Topic: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 3528. (Read 26610065 times)

Looks like we have a bit of a scrap going on with the price. Though possibly just aftershocks.

When you took margin longs 20 years ago as you previously described, you were shorting the dollar as priced in semi-fungible tokens called "stocks".

People need to flip their thinking about BTC.  "Selling" BTC means buying dollars - going long on the dollar, and doing it for cash if you are not using margin.  "Buying" BTC means selling dollars - taking a short position against the dollar, even if you are not using margin to short.  Shorting BTC means taking a leveraged long on the dollar.  And taking a leveraged long position on BTC is short-selling the dollar on margin:  Borrowing an asset that is expected to depreciate, and selling it for money.

Related in concept, but not directed at you:

People are way too stuck in thinking about dollars as "money", and everything else as "assets priced in money (= dollars)".

It was quite the spectacle when I tried to explain some concepts to a newbie by putting them in familiar terms, based on his own experience.

I told him that when he took a home purchase mortgage loan, he was shorting the dollar as priced in a non-fungible token called a "house".  If the dollar rises too much, as priced in units of his house, then the lender reserves the right to call the loan due immediately, among other remedies; this is logically similar to a margin call.  And indeed, all home purchase mortgages contain such terms in the fine print - although they are rarely invoked because the dollar/house market has low volatility, and dollars rarely appreciate as priced in houses.  Anyway, the expense and other overhead of foreclosures usually helps to deter lenders from being overly aggressive in foreclosing unless necessary.  By contrast, as I pointed out earlier, exchanges have a perverse incentive to stack the deck to create more cryptocurrency "foreclosures" (liquidations).

He didn't get it.

If he had understood that, then perhaps he would have been able to "get" Bitcoin.  (And he would have understood why he should avoid both cryptocurrency margin accounts, and home purchase mortgages!)

---

Yes, I explained earlier how I got myself into such a predicament when I know all this - "I know better than that..."

Explanation

The chance is not 50/50.  For example, Murphy's Law, which is infinitely more reliable than PlanB, stipulates that the moment after I drop a large proportion of my BTC without being forced by imminent liquidation, BTC will suddenly rocket off to six digits.  (But what does Murphy say about the chances if I don't?)


Thanks for the suggestion.  Sleeping better is not my primary goal:  Salvaging as much BTC as I can is my primary goal (now tempered by "no more dumping other assets into this account!"), even at the expense of sleep, health, sanity, and everything else that I have been sacrificing for months because of this.  Anyway, I just crunched some numbers for a back-of-the-envelope estimate of something that changes as the BTC price fluctuates.

At $30,600 (the approximate ticker price when I saw your post, and started spitballing various scenarios), I would need to sell about 61% of my BTC to get my liquidation price down to the current 200 WMA.  That is still not "no chance of a total wipeout", because (a) in the past, it has often wicked below 200 WMA when it bottoms, and (b) 200 WMA is not guaranteed, anyway.

I would need to sell at least 65%-70% to get myself to a level that could be considered pretty much more or less "safe" - excluding flash-crashes, such as the March 2020 Covid crash, when it did the proportionate equivalent of very briefly dropping to about $12k now.

No matter what level is considered "safe", it must account for the wicks - such as the very brief drop below $30k that almost got me liquidated yesterday.


This is all assuming that I could sell at the stated price.  I have enough that the way that market makers arrange their orders, I would need either to catch a period of low volatility (when makers tend to set their real spread tighter), or use some trading strategy to avoid slicing through through the order book enough to change the whole calculation (when makers tend to set a string of tiny orders on the book, withdrawing their bigger orders to as much as 1–2% away from mid-market).

This does not mean I'm rich!  To illustrate the problem, my last 0.2 BTC sell during extreme volatility yesterday cut through the order book so that most of it was filled about $200 lower than the ticker price, thus appreciably deepening the hourly candlestick's bottom wick on this exchange as seen here.  (Those who want to take a lesson out of this for newbies should note the effect on cascading liquidations during crashes; I think that not many people realize this, or have studied it.)  And even if I am have a relatively small amount compared to some here, 61%-75% of what I have is much more than 0.2 BTC!

The effect of leverage is nonlinear.  Many margin newbies don't realize that.  Every 1% increase or decrease in BTC price has a counterintuitively large impact on the amount that I would need to sell to reach safety level x, for any given x.  (This the scenario now, as I conclude this writing at $31,500, is significantly better than when I started bouncing numbers and thinking this through - but not enough "significantly" to avoid being horrific.)  As I said in some earlier post, at $47k last month, I could have walked away clean with more BTC than I started with; but now, no matter what I do, I will lose most of my long-held holdings if yesterday was not the bottom, or at worst close to the bottom.

First off.. any kind of "I told you so" tone is unbecoming of a wall observer gentlemen.. even if you proclaim NOT to be one..

Second:  I am wondering whether you just throw random numbers out of your ass?

hahahahahaha

Just asking? 

Yeah, if you throw out a bunch of random numbers, then sooner or later, you are going to be correct about some of the random numbers that you threw out there, but I doubt that your being correct (if it happens) constitutes an "I told you so." 

Sure, if you are feeling gleeful that you made bank, then there is no problem with that.  I doubt anyone would be hating on you, even if you were to make more money based on whatever play that you made based on your BTC price projections.


As I type this post, the 200-week moving average is $21,736.

https://www.lookintobitcoin.com/charts/200-week-moving-average-heatmap/

Do you want to proclaim that you are referring to some other 200WMA.. if so, you better specify how you would get the 200-week MA to be $24.5k when it is actually $21,736. In that regard, at least we should be attempting to use the same referents.. or specify if we are using some other measure in order to throw out our proclamation of number representations.

I will concede that it may well not make a whole hell of a lot of difference whether the BTC price goes to $24.5k or $21.7k or somewhere in that ballpark, and I have quite a few doubts about whether technical analysis is really telling us much of anything in regards to where the BTC price is going to go.. even though some of the averages can give us some clues about where we are at.. and even to attempt to figure out how much of a bargain that we might be getting at this particular price.. especially if the more bullish case ends up playing out - of course, based on a variety of fundamentals.

By the way, regarding your assertion that $24.5k is inevitable... I would be careful in regards to believing any kind of BTC price movement to be inevitable, unless it had already happened... So, if you are trying to proclaim that something in the future is "inevitable" you are bound to be overly calculating such an outcome.



You have some kind of a theory about what Saylor is going to do?

You must have been reading a lot of nonsense if you believe that being in "unrealized loss" is going to cause any kind of behavior besides possibly buying a wee bit moar coinz, perhaps? perhaps? 

but hey.. let's see if it matters to be bringing up the status of Saylor's coins?

You may well be too much of a newbie to remember Tim Draper? 

Do you know the story?

Do I need to tell some brief version of it?

Largely, in about June 2014, Draper had publicly bought the US Fed Marshall auction coins of around 30k BTC for a bit over $600 per coin, and the reason that he bought that many is because he was bidding more than the spot price, and so he thought that he was a genius for getting all of the coins, but you know what happened to the BTC price?  He was largely negative on those coins until late 2016... .. Yeah there were a few blips in which his coins went into profits in mid 2016, but they went back into the negative after the supposed Bitfinex hack.... and so part of the point is that he was being called a fool for around three years, and no coiners and naysayers were suggesting a variety of theories about "poor Tim".. blah blah blah..

And, how did that work out?  Saylor is in a much better position than ole Tim Draper, even though Draper did quite well for his lil selfie in spite of so many doubters and conspiratorial folks who cannot appreciate the power of conviction.



Bitcoin no gives no shits what you wish.


Is that how it works?


Nothing wrong with buying regularly and also buying on dips... just as long as you do not presume that you have your purchase target price and timeline in the bag because there are no such guarantees in bitcoinlandia.. .. and careful when you presume that you are doing smarter things than the rest of us or that you know more than other guys here.


Oh?  That little hint helped me to identify a fix that I could make to my set up, and  I switched over to another exchange..

That looks much nicer to have a data feed (and a price) working/showing again...

Great!!!!!


Are you lost, buddy (not referring to chart buddy.. chart buddy seems to know where we are at, even though sometimes not cooperating very well in terms of his/her/their (jk) posts)?

Why would we give anything approaching two ratt's asses about "the total capital of the crypto" blah blah blah?

We be talking about king daddy in these here parts... get a grip Hamza!!!!  snap out of it!!!   

I don't typically short anything. FAANG looked like a short, but still I hesitated.
Well..i can now buy 30-50% MORE FAANG for my cash if i want to, but i won't.

You deserve a battening slappening for that one, biodom.

 


Like deserves like.

 


I doubt that your being wrong or whatever had any effect at all on the BTC price.

You were just wrong, and that's all.. .. except the fact that you remain stubbornly affixed on that largely unimportant number that for all intents and purposes we have reached.. even though technically, we were $1k shy of actually reaching it.

Are you sorry that you asked?  yet?








 





Have you ever considered renaming your lil donkey-breath selfie?

How about "Proud Annoying Hon"?

I know it is bit long, but still.



I have been wondering the same.. .it's been down for a few days...

One of the benefits of buying BTC early is that the average buy price of one's stash can be very low. So low, that dips like the one we're currently experiencing can be treated as almost non-events. Informed, hardened HoDLers, the ones who understand Bitcoin and have endured the 2017-2020 bear season, can go through such dips without any fear or uncertainty of what's coming. But even newbies in Bitcoin should not fear the volatility. We're still so early in Bitcoin's journey, that any amount of selling to keep fiat in a bank is much more risky in the long term than HoDLing and waiting. There are those who are willing to take the risk and ride the short-term wave, like LFC_Bitcoin's well-played sell near the top and subsequent buy near the local bottom. Good for him and I'm happy that it worked out, but I believe luck played a big part in it -- it could have gone the other way. I'm not even considering taking such risk -- Bitcoin is just too precious to sell and risk not being able to buy back lower. What I do is DCA by buying small/medium-sized chunks of corn to add to my stash whenever I can. Not as profitable as selling high and buying low (if I'm lucky), but it's 100% safe (in the sense that my stash is always increasing and always stays under my full control), and still taking advantage of each BTFD opportunity as it comes.

As for the worth of one's stash, I'd use the 200-Week Moving Average (200-WMA) as a reliable, robust wealth size metric. The 200-WMA has grown to be my go-to metric when it comes to past Bitcoin performance and future expectations. The problem with observing spot price and zooming in, is that patterns tend to get dissolved and lost into the randomness of the short-term price action. The magic comes when zooming out -- patterns spring out of the noise and become clearly visible, while noise is averaged out and disappears. You can let your monitor and your eyes/brain do the averaging, or you can let math & science do it. I choose the latter option, combined with Bitcoin's 4-year Halving cycle, hence the 200-WMA. Two things: 1. The 200-WMA is monotonically increasing (i.e, has never decreased at any point in its history), 2. Spot price has practically never dropped below the 200-WMA for any significant length of time. Those two things should be enough to see where things are going. Measuring one's Bitcoin wealth in terms of the 200-WMA is a safe, conservative lower bound, that's backed not by weeks or months, but by 13+ years' worth of historical data. It's currently at $21,719. Of course, with Bitcoin anything is possible, any model can break, as seems to be the case with Plan B's S2F model, and HoDLers should be prepared for anything. Still, IMHO, the odds of Bitcoin's spot price getting and staying lower than the 200-WMA for a significant amount of time are pretty low to non-existent.

tl;dr: Don't be a weak hand, don't be scared by dips, no matter how deep they may appear to be. Just zoom out and use math & science to separate the trend from the noise. The 200-WMA indicator should put your mind at ease regarding where we're going. Yes, spot price and the 200-WMA tend to meet every once in a long while, but only briefly, before spot price quickly shoots upwards. Still worried and thinking of selling? You do what you have to do, but I fear that along with the fiat you're going to get, you'll soon have to put an 'M.' in between your first name and surname. Not to mention the batslaps and rusty pipes you're going to be receiving...    Your choice.

I have a long history of short-term speculation going the other way on me right after I buy or sell...  I buy, the price goes down.  Maybe 80% of the time!  Anyone could make short-term money taking the other side of my trade.

Longer term I do better.


proudhon is probably my favorite character here at W.O.  For real.  Though you and the DUDE are close runners-up.  

Explanation

Can you sell half of your position? It might help you sleep better if there is no chance of a total wipeout.

At any point in time, there is a 50/50 chance of the pricing going up or down. You need to be positioned accordingly.

Not meant for everyone to read it properly, I guess?

Also, there is no particular strategy on when and how you accumulate, you just do it.

Newbie question here:  Is it prohibited to threaten or extort ChartBuddy?  I think that if his charts do not show number going up, I may want to knee-cap him and post hacked naked pics of his sister, Tickerina.  Or if he doesn't have knees because he's a robot, I could delete his config files, or drop tables in his database, or something like that.


No.  I would never do something so stupid as to take a leveraged long on a highly volatile asset.

Instead, I shorted the dollar at high leverage.  The dollar's fundamentals are wretchedly bad.  In the long term, it is practically guaranteed to depreciate severely.  Shorting the dollar is smart - at least in theory.

The problem is that "the market can stay irrational longer than you can stay solvent", and the dollar is now in a bull-run bubble.


When I tried trading tech stocks in the same time period, I managed to lose half the portfolio's original value without any margin at all.  I am talented!  You went all the way to zero, but you needed margin to do it.  You have no skills at losing money fast.

See, I can laugh about that.  Because the loss was in dollars - not in Bitcoin, which did not yet exist.  It's only money!


See this:

Explanation

Exactly Bro

DCA straightway is still gonna work for the upcoming 5 years let me explain if an investment of $30M or Less like $5M is made with that being said then a Holding gap from that to the next Halving will be like 2 to 3 years after that Halving the Block will 1.5 Rewarding then BTC Price to Cost of Mining Block will decide the price. That will be easily around $1M.

You can calculate your profits there these Strategies are good for the Countries Under High Debits to pay.

Not Day Dreaming the  Realized value of BTC is the proof as you can see from the chart currently the realized value is around 25k and ATH is 69k but after 2 Halvings due to Realized value and ATH will be close to the ATH.

Is this confirmed by sources?

You deserve a bat-slappening for that comment, dude...


Whoaza!!!!!

To the extent the information contained therein is even accurate, it looks good for 2021, but given our current spot price, and our recent BTC price dynamics, it does not look so great in terms of what could be in store for 2022.

 


You failed to cheer me up, BitcoinBunny.,. therefore a batslappening is due.


 


You deserve a batslappening for sharing such an ambiguous and distracting picture and failing/refusing to explain ur lil selfie for having had provided such imagenationings for wwwwwweeeeee largely innocent WO peeps.


No excuses, Hueristic!!!!!!!!


 


Ok.... I will take your vices and try harder... just like my idol Boxer in Animal Farm.  

In other words, no batslap for you... you suck.



You must be gay.

 

Explanation