2014, 11:24:23 PM
Hoping for a sweet ole' bulltarp to sell into during this calm. Shorted at 547, closed at 460.
Alot dumpage to come at any rate, sharpen your knives and get ready to pounce.
Alot dumpage to come at any rate, sharpen your knives and get ready to pounce.
August 18, 2014, 11:18:56 PM
It's now or never 
This is Spartaaaa
This is Spartaaaa
August 18, 2014, 11:15:46 PM
BFX finally breaking 465
August 18, 2014, 11:10:09 PM
Windjc, never mind, I am not interested in arguing it a lot.
Just calm down please when you feel bearish or bullish because you have history of being extremely aggressive in promoting your market feelings at very bad times. Just check your posts from last big crash and last big pump and and you'll see it.
Cheers
Just calm down please when you feel bearish or bullish because you have history of being extremely aggressive in promoting your market feelings at very bad times. Just check your posts from last big crash and last big pump and and you'll see it.
Cheers
At 420 I was preaching that we werent getting fresh fiat. And we weren't. However, meanwhile sellers dissappear, buyers leveraged themselves to the hilt and up we went.
At 650, I never ever ever thought we were going to moon. I thought we might test 710. Thats where I really wanted to sell. I held longer than I should have for sure.
Now, I think we have a technical problem. Every technical I watch says we have at least one more wave down. Maybe we don't. But does this feel like $66 to you?
I didnt say we would be going much lower - I said lower - but not necessarily much lower. But I do believe people should prepare themselves for real hard core capitulation. If it comes.
OK, never mind.
August 18, 2014, 11:07:35 PM
Seems the bfx usd swaps aren't increasing despite this hidden wall absorbing a lot of coins. So whoever it is isn't borrowing the cash. They have the cash. Probably one of the lenders who got fed up with the lower swap demand rates currently.
August 18, 2014, 11:04:04 PM
Windjc, never mind, I am not interested in arguing it a lot.
Just calm down please when you feel bearish or bullish because you have history of being extremely aggressive in promoting your market feelings at very bad times. Just check your posts from last big crash and last big pump and and you'll see it.
Cheers
Just calm down please when you feel bearish or bullish because you have history of being extremely aggressive in promoting your market feelings at very bad times. Just check your posts from last big crash and last big pump and and you'll see it.
Cheers
At 420 I was preaching that we werent getting fresh fiat. And we weren't. However, meanwhile sellers dissappear, buyers leveraged themselves to the hilt and up we went.
At 650, I never ever ever thought we were going to moon. I thought we might test 710. Thats where I really wanted to sell. I held longer than I should have for sure.
Now, I think we have a technical problem. Every technical I watch says we have at least one more wave down. Maybe we don't. But does this feel like $66 to you?
I didnt say we would be going much lower - I said lower - but not necessarily much lower. But I do believe people should prepare themselves for real hard core capitulation. If it comes.
August 18, 2014, 11:02:30 PM
Also I'm stupid and that isnt log. The random intervals at the bottom confused me. (1250, 2500, 5000, 10000)
Doesn't matter. All you need to know is that manipulators are out-manipulating the manipulators.
That's extremely reassuring. =S
What you gotta watch out for are the manipulative manipulators out-manipulating the previous manipulators.
Well, I guess it is almost like a free market in that way...
I would agree that an anti anti-free market is free.
August 18, 2014, 11:02:13 PM
I mean the price is down...but the hash rate is 200,000,000 gh/s strong.. so at least someone believe in mining 
lol
lol August 18, 2014, 11:01:21 PM
Also I'm stupid and that isnt log. The random intervals at the bottom confused me. (1250, 2500, 5000, 10000)
Doesn't matter. All you need to know is that manipulators are out-manipulating the manipulators.
That's extremely reassuring. =S
What you gotta watch out for are the manipulative manipulators out-manipulating the previous manipulators.
Well, I guess it is almost like a free market in that way...
August 18, 2014, 11:00:58 PM
Windjc, never mind, I am not interested in arguing it a lot. ANd I even agree with you here, it does not look good, I wrote earlier that this is first time I feel fear since I am in Bitcoin.
Just calm down please when you feel bearish or bullish because you have history of being extremely aggressive in promoting your market feelings at very bad times. Just check your posts from last big crash and last big pump and and you'll see it.
Cheers
Just calm down please when you feel bearish or bullish because you have history of being extremely aggressive in promoting your market feelings at very bad times. Just check your posts from last big crash and last big pump and and you'll see it.
Cheers
August 18, 2014, 11:00:26 PM
Also I'm stupid and that isnt log. The random intervals at the bottom confused me. (1250, 2500, 5000, 10000)
Doesn't matter. All you need to know is that manipulators are out-manipulating the manipulators.
That's extremely reassuring. =S
What you gotta watch out for are the manipulative manipulators out-manipulating the previous manipulators.
August 18, 2014, 10:59:35 PM
August 18, 2014, 10:59:30 PM
But that guy at bfx managed to calm the market for sure. I'd give a penny for his thoughts.
That makes me wonder if it isn't the exchange just trading to itself between exchanges to just hold the line. And if so, they are playing God which is no cool. But, you're right, it did give people a breather and the Order Book a chance to fill in a little more.
To be honest, I don't give a shit who it is as long as it manages to stop this drop and install some confidence into market.
Fair. My bet is that it is the Batman.
August 18, 2014, 10:58:49 PM
Also I'm stupid and that isnt log. The random intervals at the bottom confused me. (1250, 2500, 5000, 10000)
Doesn't matter. All you need to know is that manipulators are out manipulating the manipulators.
That's extremely reassuring. =S
August 18, 2014, 10:57:46 PM
But that guy at bfx managed to calm the market for sure. I'd give a penny for his thoughts.
That makes me wonder if it isn't the exchange just trading to itself between exchanges to just hold the line. And if so, they are playing God which is no cool. But, you're right, it did give people a breather and the Order Book a chance to fill in a little more.
To be honest, I don't give a shit who it is as long as it manages to stop this drop and install some confidence into market.
Jump to: