Topic: Why I think we may get a BIG crash before $500 (and then rise *much* higher) (Read 3360 times)

But the second part was depended on pevious crash.
How can you be right here ? 

Correct. My understanding of the natural adoption curves of new technologies is that during the adoption phase (which we are in now and will continue to be in for quite some time) they follow an exponential valuation with lots of superimposed noise i.e. volatility, but that the volatility decreases with time. The peak of 33 in 2011 was at least an order of magnitude over the expected value (based on a post-hoc trend analysis). The April 2013 peak was only around 4 x the expected value of the time. The current valuation based on trend analysis should be about $245, which means that at $530, we are a little over double the expected valuation. IOW, we could still go up to about 1000 (4x expected value) before matching the volatility of April, and still not be anywhere close to the volatility of 2011.

Probably because they can't log on due to chinese sensorship

What doesn't happen at the same time though is 500goxdollars and 500 other dollars. Bitstamp hasn't broken thorugh yet.

Very pleased to publicly admit my prediction was wrong

At least the first part (about the crash). Still 100% confident about the 'rise much higher' part.

I'm saying it resembles April and 2011 because:

- rates have been going up incredibly fast recently, which makes lots of people nervous
- market is still greatly driven by greed, rather than understanding and appreciation of Bitcoin for what is actually is
- sentiment, human psychology, and desire of making tons of money (that is, USD, CNY, and EUR) is what dictates the rate

Lots of people have made TONS of profits during the last few weeks (also newbies who are vulnerable to emotional decisions) and there's absolutely no reason why the 'oh no, i knew it was too good to be true' mentality that you mention, wouldn't show up again on a short price drop, possibly causing a panic avalanche.

Don't get me wrong, I regret this, as it doesn't do justice to the brilliant innovative revolutionary technology that is Bitcoin. But I'm afraid it's a realistic scenario nonetheless.

I hope there is a correction with some consolidation. Gives more buyers confidence that they won't lose all their money, so perceived risk is reduced. I'm sure there is some big money watching these patterns closely.

Also,  I'd  like more coins please...

Based on what? Not saying it can't happen, but I have yet to see statements like this backed up by... well, anything of substance. Honestly just seems like paranoia to me.

I don't profess to know what will happen, anymore than the next man. And while i disagree with some peoples opinions, i mostly still hold that they are valid, and people are entitled to them.

But again and again i keep seeing people referring to earlier bubbles and crashes.

I cannot for the life of me see how the current situation can be compared properly to any previous bubble (i'm also getting pretty sick of that word!) or crash (and that one!)

Aren't the causes and reasons different in all cases?? Aren't we into new territory now?? I just don't see how we can say xy&z will happen.. because in 2011 ab&c happened and in April de&f happened.

I don't know the reason for any other bubble and crash apart from April '13 - when there was hype over a rapidly rising price.. a speculative bubble formed.. people wanted in on this.

And the one main exchange Mt.Gox couldn't handle all the traffic. It lagged (badly) people believed it was being hacked.. and panicked. The 'oh no, i knew it was too good to be true' mentality kicked in, the price dropped, people panicked and a massive sell off occurred. That is all. Gox crumbled to the point of unresponsiveness, and already twitchy investors dumped as fast as they could.

Who is to say where we would be now if gox could have handled it. Would $266 have been the top?? Who knows.

All i'm saying is, this can't repeat itself. The market is more evenly spread out / balanced between more exchanges.

So, how can this be 'just like April.. or exactly like 2011'... it's not!! It's November '13

You're saying btc is just going to go straight up without any major corrections? Look at the previous bubbles: that doesn't happen - there are always corrections that hit the daily ema. There is a big difference between a news driven panic sale, and a new 3B of market cap that needs to be redistributed.

if SR fiasco did nothing to the price i doubt it will go down. 50% chance it shoots up at the same crazy rate

Possibilities:

$370: Short daily ema + wall on gox - small correction

$300: Long daily ema + larger depth on gox: -large correction

$230: October trendline + 3d ema + gigantic depth on gox - full crash

And leave $3 in profit on the table? $529.98  (not .99 so I can get ahead of all of those suckers)

Sure, I think 80% is exaggerated (we won't see double digit rates anymore for sure) but I'm afraid it'll be significantly more than just a "correction".

ye that's my impression as well.. a 80% crash seems so unlikely, last weekend buy-support came in after 25-30% drop if I'm right.

im ready

I don't think that equation works. I assume you calculated 0.25 in your equation from 0.5/2. So if we were (hypothetically) talking about a bubble in June 2013, which would be 2 months past the 266 peak instead of 6 months, you would calculate (266/32 * 0.0833 ) * 266 = $184, A bubble one month after the 266 would be $92, half a month after would be $46, etc. These numbers wouldn't make sense.

Wouldn't you want to model using an exponential? Like this:
Peak = 32 * (266/32) ^ (T/2) = 32 * 8.3125 ^ (T/2)
where T = the time in years from the 32 peak, so if I check my math we have:
at T=0, peak = 32;
at T=2, Peak = 32 * 8.3125 = 266;
and at T=2.5, peak equals, ummm, 2.5/2 = 1.25 so let me plug 32 * 8.3125 ^ 1.25 into google and I get, ummm, ....

451.66!!! OMG gox is at 440, THE CRASH IS IMMINENT!!!

lol ....

It is very interesting that 500 USD ~= 3000 CNY. Definitely agree with this analysis. Should be interesting at that point.

Not crash. It will be yet another BEAR TRAP and it will last a day if not just hours. I won't even sell for speculation as it will be real risk to be trapped with all the bears.