Topic: Where do you think we are in the bubble? (Read 10129 times)

Where are we again?
 

I do sell, have been selling these last days.

However, I also like the idea of Bitcoin. Were it other forces driving the price up, I might have continued holding the same amount. This is why I have to find some optimum amount I still want to keep -- which takes time and analysis I might as well post. I see a small but real probability price does jump very high, through a large bubble or reaching critical mass. I'm not sure though whether the former is more help or hindrance to the latter, since I don't think hoarders contribute much to synergy effects, while they do contribute to price instability.

Should it keep going in the same fashion, in effect I'll have to do as you said and leave with at least the funds from the sales. I don't change my mind fast enough to buy back at such rapidly rising prices.

Then again, I'm reluctant to move out for another reason. This kind of (to me) uncomfortable up-spikes happened three times already and each time it just cooled off, crashed or busted and gave me some extra profit plus an opening to buy back in. In two of the cases I even ended up with more Bitcoins than before plus profit; in the third with a sizable profit. Even the worst of these turned out a good deal compared to other options.

Remember that last time we had speculation mania of this size, price crashed to the 16th fraction of the peak, at less BTC in circulation than today! Even if the market grew by a factor 4 since then and better traders cancel out the effect of minting, there's a real chance for a bust. From my perspective, the hype does not increase my personal valuation of Bitcoin by more than a factor 4, and I feel I lack diversification since the price hike. So the natural choice for me is to ponder on Kelly's Criterion to determine with what fraction of my coins I should bet on a crash.

Also, I'm not a speculator with a long history and interested in how well I can do. So short-term speculation is interesting, even with less remaining coins. There has to be money in the game to make a real benchmark. Otherwise it's way too easy to cheat on yourself.



So, uh... I guess the discomfort is mostly when I have to make a tough call on an amount that matters to me. I'm not rich, so the price hikes made Bitcoin more than a small game for me. (Which is also a reason to diversify)

(And I'm a little attached to the community. Have been doing funky stuff and crazy deals with various people, totally walking off would be hard either way. )

Just out of curiosity, then why don't you sell and find another market you feel more comfortable with?

Even as a declared TA-naysayer, I agree on this one. "Technical Analysis" comes from historic observations of the early markets. Thus, a public horde gaining control should increase its effectiveness, possibly to the level where it's a significant indicator.

If trends this long were likely, methods like Goomboo's turtling would be incredibly effective. (It was effective enough as is. I found it hilarious how this guy fed on trend-followers.)

Another perspective is the statistical one. Look at future price as a probability distribution function and take the first three moments: expectation value, variance, and skew. For a trader, the expectation value determines which way to trade, the higher moments the risk analysis and thereby the height of the wager. We see that trends exist and are strongly linked with skew. But a strong link from skew to expectation value would be a grave inefficiency that can be exploited. (Unless variance and skew are so extreme that your risk analysis can't take it. But not even Bitcoin is that crazy in the short-term. )

Therefore, either there is a simple get-rich-method, or the trend does not have a strong link to expectation value. In other words, trend length scales up a number like (crash probability * severity).



What I'm doing here is chartism and therefore a bit crazy in itself. Of course, there is always a chance external factors cause the unlikely to happen. But it does show that we have a high amount traders using nonsensical tactics. "It seems to be going up" is not an argument to speculate on rising prices. Not a supporting point, not valid at all. It makes me nervous to be part of a market in which the main price-driver may be nonsense.

To infinity and beyond, that is sort of how I feel about it since I brought in June 11. My confidence is growing, I even got my teeth whitened this week thanks to Bitcoin.

The contributor says:

That's a lot of light read. Plus the amount of transactions correlates a lot with growth of services doing very small transactions such as SatoshiDice, and the profit volume they eat out of peoples hand is not enough to justify the huge demand for Bitcoins. It's mostly back and forth transaction, not true change of hands.

Plus in the about section:

That the article is on Forbes matters not. That's an author that does not appear to have economics background and seems specialized in edge technology. But we're still nowhere near attracting any kind of big money. Bitcoin has not enough use and is not stable enough yet for large investors to feel safe putting in large amounts.

We're still in the beggining... that's just stellar news, we don't have any kind of mainstream press. Bitcoin is just an obscure new thing among tons of new technologies investors are not ready to invest in yet.

Sure, in the long term, I believe Bitcoins will be more valued than they are now. But the current price... I'm ~90% sure it's a bubble. I could be wrong, but I'd bet strongly on the price crashing down hard in the near future.

Really? http://www.forbes.com/sites/timothylee/2013/02/14/why-i-dont-think-bitcoins-big-price-rise-is-another-bubble/

Somehow it looks like we are in media attention phase. I haven't seen any significant news articles mainly focussing the bitcoin price yet. Besides the slope is still not as steep as during the 2011 bubble. I think we'll see a final spike to about 40-50.

Eh, I didn't notice this thread. I had posted this in another. I think we're around greed and possibly reaching delusion.

not obsessed. candlestick patterns aren't very rigorous anyway, regardless of the possibilities of manipulation. but as you can see earlier in the year red candles pattern in a fairly consistent way. if a drop isn't timed properly to produce a red candle, it usually means the price didn't stay low enough long enough to be considered an actual correction. and we seem way overdue for one. that is all i meant to suggest.

I'd say it's purely arbitrary. If the v-shape reversal yesterday had happened near the Saturday midnight, we would have a short weekly red candle, followed by a long green candle. It's just not happened on the right time and it could be easily manipulated.

Don't be too obsessed to these candles and indexes.

we haven't seen a red candle in almost two months. so... how about now?

Ha, I was earlier trying to remember in which thread we'd had this discussion in order to come back take my hat off to you in respect for your prediction

I did mention on the wall thread that the 5k buy that looks it like triggered this rally could be because someone needed the bitcoin for a 1m purchace of S.DICE.  However, as much as I like to find a way of fitting what's happened into what I was saying I'd have to conclude I'm verging into wild speculation if I'm going to explain why the raise

It seems my intuition had some merit.

now look at them go

I don't think we're in disagreement about the mechanics of a bubble.  It's the chances of a bubble trigger happening without new money I'm doubtful about.  There is of course plenty of money on the bid side to take the price sky high but unless something changes I don't see why people would respond with a panic buy to someone taking the price up a bit.  It might not necessarily be the new money that triggers a bubble but because we don't know how much and when new money arrives when the Japanese banks are open there's more reason to fear a new big fish making the opening price history.  As a consequence even though bidders would rather not buy at or higher than current ask I think they're more likely to keep the finger over the mouse click should their fears materialise.  Bid orders are where they are because people don't really want to pay current ask prices (or above) so if everybody understands weekend buying is only really necessary to obtain immediately required BTC (and later on to anticipate Monday) then nobody needs to panic.

Simple, people removing their asks.
A bubble is not created by additional demand but by skewing of the existing demand. That's also why they pop because after the bids run into the remaining asks after the peak the removed asks run into the remaining bids.

Again I may be wrong that it starts now, but I am certain that this behavior occurs when we have our bubble.

I know there's a lot of ask orders hoping the price will drop so they can get (back) in.  However I fail to see what could trigger a panic buy if there's no lumps of new money happy to pay current price and start the push up.  On the other hand I still think there's quite a lot more on the ask side than shows.  Most of the big dumps that cause dips or temporarily halt the upward trend come from off-book.  They tend not to show their hand until they're ready to play.  That's my take anyway.

See all those buy orders? They will panic which starts the bubble.

On a Saturday without any new money on MtGox to fuel it? Just askin

It's just intuition honestly. I'm not certain of it but I think 20% should be possible in a day.

Link?

Bubble should start tomorrow.

To pot this in perspective here is a long time silver chart.


If any silver is the best comparison since it's volitale price range, commodity function and finite base.

I know you are illustrating the point corresponding to that chart, but saying that $32 was the new paradigm is a bit of a joke. That entire bubble only lasted a few days.

Right now, based on that chart, I would say that we are in the media attention phase of growth (though in the case of bitcoin a more accurate description would be "appropriate merchant adoption").

Zoom in on the 2011 bubble. First selloff; mid/end may, Return to normal; mid june.  





Jan 31 - Feb 2 was a pretty significant selloff, around 3 and a half dollars (setting the "denial" phase).




Pulling back, I think we may now be bordering on the "fear" stage.  If my suspicions are correct, it will be an interesting couple of months....



*chart updates automatically

I agree with you on these points, but where exactly do you see "first sell off" in the first bubble?   Or the "return to normal"?  Imho, any point you pick for these are quite arbitrary. 


How are we in the bull trap/return to normal area if we haven't even had a significant sell-off in the new "bubble" ?  Don't get me wrong, I think we will get another decent sell-off, and we have risen quite a bit, but I don't think we are there yet.


+1, although the fundamentals need to stay good for this to happen of course.

It's just like a fractal. The pattern will repeat itself in different scale. In short-term (1-2 year), the first bubble was a full cycle. In medium-term (3-5 year), it was just a bear trap. In long-term (6-10 year), it was just a glitch in the take off period.

If you think that the first bubble and the chart aren't "even remotely similar", than you are obviously blind, delusional, or just lying to yourself.  Its that lack of awareness that's going to leave you holding the bag by buying at the top of this bubble, just like those fools that bought at $32.

You conveniently ignore the fact that on this chart above "despair" is quite below "first sell off", while on the real chart we never went below "first sellof" which was at $1.1 - so no, not even remotely similar, unless you want to see things which aren't there.

$32 was a black swan, an external event that made Bitcoin look unsafe for a store of value. There would have been a natural first top followed by a decline and a recovery.

The timing of  $32 as a peak was premature and set everything back a year. What we are seeing now is a reenactment of the public mania phase. where we are exactly on this leg is hard to say.

Uhh, no? But when the BTC chart mirrors the sentiment chart almost perfectly in the past (seriously, the first bubble is almost a carbon copy), and the pattern starts to repeat itself (as it is starting to now) the chart is more than fitting.

I actually hold AAPL, and yes, I believe it is in a bubble now as well (one on the vegre of collapse IMO).  However, I bought it during the 08 crash, so even if the stock collapses I can still sell for a profit, though obviously I would prefer a recovery.  




I agree.

$32 was "the new paradigm", $2 was "dispair", $5 was return to the mean. We are now seeing a repeat of the same pattern.

I'd say it is the very beginning of the stealth phase and the "take off" has not yet happened.

The argument for this claim is rather simple. Institutional investors have not even dipped their feet into Bitcoin. Do not mix "media attention" to Bitcoin as investment to "media attention" to Bitcoin as a fringe technological and monetary curiosity. Some especially smart and reckless VC's have just started to push some pitiful amounts of money into Bitcoin economy which is by definition "stealth phase".

Therefore, if we accept the wisdom of the classic chart above we are in smart money/stealth phase.

Are we going to get a Super Bowl dip tonight?

So, anyway, seems pretty obvious.  We're in the bull trap/return to normal area.

Do you really compare every commodity or stock chart to that schematic?  For christ sake, it's a nice consensus for human emotions at various moments, but reality is quite a bit more complex than this....   I can only imagine how often you would have thought that we were in a bull trap in the earlier phases of apple (not that I am an apple fan).

Sorry evolve to burst your bubble, but there is no "Jan 2013 dip". We've seen couple of sells which were bought out immediately, it is still in a steady growth. It is a very healthy sign that any acceleration (which could lead to bubble) is quickly corrected with sells. But there have been no panic selling, only steady growth. You imagine a dip when looking at 5-minute candles, but bitcoin is too volatile for that. Look at dailys.

In the very long run, the $32 peak is "first sell off", and the $2 dip is the "bear trap". Many early adoptors left because of the bear trap (e.g. the "Bitcoin will never reach $20 again") . We are stilling recovering from the bear trap, not even have any real media attention

Could we be seeing the "Bull Trap" now? (jan 2013 dip)

interesting that there's an obvious straight line through that log chart. even the big bubble of 2011 just corrected to that line and then bitcoin continued ascent. very interesting.

Bye, bye, fiat!



Hello, Bitcoin!

I think I'm gonna buy.

haha i like the graph. acceptance that bitcoin's goin uppp

 Typical reactions on hearing your diagnosis or that of a loved are:

    Feeling numb
    Unable to express emotion
    Anger
    Wanting more information
    Unable to take in information
    Shock
    Wanting to talk things over
    Denial
    Grief
    Fear
    Depression

However, there is a typical emotional process that most people with a terminal illness go through. In 1969, Elisabeth Kubler-Ross identified the stages of death and dying in her book ‘On Death and Dying’. The basic five stages are:

Denial - I can’t be dying.

Anger - Why me? I don't deserve to have this disease.

Bargaining - If I am good or if I give up x, then maybe I will live longer.

Depression - What is the point of carrying on?.

Acceptance - OK, I know I’m dying but I’m prepared.

of course not. but you should certainly not sell at the bottom of the first leg of a correction. wait for a bounce, and a second top for the (lower) high.

and if you're daytrading, which could be very profitable during these times of volatility, you should buy at the microterm bottoms like the $18.00 low, again to sell at the next top before we go downside for good 

it would be hilarious if i was so terrible at analysis that i switched camps right when we've finally topped off...

I agree that is a reasonable target range, although I think (or maybe just hope) we will be a $20 long enough to pick up a few more BTC.

Ah, but we have a longer history to put on those log charts, and doesn't it look nice, the curve is smoothing out, to me it looks like the price will stabilize somewhere between 30-100 USD per BTC.

yes, this is what i try to do with cycle theory; it allows one to anticipate or time the turns.  its not always easy.

so you're in the bull camp now?

Been there, done that.  Log charts were all the rage in 2011.

I know, I just wanted everyone to crash the market so I could clean up

I made 2 BTC on shorting that "bounce" 

+1 we've already bounced. gotta anticipate market movements, not react to them. unless you want to be a bag holder.

SELL SELL SELL!!!

+1

Me too

For at least 6 month... I'm buying BTC with all availlable spare money, in the familly budget, after food it's written Bitcoin

ETC ETC = A big online gabling site is about to accept BTC, like WorldPress did.. You can now buy BTC in wallmarts, 7/11, etc..  numbers of btc-willing merchant online/offline are now doubling every few month..  halving happened, network hashing power will soar, ASIC are now fact..  peoples are more and more bored of tha banking system,..  more and more peoples are being abused of the Govt way to manage funds, taxes, unemployement numbers are cheated, CPI is way too much cheated !   Real "common" folks began to awake about all this too much faked economy..  BTC are almost unknown today !  Let see the demand in few years !  ETC ETC ETC.

People do not panic buy in a bubble (unless they're shorting, which isn't the case with bitcoin).  Never have, never will.  They only panic sell.  The buying part involves hubris and arrogance, the looking at exponential growth in charts and thinking it can only go up from here.  There's no panic involved, just greed.

The 'panic buy' meme comes from those who are already invested and want others to push the price higher.

+1

All Data Log



No bubble here..

Look, swings already get a lot milder, I dont see an overshoot yet...

I'm a bit desperate, when do the BTC community will understand that log (%) scale charts are much more appropriate !  o.O

Before block reward, miners had twice the amount of BTC to sell.. Now that half is generated, this put a significant upward presure..

Before halving, most big sell pushing down were from miner.. those big sell are halve ...  Look at the chart since the halving.. it's obvious..

Ok, investor/speculator have tought about the incomming halving.. but IMO, this halving had remove half of the downward presure.

A miner should sell the same % of mined coin, before and after the halving.   It's in %.. Like all those nice chart that are paste here and there, all are in unit... they sould be in % (log)..  Much more realistic..

Everyone calling for a bubble, should look in the % (Log) chart for a more realistic, mathematic, investor POV !

Log scale should be the norm... not unit scale !

Heh. I'm glad people think that was a bubble. I am buying all the bitcoin I can as fast as I can, and will until I no longer need to.

There was a 3millionUSD red volume bar at 17 and the price broke UP. Comparing the bitcoin market of today and the market of a year ago is pointless. The price is not set by the past, and moreover, even if one wished to draw a "trend", the fundamentals are way different. The network has survived examination by a cadre of nerds and hackers. A gambling site profited 400,000USD in 1 month with AN OVERHEAD OF $1200, a drug bazzar operates openly on the darknet. ETC ETC ETC.

Oh, that bubble. Yes the viability of Bitcoin itself was in question as if the whole thing was a fad.

I could agree with many of the things you said, but what I think we should really be aware of is that when the people on this forum talk about "Bubble", what they most likely have somewhere in their minds a specific phenomenon they have seen before, thus I think it is worth pointing out the difference between what we are seeing now and "that" phenomenon.

You are right in the sense that the only panic buying of the latest, was from Gox Dollar accounts plus some additional 10-15% new cash.

However there are wallets out there with people that mined a little or much in 2009-2010, and they might feel it is worth while to register with Gox now and collect!

The sideways periods are a good detector for old coins going into circulation, so if we stay at around 20 for a week or three, I will consider your assumption right.

What you describe is a hype bubble, but all bubbles are, when they start to decline the asset was overvalued i.e. an unfunded hype.

I'm not saying that the price now is unsustainable or that we are going to see a crash soon, just that it will go down again. The cycle lows are usually a better indicator of support than the peaks.

In a bubble people will buy out of panic, there is not enough panic in the market yet--nothing close to what we had last time. People are still buying quite cautiously, and many are buying to spend, many are dumping, usually in huge amount, no single day long green candle yet, if this is a bubble, then perhaps all great long-term price rises should be classified as bubbles as well. I am not saying that the price would not go down, I just don't think it's a bubble-not yet.

I can't help myself being amused by some of the replys in this thread.

Bitcoin, as an oposition to the manipulated markets, wrecked by the banks, should at least make people think about the psycology of speculation.

Ofcause this is a bubble! The question is when we have seen the apex of it!

In the beginning of the slope:









from:  The Autodesk File - (1994) - by founder and former CEO John Walker

We may not have entered the bubble phase yet, as long as we get a correction every two days. In a bubble there would be nearly no correction until the busting.

the effects of the rewards being halved were bought into the system long before it happened, this is why we left the 5 dollar zone.

I don't know if we've reached the first selloff........or if that was the $14 13 range

+1 that; BTC finds actual market price via wild swings. Hopefully, these swings would get milder with time, but for now we'll definitely overshoot.

As long as Ben do not tighten, exchange price will rise

If the past is any indicator of how this market works, that leveling off will occur by overshooting the level-off point by a large margin, then undershooting it by a large margin, then bouncing around a few times before quieting down.

We knew it happened, but did we realize the effects? Did we know what to feel? I don't think we can until it's happened at least once (this last drop). Next time it'll be factored in more tightly, as in it won't have such a lagged cause-effect reaction.

? We all knew the block reward was coming.  Its not like everyone is just realizing it.

Charts are great - but we aren't in a bubble here - This is the expected result of the block reward halving should level off at some point soon (between 24 and 30).

Are you predicting a rise to 80 - 100 USD before the bear market, because that is what this chart comparison seems to indicate?

I'm not really interested in a Futures Contract, but there is probably a good market for them here....try the goods and services subforum, you might get some bites there.

I'm in and out of the market in time to catch a crash with negligible profit losses (I stay in usd most of time) so a Futures contract wont benefit me much and doesn't mesh with my trading strategy, as I see no need to hedge.

evolve is short
thats all

charts are charts
lots of them can be made
market is market
market is always right

and your behaviour can be influenced by charts

I agree our community is at greed/enthusiasm, but the rest of the world has never heard of a bitcoin, so I would put them somewhere around the middle of "stealth phase".

Our little community is at greed/enthusiasm, but the rest of the world is lagging slightly behind at media attention

Just saying you are missing an important detail in this chart. I'll not tell you what it is so to not to ruin the surprise.

I think we are a little bit left of "takeoff".

after this bitcoin did one last dip under 1$ and then things got nuts.

will the same happen with 20$? Stay tune!

Would you be interested in a deal where you buy the right to sell coins to me for $8 each at the end of the year? I'm willing to denominate this in gold too and we can settle with coin if we both want or I can ship.

"Media attention" phase methinks. Not sure but I think the overall sentiment is very similar to what it was around late April/early May 2011. Many people were still expecting the return back to sub-$1 prices.

This time, I think highest we might go could be bit over $100, likely much lower though. The correction will be huge, of course.

I don't care where we are in the bubble anymore.

I have neutralized my initial investment, and I can hold my Bitcoins through whatever comes.

Sorry we already passed that chart two years ago. Wandering into uncharted territory to the right now...

It only measures at 1.7% because the excess isn't going in to food much yet. Is there a bitcoin in their basket?

If this is a bubble, I think the farthest we are is just past the "media attention" elbow. That happened a few days ago (the Chart of the Day article - our Forbes blogger doesn't count).

Then again, this might just be a rally - in which case, sure, there'll be a correction, but it probably won't follow your chart.

We are getting close to the transition between Stealth phase and Awareness phase. Ready for take off

Inflation rate in jan was 1.7%  (which is low)

Mining is only done by a subsection of the community (and increasingly less as the arms race builds with asics and beyond) so block rewards have negligible effect on the price IMO. (as a speculator, the block reward has no bearing on how I trade)


I think the bubble began when we broke double digits.  I also think the stagnancy at $5 happened for a reason, and we will be back there by the years end.

-Bernanke doubled down on money printing last December
-the block reward dropped to 25 BTC per coin

The value of coins was ~11-12 USD in December - based on that we'll need to get to ~$40 before a new bubble even starts.

Well we just had media attention a couple days ago hahah.

I'm thinking somewhere between "greed" and "delusion"....