Topic: Will BTCUSD break the long term trend? - page 2. (Read 4441 times)

This is true but I think this scenario is very unlikely. It would require for the price to drop 50% really fast and then stay there for weeks. From the current price, that is. Because mining is still barely profitable for most, with a 50% drop it would become not profitable for most people and then we'd see massive difficulty drops and a big network slowdown. But only if the price stays there.

Much more likely is that the price drops slowly and the difficulty drops with it, and when the price starts going up again the difficulty starts going up as well.

The changes don't happen in days - with normal operation the 2000 blokcs take about two weeks, but if people stop mining - then the change will take longer.  The problem is that if the hashing power drops massively then there will be a long time during which sending bitcoins will be slow.  Not much commerce is going on in bitcoins now - so it is hard to say how much such a speed drop would affect the businesses - but it certainly would further reduce the confidence in the system.

That's your stance.  You wouldn't be mining if you expected bitcoin prices to tank, which means since you ARE mining you're bullish on bitcoins prospects.   Ditto 90% of the bitcoin community.

Also, the number of people mining DOES have an effect on the price.  Do you for a minute think $5 would be a "bottom" if difficulty hit 500k?  I know I'd be willing to sell coins for $1.50 at that point.   As soon as BTC get cheap enough that it's not profitable to mine at 1.7 million difficulty at even at 4.6c/kwhr (my rate) you won't see a 5% drop, you will see massive swings in difficulty every 2016 blocks.  500k for 3 days, 2 million for two months.  Repeat.

$6 is the new $9.  Which was the new $11.50.  Which was the new $13.  Which was the new... Well, you get the picture.

Agreed, I'm feeling myself chill out as I've watching bitcoin hover in the $5 range the past week. It's hard to get worked up about small price movements because it just feels like prices are at or near the bottom, and I don't want to get left behind when it does, finally, go up a $1 or $2.  So though I was tempted for like 5 seconds to sell my holdings and re-buy at $4.50, it might never go to $4.50, and so I'm holding.

Well, for one I disagree that it has any relevance whatsoever how many miners are still mining, as far as the price is concerned. I mine because it's still profitable to do so. It would require at least a months worth of mining at break even and then a few weeks without profit before I'd actually stop mining. Even then I'd just put my rigs on vacation for a while and wait a month or two before actually selling them. For fiat money. The amount of BTC sold increases because of this by exactly 0 BTC.

As far as speculating on the true bottom, even if your scenario is correct I don't really care. If one is mainly a long-term investor, like me, it's entirely irrelevant if the price drops to $0.1 next week, as long as it's up eventually, even if it takes years. Of course you can argue that I could have made "so much more" by working the market, but working the market and succeeding in it is not free money. It requires time, effort and knowledge. It's not free. As a long-term investor, if I think the long-term future is good, which I still do, then I can just chill out and let it play out.

I did worry a lot more before but recently I've just thought about what Bitcoin is and figured out that it doesn't really matter what the day-to-day, week-to-week or even month-to-month price is. As long as the long term is good I'm just happy to be in, that's it. I can spend my time much more productively by developing the Bitcoin economy than working the market.

I've made a few trading moves and probably will make some in the future if I smell a really clear trend, but right now I see no clear trends and am just chilling out and letting it play out, one way or another.

No, it's not a smart gamble.  The far smarter gamble is to go along with the trend.  Deposit money you'd use to buy bitcoins and wait until capitulation.   We're still in denial phase of post-bubble psych, when the fear kicks in it'll be time to start looking harder at buying.   When the last bitcoin bulls start throwing in towels is when you buy with half your funds.   Sell half into the post-apocalyptic dead cat bounce, buy again a bit later and THEN hold and accumulate if there's an uptrend.

We're still at near the peaks of hashing power on deepbit.  That means most of the community is still bullish, even if some are mining at a loss vs buying.  There is little to no bear sentiment as prices decline, let alone fear.  That's exactly what you see immediately before a penny stock post-bubble panic.

"I'm in it for the long term no matter what" bagholders are few and far between when you look at successful investors and traders.  Bottom fishing is an artform, and isn't as simple as catching every knife that drops.

Looks like what you get with pylab/matplotlib, in particular the imshow function.

http://matplotlib.sourceforge.net/users/image_tutorial.html#applying-pseudocolor-schemes-to-image-plots

At these prices the difficulty will continue to decrease, slowly but surely. At least for a while.

Anyway, I do think the long term is still good. The price hasn't even stabilized under $5, which would still not be a disaster. Only when the price stabilizes under $4 will I be really worried.

Now, from a long term perspective, it's a good time to buy. It's not guaranteed Bitcoin will succeed so it's a gamble, but it's a smart gamble taking into account everything Bitcoin has potential to do.

I understand what you mean. The highest total hashing rate I remember was around 18 Thash, now it's around 12.

For me, I don't have any immediate need to cash out. Surely, there must be some people who over leveraged themselves (maybe even on credit).

I asked my wife what she would do and she would say, if you think it's worth investing in it, do it over the long run.

The whole ~15% decrease in the last ~2 months Haven't been around that long myself (and have done my best to refrain from my useless posting, not saying yours was) but I remember when a 5850 made 3 btc a day. Just 9 months ago one could mine a whole block by them self every other day on a quad core cpu. Who says btc hasn't grown rapidly?

I'm looking forward to the extra coinage due to the difficulty fall

Now nominating ElectricMucus as our official manipulator.

The trend line is strong with this one. However if it's strength is broken I must agree it's possibly the last psychological barrier before absolute panic.

 *ElectricMucus I feel the same way as you and have "faith" Bitcoins long term trend won't be broken but may the USD protect us all should it fail.

price / volume heat map??

I like these heat maps. how did you make it?

because that is when the data I have from mtgox starts

I didn't ask about 2009. 


A trend is relevant when it contains relevant data.  To most people, data from 2010 isn't relevant as they didn't mine and didn't purchase bitcoins during that time.  There would be relatively few people with large holdings of bitcoins purchased or mined at cents per bitcoin.

You know what they say about statistics and lies.  It's possible to make almost anything look good.  I have yet to see someone quote a share's price on a log graph to show price trends.

Where is another graph which includes the prices in 2009?

But after which date do you think a trend is relevant?

Price, Popularity and Difficulty are of course all related in some fashion. However not trivial way, it's like those hunter/pray population graphs only with more parameters. One might say that difficulty follows prices as well as popularity while popularity affects the product of both. It's a non-linear feedback model and to get a better estimate of what we might see in the future we would need to find the right model along with the parameters.


@fivebells
This isn't my work I found this somewhere on the forums but find it quite useful:
http://sd-12155.dedibox.fr/~joel/btc/mtgox2.png

But thanks, I always wondered how this was made, it seems you have figured it out for me  

Um, what are we looking at here, exactly?

(BTW, I love pylab.imshow, too.  It makes beautiful pictures.  Do you like this pretty graph I made recently?)

Why does the graph start in August 2010, when hardly anyone was using bitcoins and very few people even knew about them?  Why not start the graph in March or April 2011 when things really got going and bitcoins became popular?  August 2010 is an arbitrary date designed to make the long term trend look great.  Never mind that 80% fall in the middle.

Well, I think not.
How much cash would one need to seriously change the market, at 72k peak volume that would be 300k USD @ 4.18. That is just one day...
What you call long time downward trend I call mid term correction...

PS: This rhetoric reminds me of gold around 2008, there was this big push that the bull market were over, and all it did was stalling for a few months. Just wait a few weeks and we will see the same thing now, at the double price   (Just a different scale in the case of gold it were the 'big players' as with bitcoin it are people with 'some cash')
I suspect a similar development with bitcoin, while here in addition it might even make mining profitable in the long run again

Then why are you unable to predict the price?