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Cluster2k

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Quote from: grod on October 08, 2011, 12:36:06 PM

Quote from: Technomage on October 08, 2011, 06:43:34 AM

But we'll see.

IMO BitMagic is right. We've had a shift from mine-and-hoard to a mine-and-sell strategy as BTC went lower and lower from a bubble peak. So the selling pressure on the market increased even though the dollar volume decreased.

I had a 'mine and sell' mentality from day one. Who could know what the future value of a bitcoin could be? I originally sold some at $7. Was a bit painful watching them go to $15, then $20, and upwards through $25. To the moon, and beyond, was the general feeling of bitcoin's value on this forum.

I kept mining and selling, progressively through the 20s, high teens, and dumped the rest at $12. Looks like a pretty damn good decision right now.

Quote from: grod on October 08, 2011, 12:36:06 PM

The market may be able to absorb 1000 new bitcoins a day, but it has a hard time with 30,000 at once. (just a wild guess that somewhere around 15% of mined coins are being sold monthly, up from 10%). And it's a lucky thing for bitcoin that people who aren't willing to deposit dollars are at least "depositing" the cost of their electric bill. If the full 7200 coins a day got sold it'd be game over in less than 3 months.

By mining and not monetizing their bitcoins, miners took on a considerable amount of risk. I maintained bitcoins were a high risk, highly speculative investment. Many disagreed. I hope not too many people were burned on the way down.

The funny thing is, bitcoin does its 'government free, bank free' currency model just as well whether it's valued at $1 or $100. Bitcoin hasn't intrinsically changed in nature. It's still the same libertarian commodity it was in January 2011. It's just that it's worth a lot less fiat currency units now than it was a few months ago. If we value bitcoin as a commodity based on its fiat currency value, doesn't that devalue bitcoin as a whole?

grod

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Quote from: Technomage on October 08, 2011, 06:43:34 AM

But we'll see.

Yes, we will. $5 looked to be pretty darn impenetrable.

IMO BitMagic is right. We've had a shift from mine-and-hoard to a mine-and-sell strategy as BTC went lower and lower from a bubble peak. So the selling pressure on the market increased even though the dollar volume decreased.

That's why we have a month of stagnation followed by a drop. Miners mine-and-hold hoping for a bounce. When it doesn't materialize (and in fact they're looking a bear straight in the mug) they dump knowing they'll mine their position back over the coming month. Possibly even increase it if other miners flee and difficulty drops.

The market may be able to absorb 1000 new bitcoins a day, but it has a hard time with 30,000 at once. (just a wild guess that somewhere around 15% of mined coins are being sold monthly, up from 10%). And it's a lucky thing for bitcoin that people who aren't willing to deposit dollars are at least "depositing" the cost of their electric bill. If the full 7200 coins a day got sold it'd be game over in less than 3 months.

Technomage

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Quote from: pennytrader on October 07, 2011, 10:59:10 PM

That's exactly how downtrend forms

Each previous support now becomes resistance

What all of you are stating is the obvious, this is exactly what has happened. We have been on a continuous downtrend for the mid term but as it is with all trends, they change eventually. The key indicator this time is the fact that market behaviour after the 4.18 low has been more bullish than ever since the downtrend began.

This is the reason why I think that it's very likely for the next bottom to be a trendchanging one, because the last one almost was. The support is not going to get any less, in fact the opposite will happen from this point on. As long as the long term trend holds.

As long as the long term trend holds there are many miners and investors that will be less likely to sell at current prices and the $3.x buying zone will be the biggest buying zone since the downtrend started and will most likely be so significant that it'll cause trend changing behaviour.

But we'll see.

BitMagic

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Quote from: Cluster2k on October 08, 2011, 05:58:11 AM

The interesting thing for me is, who exactly is doing the mass selling? Are newly 'mined' bitcoins being dumped? Are people who bought into the bubble and started catching falling knives in June/July/August cutting their losses? Or are we seeing early adopters who maybe bought bitcoins at 10c each thinking 'well, if I don't cash in my 10,000 bitcoins now they'll be worth $1 each by the end of the year'?

I don't buy the bitcoin bull excuse that only stolen bitcoins are driving down the market. The market has been falling since June, so unless we're seeing mass theft every couple of weeks one would think we're fresh out of stolen bitcoins to monetize.

Since every bitcoin transfer can be traced, I wonder if someone has genuine statistics on who (as a early/mid/late adopter group) sold on the way from $20 to $10, and $10 to $5.

Miners may be selling immediately as opposed to holding. Also holders from the June spike deciding to sell late. So does all of Bitcoinica's hedging to balance a strong aggregate short position. Haven't even touched big holders or early adopters.

The balance is between sellers/buyers, of course, but more importantly, sellers who sell to buyers who must buy at any price (merchants or anyone selling goods/services in BTC). This imbalanced demand is where your price drop comes from.

Cluster2k

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The interesting thing for me is, who exactly is doing the mass selling? Are newly 'mined' bitcoins being dumped? Are people who bought into the bubble and started catching falling knives in June/July/August cutting their losses? Or are we seeing early adopters who maybe bought bitcoins at 10c each thinking 'well, if I don't cash in my 10,000 bitcoins now they'll be worth $1 each by the end of the year'?

I don't buy the bitcoin bull excuse that only stolen bitcoins are driving down the market. The market has been falling since June, so unless we're seeing mass theft every couple of weeks one would think we're fresh out of stolen bitcoins to monetize.

Since every bitcoin transfer can be traced, I wonder if someone has genuine statistics on who (as a early/mid/late adopter group) sold on the way from $20 to $10, and $10 to $5.

pennytrader

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Quote from: grod on October 08, 2011, 02:43:48 AM

Quote from: pennytrader on October 07, 2011, 10:59:10 PM

That's exactly how downtrend forms

Each previous support now becomes resistance

So, you stepping up to buy at 4.1 and sell at 4.5 all next month? You know it's the right thing to do. These bulls are just begging to be milked.

I sold 45 coins at 4.6 and 5 at 4.1.

Now I have 0.5 in my wallet and I'll cointinue to sell the coins while mining them

grod

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Quote from: pennytrader on October 07, 2011, 10:59:10 PM

That's exactly how downtrend forms

Each previous support now becomes resistance

So, you stepping up to buy at 4.1 and sell at 4.5 all next month? You know it's the right thing to do. These bulls are just begging to be milked.

panerai

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BUY BUY BUY!

pennytrader

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Quote from: grod on October 07, 2011, 10:49:41 PM

Quote from: BitMagic on October 07, 2011, 07:37:37 PM

Quote from: Technomage on October 07, 2011, 06:47:38 PM

If $4.x was a buying zone before, $3.x is on another level entirely, it's buy like crazy zone. And I do plan on doing just that if I can get money in while the price stays or visits the $3.x area.

People said this all the way down. All you need is a little stability in between to get people comfortable with the "stable price". Perception is a bitch, it's not going to happen the way you predict.

Exactly this. When bitcoin was at $9, $6.58 was buy like crazy zone. When it was $6, $4.18 was a lucky buy. Let's see what happens after it lingers at $4.20 for a month before dropping into the $3s around this time next month.

I know I'm not waiting for $6 to dump, anything close to $5 and it's a selling opportunity.

That's exactly how downtrend forms

Each previous support now becomes resistance

grod

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Quote from: BitMagic on October 07, 2011, 07:37:37 PM

Quote from: Technomage on October 07, 2011, 06:47:38 PM

If $4.x was a buying zone before, $3.x is on another level entirely, it's buy like crazy zone. And I do plan on doing just that if I can get money in while the price stays or visits the $3.x area.

People said this all the way down. All you need is a little stability in between to get people comfortable with the "stable price". Perception is a bitch, it's not going to happen the way you predict.

Exactly this. When bitcoin was at $9, $6.58 was buy like crazy zone. When it was $6, $4.18 was a lucky buy. Let's see what happens after it lingers at $4.20 for a month before dropping into the $3s around this time next month.

I know I'm not waiting for $6 to dump, anything close to $5 and it's a selling opportunity.

BitMagic

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Quote from: Technomage on October 07, 2011, 06:47:38 PM

If $4.x was a buying zone before, $3.x is on another level entirely, it's buy like crazy zone. And I do plan on doing just that if I can get money in while the price stays or visits the $3.x area.

People said this all the way down. All you need is a little stability in between to get people comfortable with the "stable price". Perception is a bitch, it's not going to happen the way you predict.

teek

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Quote from: Technomage on October 07, 2011, 06:47:38 PM

I worry when the real long term trend is broken and that would require a price below $3, which I don't see happening right now. If $4.x was a buying zone before, $3.x is on another level entirely, it's buy like crazy zone. And I do plan on doing just that if I can get money in while the price stays or visits the $3.x area.

We're looking at the price bottoming at $3.x and then stabilization added with a few rallies. Then one of these rallies will break a significant barrier signaling a mid term trend change and then we might have a new rocket launching.

This is the likely scenario for now, the less likely is a doom scenario which breaks the long term trends. I see this as very unlikely because the fundamentals of Bitcoin are simply not weak enough for that.

+1

Technomage

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I worry when the real long term trend is broken and that would require a price below $3, which I don't see happening right now. If $4.x was a buying zone before, $3.x is on another level entirely, it's buy like crazy zone. And I do plan on doing just that if I can get money in while the price stays or visits the $3.x area.

We're looking at the price bottoming at $3.x and then stabilization added with a few rallies. Then one of these rallies will break a significant barrier signaling a mid term trend change and then we might have a new rocket launching.

This is the likely scenario for now, the less likely is a doom scenario which breaks the long term trends. I see this as very unlikely because the fundamentals of Bitcoin are simply not weak enough for that.

dark_silverstar

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look's like the price still down under 5 until next month Cry

Technomage

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I think people have different definitions for timeframes. For me a 3 month period is not a long term period, long term is one year at least. 6 months is something I consider a semi long term period, but 3 months is definitely not long.

This is to clarify that when we talk about long term trends, drawing a line from the peak is absolutely ridiculous. That's more of an extended mid term trend, which is currently bottoming. That's actually what S3052 called in his last analysis (Mid term: DOWN / BOTTOMING). He did miss on the short term though, but the long term and mid term is right on.

And for most of us those are more important than the short term anyway.

Nagle

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Quote from: grod on October 07, 2011, 04:26:49 PM

Quote from: teek on October 07, 2011, 04:12:40 PM

Quote from: zby on October 07, 2011, 04:10:38 PM

I don't quite believed in the long term trend - but many do and that line was for sure broken now.

long term trend isn't broken until $2.80 is broken..

He's talking about the S8675309's charting. That one clearly calls out a short and medium term support above where we're trading now, and it seems like the guy has a bunch of followers. Disciples that utterly ignored the bearish macd divergence staring them right in the face to treat a not-yet materialized reversal pattern as a sign to buy hard.

Oh, that guy.

The long term trend since the bubble popped looks like this:

Bitcoin, last 3 months, with 30 day trailing moving average.

Now that's a trend, not wishful thinking and fantasy line drawing.

Mousepotato

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Seal Cub Clubbing Club

Come on 8XX,000 difficulty!

grod

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Quote from: teek on October 07, 2011, 04:12:40 PM

Quote from: zby on October 07, 2011, 04:10:38 PM

I don't quite believed in the long term trend - but many do and that line was for sure broken now.

long term trend isn't broken until $2.80 is broken..

He's talking about the S8675309's charting. That one clearly calls out a short and medium term support above where we're trading now, and it seems like the guy has a bunch of followers. Disciples that utterly ignored the bearish macd divergence staring them right in the face to treat a not-yet materialized reversal pattern as a sign to buy hard.

teek

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Quote from: zby on October 07, 2011, 04:10:38 PM

I don't quite believed in the long term trend - but many do and that line was for sure broken now.

long term trend isn't broken until $2.80 is broken..

wobber

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Give it 2 hours. Everybody is excited right now. It will go down again, no need to struggle.

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