So you seem to agree that Huobi is dying. What happens when it flat-lines? bang zoom to the moon immediately or a sharp dip before liftoff like with Silk Road and Gox? I think a sharp dip is probable. What's worse is that the longer it lives, the lower the price is likely to sink before that last. sharp. dip.
I expect it to die or at least become dormant, yes. What I was trying to say is that it may go out almost invisibly. The volume numbers are misleading. They can effect subjective impressions, but not supply and demand. I think price is low enough now so that demand is largely insensitive to price. Even stronger: Most of the non-churn demand is very inelastic. But the fiat turnover will have to decline as the coins are drained by the arbitrageurs, and the impact of arbitrage on the free market will be limited to that quantity of supply. I would expect it to decline very suddenly, and perhaps resume intermittently as the last few elastic coins get shaken out in spurts, then the supply impact would end completely. Because this will be invisible to us, it will just be a slight supply cliff, mostly lost in the noise, visible primarily in price decoupling. The sentiment reaction may be early or late. If it takes a long time for price decoupling to become obvious, and the exchange remains operational, sentiment may be very late indeed, and the reaction almost invisibly slow.
I've never really studied sentiment, although the guy who sits next to me in the city has built his career on leading edge automated sentiment analysis, so my only excuse is sheer overload -- anyhow, I'm not the one to estimate whether market sentiment will be early or late. If its early, it could be seen in a more sudden price rise. I'm not clear what is the case for another capitulative V-bottom. I still think Gox fulfilled the capitulation role in this hype-cycle. If Huobi, BTCChina, OkCoin were to off-shore, this might create a sharp sentiment break.
My book allows for a decline to the 200s still, in case I'm wrong. But I think Risto would win the bet with windjc, if price were unmanipulated (meaning neither of them trades until it settles, not even by proxy or hedging). I went north of 100% this week, and I continue to average in to higher leverage very gradually. I'm also shaking trees, feeling between couch cushions, and rolling IWM short gains into BTC after every weekly option expiration.
