One of the several things that make me skeptical of bitcoin's future is that its community resembles more a religious sect than a bunch of sane, rational nerds.
In order to sustain belief in their initial ideal, bitcoiners have developed a network of dogmas that is becoming increasingly intricate and increasingly disconnected from reality.
A substantial part of that theological edifice is meant to allow denial of the single most important fact about bitcoin:
CHINA SETS THE PRICE
To make the denial of this fact possible, bitcoiners pretend to believe, e.g: that almost all of the Chinese trade volume is fake; that BTC-China is the most important Chinese exchange (and the only honest one); that the November rally was due to some magical property of bitcoin that generates rallies at regular intervals, with exponentially increasing magnitudes; and a number of other bizarre dogmas.
Because of these dogmas, the main bitcoin chart sites still omit most or all the large Chinese exchanges (but they all carry the insignificant BTC-China). Even when it is obvious that price changes are clearly due to Chinese traders reacting to Chinese news, the deniers blame "stupid sheep" in the Western exchanges for "paying attention to China" -- when in fact the Western exchanges are tied to China by arbitrage, and follow China no matter what their clients think, wish, or do.
I can't understand how people hope to succeed in day trading or long-term investment without taking this basic and all-dominant fact into account.
On the other hand, it is easy to see why bitcoiners desperately need to deny this fact. Bitcoin entrepreneurs would not find investors and clients if they admitted that the value of their fundamental asset is decided and sustained by a legion of fickle amateur traders in China, who, a year ago, were all speculating on fermented tea or some other kind of tulip. Libertarians do not want to know that their main "anti-government weapon" was taken over by a country that they see as the epitome of oppressive government -- and was reduced by that government to a harmless hobby, in one day, with a single decree. And the old-timers, in particular, will never admit that "their" beloved bitcoin is no longer "theirs".
Don't make a complex situation simpler than it is.
Where do you get the idea from that the price is set by China? From your own "Chinese slumber" method? Last time I checked, it was wildly off, during several large swings.
Or is it your impression that China/Huobi "leads" all large movements, which is somehow self-evident? Then the answer is: no, they don't. They lead, and they follow, just as you would expect between exchanges that are linked together by arbitrage.
Here's an example, taken from the April 10 crash. China "led" the first part of the decline, volume picking up at around 2:45 UTC, and price from 2700 to 2400. Bitstamp follows, 4k volume, but 400 holds so far.
Next, Huobi slightly recovers, back to 2500. Volume declining along. And suddenly comes Bitstamp with another 4k dump, and China tags along (on barely any volume), but completely on the heels of stamp wrt price.
2nd observation: the Huobi bottom came in almost 2 hours *after* stamp. That makes zero sense if stamp blindly "follows" China.
The reality of the Bitcoin market is more complex than you describe it, and it's a pretty poor indication of your analytical faculties that you feel the need to oversimplify it to the point where it becomes grotesque.
This reminds me of the often stated "fact" that stamp blindly follows gox. Of course prices on the two exchanges were correlated to an extremely high degree, and often enough, stamp followed gox, but towards the end, the two simply decoupled, without much ado. If your theory can't account for that (and in the polemic way your phrased it, it cannot), then it is worthless, in my opinion.
graphs: 15min views of stamp and huobi on April 10
