Calculating bitcoin's book value (includes joyrides of both the metaphorical and real kind  )

https://bitcointalk.org/index.php?topic=970687.msg10610212#msg10610212

Bitcoin now crossing the boundary into the fabled Gox Resistance Field GORF.

3rd attempt at penetration.

Referring to my post of earlier today which observed the 2 previous attempts at breaking through the resistance level I called the "Gox Resistance Field", I did a bit more research on the state of the market at those two points in comparison to where we're at now.

What's interesting is that on the two previous attempts, the market showed signs of exhaustion on multiple indicators at once.

However, on this current (3rd) attempt, all those same indicators are coiled into a much more favourable state. Momentum is with us, Relative strength index is in a buyable range (for the first time), volume growth is positive, steady and not overcooked.

Could be interesting. For example, the 3-Day MACD will cross in about 10-20 days at current projections. (Much faster if there's an early rally and slower if we go horizontal). The market can go up and down between now and then but in general there looks to be much more buoyancy in reserve. Exactly what's needed to successfully traverse the fabled and perilous Gox Resistance Field (GORF).

Bitcoin/USD 3-Day chart.

Warming up main engines.

Well, anything can happen. I'm just the messenger of some arbitrary chart observations.

If it was me, I would not be opening any shorts right now. We are in the middle of a 4-hour chart correction. Those usually take from a few days to a week to complete, but we're nearly a day into it and the price only dipped by $10 and has started turning around.

Lets take a look at the On Balance Volume which is more of a leading indicator than the MACD:



Notice the OBV is in DISAGREEMENT with the correction profile. That is not exactly ideal for shorters. It often means that there is compressed bullishness in the market waiting for release like a coiled spring. To me that OBV simply looks very bullish and further endorses my observation above about the 4-hour correction indicated by the MACD histogram being only minimal.

The 4-Hour RSI did indicate an overbought condition when we were up at $445 but it's since dropped back in range and is pushing upwards again.

As I say - despite chart technicals, it's Bitcoin. Anything can happen and we would normally expect a pullback at this point as I pointed out in this commentary, say to 420 at least. Just going on these indications though I'd say we'd be lucky to see a dip to 430.

No probs. Hope it works out for you.

To me things are looking good. Correction back to $421. No problem.

It's not going back to $365.15 I don't think. Indicators are in good nick, the 4, 6 and 12 hours charts need to work through their corrections which may take a few days to a couple of weeks. If they do that in a reasonably orderly manner (like staying above say $400, worst case odd dip to $380-90) then the market will be in a very strong position to finally traverse the great GORF.

Keep your eye on the 12-hour moving averages and moving average convergeance-divergeance which will inform the behaviour of the lower order ranges. If the MACD histogram puts in a clear bar early on in the red zone then we're looking at the optimistic end of things. But if it digs with solid reds for several days then we could be looking at a failed breakout.

Looks to me like BTC lift-off around early to mid next week (if not before).

Launch window opening in a couple of days for Bitcoin Earth to Mars minimum energy transit and escape from the $500 sphere of gravity.

All lights continue to be green.

Main engine ignition. All charts clear.

Say goodbye to sub $400 Bitcoin.

Forever.

GORF crossing awaits over the next few weeks.

There is pent up worldwide demand for bitcoin. We may be imminently headed for $6000 BTC.

I'm not joking. Lets see.

Bitcoin has had a battering from the media for the best part of 6-7 years. Plenty know about it now. It has been superseded technologically and none of those assets even made a dent in its marketcap.

It has been superseded institutionally because we now know that banks all over the world have been running their own blockchains. But none of them even made a dent in Bitcoin's marketcap.

It has been superceeded strategically because we now have smart-contract based blockchains galore, yet, even none of those blockchains even made a dent in bitcoin's marketcap.

What will banks do when they discover that the value isn't blockchain, it's bitcoin ? What will they do when they discover that blockchain is dirt cheap, can be reproduced a million times over and actually isn't much more useful technologically than an SQL server worth $1000 bucks ? What will they do when they discover that bitcoin isn't dirt cheap, can't be replicated, can't be bought, can't be regulated and can't even be matched for hashpower with the combined budgets of all the world's banks put together ?

Bitcoin is going to be in demand by $7 billion people. Not for technological reasons, for monetary reasons. It is a perfected token both monetarily and sociologically. It is beginning to successfully conclude its "rights of passage" phase and just shortly, $400 now is going to look like $1 did back in 2010.

Earwig Low.

The dump is Ethereum speculators cashing out their gains to fiat worldwide.

Halving got priced in with the rise from $250 to $400.

Huobi lifting off.

Might have legs this time because 6-hour chart correction is now complete.

How bullish can a penant flag get ?

Thats one for chart school.

Nobody's at $600 yet.

Hold your fire.

Ok. Thats it now.

We're now looking for 3983 CNY to break past the flagpole top.

2 and a half thousand coin wall @ 4000.

Chinese traders are reluctant to take it into the 4000 Yuan trading range.

However once broken we could see 8000 quite quickly 

We've broken out of the flag top on Huobi.

That wall's taking a hammering but it keeps getting replenished just as fast.

Where t.f. are all these coins coming form ? The bots must be placing a sell order almost instantly just 10 CNY above the buyin level.

UPDATE: F*ck. Finex now at $610.

Full Breakout. 4000 CNY

Smash & grab ob Huobi now.

China well on the way to $700 now.

We're into 2013 territory. (Except with far more fundamental basis).

Need a few regular corrections so it doesn't get too overheated.

the thing about halving is that it isn't like other speculative "pricing ins". However much of it is priced in, there will be a sudden supply rate reduction coming on top of it which will remove a lot of selling pressure.

I probably agree with this. I told someone to get in when it was at $600 on the way down. Luckily they didn't buy. But now it's passing $600 on the way up in a long term trend reversal so it's a bit safer.

Also, we are in a less speculative market than 2013. It's clear now that bitcoin isn't going to zero. (At least as clear as reasonably could be in the investment world). There was always general consensus that it would either go to zero or infinity since the coins were in limited supply. Looks like the latter to me.

 • We still have actual halving to come.

 • We also have a capacity jump from 2.3 TPS to 100,000 TPS.

 • We also have a whole pile of VC funded projects baking in the oven that are going to result in who-knows what massive advances in the viability of industrial use-cases for cryptocurrencies.

 • We also have Brexit, Grexit, Spexit and Frexit.

 • We also have gold bugs discovering that their "stack" is not tradeable in limited supply form and not limited supply in its tradeable form.

 • We also have Dollar collapse, Abenomics lapse, Debt limit gaps and Batwoman straps once Mrs Lagaarde slaps the Special Drawing Rights currency on the world economy as the mandatory international reserve.

 • Plenty of fundamentals floating around to cushion any big cash-outs I'd say  

That depends on where it's headed.

If we're about to break the ATH and headed for the next stop of $6000 per BTC then $50 a day is not unhealthy but normal. Also, if you actually sit down and do a valuation for a limited supply world currency then $10B marketcap is kind of peanuts so it's difficult to see how it could possibly grow without massive fits, starts and volatility like a fully grown albatross starting to burst out of its shell.

Lets look at the big picture, complete with 1-Week MACD momentum indicator.

Looks perfectly healthy to me.

That breakout is heading somewhere significant that may put the 2013 spike into a different perspective  

Always remember:

Gold is not tradeable in its limited-supply form and not limited supply in its tradeable form. Bitcoin has these two properties co-incident. Once that fact starts dawning on people it will add to the self-sustaining nature of the growth.

Huobi telemetry lost...

It might not be a bad idea to check Twitter's growth profile for precedents.

Earwig Low.

Hobular's off on another tear. Could do with the market just going bid only.


760 BTC wall....munched in a single trade.

120 BTC wall...munched.

68 BTC wall...munched.

We're exactly where we were yesterday except with a 6 in front of the price instead of a 5.

2much information  

Hobular in suspended animation prior to dumpfest.

Thats all folks ! Come back next week for the next installment 

Yeah. Looks like Hobular's got $700 in its sights now.

5 minute chart correction complete without a major dump. 15-minute on the backside of its curve. 1-hour chart's not even blinked yet.

Investing in gold right now is like investing in travel agents just at the arrival of the world wide web.

Hobular gone silent again.

Worldwide banking crash must be imminent.

U.S. Public about to get disarmed following that Orlando thing I imagine. Troops on the street.

Hobular's back in business.

1.02 BTC Wall...munched.

If you're an ant. It's all relative 

(Was just looking for an excuse to say "munched" again).

We're getting the 1-hour chart correction that I referred to earlier.

This will take a while - several hours probably at least. If it turns into a 4-hour chart correction then it'll take the best part of a week but it needs to decline for a good long while before that occurs.

The alts may briefly surge now.

Hobular only $14 away from $700.

1-hour correction blown to Kingdom come by that candle.

Huobi has learned to count.

I'm amazed that nobody's found ways to arb that huge BTCe lag.

I'd have thought the way to do it is just to maintain large amounts of fiat on there and wait for rally, then cash in on BTCe and immediately out on Bitstamp. It's a no brainer fiat gainer.

One could even borrow funds at negative interest rates to do it.

515 Hobular BTC shot.....munched.

Howd'you know it's not empty of fiat as well.

Thats the problem - fiat is such a slow mover that when the exchange reserves dry up, demand dries up as well.

Can't hold that Huobi down. It's got hold of an anti-gravity device.

The 1-Week candles are now into December 2013 territory.

There's been nothing like it since then.

No - there aren't but you've got to remember that only a minority are buy to hold.

Most markets are driven by traders constantly cashing out and in. The same people that were in the market at $300 won't be those same participants at another price. Some people are maximising fiat, others are maximising BTC. If you're a "fiat accumulator" then you cash out at every small top and back in at the dips. So the volume is from the same traders entering and exiting again and again.

Many will have joined at $300 and exited at $350 for example. Thousands of others in at $500 and out at $600 and everything in between.

You also can't tell who's gaining and who's losing because a fiat accumulator will take one side of the trade and a BTC accumulator the other side of the trade where one trader measures their gains in fiat and doesn't care how much bitcoin they hold, the other in bitcoin and doesn't care how much fiat they hold.

710 Hobular BTC shot......munched.

Now that the thread's been cleaned up, it looks like BTC is positioning for $700 across all exchanges. (Bar the lazy BTCe that is which is still studying its navel waiting for more fiat to arrive).

Ethereum's gain (against $USD) is because people are buying BTC, not Ether.

Superb Reggie Middleton explanation:

https://www.youtube.com/watch?v=jeTCIPMFVus

Reggie Middleton predicts banks demise (in a polite way):

https://www.youtube.com/watch?v=rwwUPNtvXJE

I'm into both too.

But I've got clear in my mind why. They are different markets with different objectives. Ones gold and the other's lego. Both are can be valuable but for different reasons.

If you want to invent metrics to suit your case and use "relative market volume" as a measure then I think you'll find you got blown away by YB Coin which had 32 times more "Relative market volume" than Ethereum  

Certainly.

Ever taken a train ride ? Well if the train's travelling at 80 MPH and you take a stroll to the buffet car for a coffee, you'll actually be doing around 82MPH - 2MPH faster than the train.

There's a reason that every exchange expresses all alt-coin values in one denomination only and thats because one coin serves as the front door for this entire market.

(And it ain't no Lego-Coin)  

Hey - I don't want to criticise your investment preferences. Just sayin.

Like I say - both have distinct markets and both are likely perfectly viable  

We're now above the June 2014 resistance level.

Fresh fiat arriving at exchanges.

SRB's being refuelled.

Exchanges all fully arb'd (except 1 straggler of course).

Hobular and Titstamp within 50c of each other.

Eh ? Wot yoo tokin about ?



Cos once your out of bitcoin, yo in fiat. Quicksand.

I'd say the dumb money is in gold. If you want to be standing with your pants around your ankles in ten years time then invest in gold.

Here's the problem:

Over the last few millennia, gold gained value due to its monetary properties more than anything. In particular, those of limited supply, fungibility and mobility because coins could be transported anywhere in the age of physical markets and exchanged directly - peer to peer - just as bitcoin is.

However this is no longer possible. Gold has lost this, most important of monetary properties since during the last half century the bulk of the world's trade has moved from a physical to an electronic platform. This means that you no longer transfer ownership and possession of gold in the same trade and so consequently the gold market has forked into 2 distinct monetary media: a physical one and a (so called) "paper" one where ownership is transferred but posession cannot be taken. The problem with the paper market is that it is not a fixed supply, so bang goes the second of gold's great monetary properties.

Gold traders can choose which of these two media they prefer to trade - you can have either mobility or possession but you can't have both.

Because of this "forking" of the market, gold will never again command the kind of values or be able to support the same kind of "safe haven" investment that it did during the last few centuries. It is handicapped permanently and pegged at a value which represents the balance of demand between the physical and paper markets.

Cryptocurrencies, on the other hand, remedy the problem since they are the perfect "bearer instrument". One with which you can take both ownership and possession in the same trade and for that reason are likely to outperform precious metals by several orders of magnitude over the next few years.

Ouch. No Macbook Pros announced @WWDC.

Disaster.

You can say that again.

Games going with serve now.

Nearly 10k BTC Hobular volume fired straight into the 30-minute chart crossover which is unheard of so close to a 1-hour top after such a steep climb. We still have the actual halfing itself to come. And the capacity leap from 2.3 TPS to 100,000 TPS and quantum leap in VC capital.

Do you remember the hullabaloo over $500M VC capital in one year (2014) invested in Bitcoin companies ? Now we're talking 3 times that amount in just one single project.

None of this is priced in. In fact it was positively priced out during the massive profit take of 2014-2015. It's all still to come - not just for Bitcoin but for the whole cryptocurrency sector - so get strapped in.

Sorry, my bad. Thanks for the qualification  

About 2 years ago I really thought Bitcoin would be superseded. I hedged a bit a bit into Peercoin because I thought that would overtake it due to its optimised design for "trunk capacity" i.e. the way the fees and the algo were structured were specifically to drive it into the role of a "financial backbone" as its designer had envisaged a multi-layered financial cryptocurrency system well before the lightning network even got started.

Then came the flotilla of "alts", none of which even made a dent in Bitcoin's marketcap despite being much more advanced technologically in many areas.

So then I realised that monetary roles and technological roles are very distinct priorities and in many ways in conflict and that was why Bitcoin had succeeded against expectations when all these alts arrived. Events since then have only confirmed this view. Even Ethereum, for all its technological vastness, hasn't done much relatively speaking.

Although I still believe we'll see a diversity of assets (I hold about 60% BTC, 40% alts) I think it's clear that Bitcoin is only consolidating its position, especially having fought off all that competition without even having had any of the large infrastructure developments that are now coming its way. That probably also goes for the few top alt coins that have shared much of the journey.

To me it's now a no brainer. The banks are bluffing with their "blockchain" nonsense. They've no use for a blockchain and haven't got the hashpower anyway. Once they start to discover that there'll come a tipping point (maybe already here) where eveyone switches from ignoring/attacking bitcoin to scrambling to be the first to support it with new banking business models along the lines of the Coinbase one.

As far as ultimate marketcap goes - think of a number. It's only going to get harder for anything to compete as time goes on. The hashrate that the bitcoin network now has is phenomenal. It even needs its own unit of measurement it's so huge. (Go on coinwarz and do a page find, Command-F, for "PH/S" and see how many hits you get    )

Most people in industry still don't get it. It's a sleeping elephant just as the world wide web was. Nobody really remembers the point at which email became indispensable or when they stopped using a high street travel agent to book a flight. It was like the tide coming in - a slow, subtle but unstoppable change. I suspect the coming revolution will be a bit more volatile though because the world financial system is just so flakey right now that there's bound to be a few avalanches here and there along the way.

I agree with the principal of that commentary but in practice the "limited supply" aspect is not quite true because Bitcoin will be levered. Any limited supply asset base is always levered in order to meet liquidity requirements in its derivative markets. If the banks don't do it, the free market will in order to achieve price stability in certain trading sectors.

Despite that, the fact that Bitcoin is an electronic "bearer" token means it is more accessible to the ordinary holder so its easier for people who actually want to hold the base asset to do so.

I experienced the last one in 2013 - every last day of it, including the grizzly descent back to $200.

You'd be surprised how smart many traders are who actually drive the price. They just go by charts - nothing else and if it went up then it's coming down, no buts about it and no matter what the "fundamentals" say. I was amazed at how all kinds of bullish events were happening - Overstock started accepting bitcoin, new Chinese exchanges, Bitpay arrived, talk of ETFs you name it. Yet the price kept plummeting. It was perplexing to watch.

The only thing you can be sure of is there's no amount of reality that can out-do your imagination. So if you imagine some future, take 5% of that and you might be in the ballpark cos hype won't do it - ever  

Yeah. Possible retrace - 4200 perhaps.

Maybe Deutche Bank going tits up on Germany's negative bund yields will spare us the hassle of a 4-hour chart correction.

A day or two more of this...maybe 4 or 5 more.

Refuelling proceeding smoothly at all ranges. 75% complete.

Traders finishing off sandwiches and juice and slowly returning to posts in attack formation.

Don't worry, I don't think Bitcoin will ever be a "fiat vacum cleaner". Think of it this way....

There are 2 general types of "money" needed by advanced economies. 1 type that keeps prices stable (for trading) and one type that keeps the supply fixed (for store of value). The one that keeps prices stable is simply a way to denominate trades - it isn't actually "money" in the sense of being a bearer token like commodities, precious metals or cryptocurrencies. On many websites now you can even choose how to denominate your trade - Canadian Dollars, $USD, EUR, whatever.

Those trading currencies need to have a variable supply - like the USD. A fractional reserve system which inflates and contracts according to liquidity requirements. If you don't have that and use a fixed supply currency like Bitcoin for trading then half the businesses in the world will go bust and the other half will make supernormal profits which are not sustainable.

So I don't see bitcoin ever being used as a trading currency en masse. (You don't see prices ever being denominated in gold and neither did we when there was a gold standard). Bitcoin is a base asset which can be used to "back" trading currencies for example or facilitate the capitalisation of whatever markets, but I think prices will still continue to be denominated in prevailing regional currencies.

It does make sense. They would buy USD because they need it to faciliate trade of goods and services which are denominated in that currency. It doesn't depreciate fast enough to inhibit its use for trade. Any longer term holdings are invested so they don't lose value. Thats just how the world works - look back in history of 100 years. The $USD has depreciated massively - about 98% or something, yet it didn't inhibit the most monumental period of growth the world has seen in its existence.

It's right that fiat currencies should depreciate in value over time because their primary purpose is to facilitate trade and keep prices stable, not to store value (in the long term that is, obviously they need to be stable enough to store value in the short term).


It won't be. It's academic. No fixed supply currency can be unless you have an economy that doesn't expand or contract in size. Also, if it was stable it wouldnt be doing its job. Many commentators criticise bitcoin for its volatility but it's that very volatility which indicates that it's successfully reflecting the balance of supply and demand for liquidity.

Well, I was really describing a hypothetical situation where something like bitcoin was the main trading currency in an economy. In that situation bitcoin wouldn't have a price because there would not be a dollar with which to price it.

Lets say the size of the economy is "GDP" Bitcoin turnover per year. In other words, every year an amount of goods and services to the value of GDP (measured in BTC) is exchanged.

For a given monetary velocity (the GDP divided by the coin supply, or how many times the entire coin supply circulates on average), the relationship between prices of goods and GDP is linear. That means if the economy grows by 10%, prices have to decrease by 10%. If it contracts by 10%, prices have to increase by 10%.

This cannot work - for the reason I outlined in a previous post. Business go bust due to manufacturing cycles not coming in on budget and all sorts of unpredictability which is why the fiat system works as it does. It gets round this problem by creating new liquidity as it's needed and extinguishing old liquidity as economic expansion catches up with monetary inflation.

Even if this were not to happen (through the banking / credit creation system), the free market would just find a way to do it itself via the creation of hedging derivatives (and in fact already does in the case of international trade).

Thats why I'm saying that there'll always be these two parallel and complimentary dimensions to the monetary system and that will still be the case even if bitcoin becomes a mainstream asset.

You can't separate "speculation" from any other sort of demand. Demand for monetary liquidity comes from all kinds of sources.

I'm just pointing out that a fixed supply commodity - whether it's electronic or physical - is no use as a trading currency in an advanced economy unless it has a huge derivatives layer pasted on top of it that accommodates stable prices.

Here's more granular example that might be easier to understand and doesn't involve central banks  

Lets say you're a U.S. manufacturing company that makes teddy bears for the European market. You expect to sell $5 Million worth of teddy bears in Europe in the next 6 months and so you budget your manufacturing costs and production schedule accordingly to come in on a 30% margin, 5% of which is net profit.

So you expect an income of $5M denominated in Euros over the next 6 months which means you've got massive exchange rate exposure which could leave you at a loss in 6 months time, even though you did everything right, came in on budget and met your sales targets.

To avoid that situation, you purchase a hedging derivative such as a currency swap or Euro put option to cover 4.4M Euros which is the euro equivalent of your anticipated income at the start of the budget period.

--- Now: Lets asses the situation at the start of trading ---

Without even selling anything, you've just expanded the money supply by a few percent in the derivatives layer (which is basically a higher order extension of a base money supply). That derivatives layer then develops a life of its own - even when you no longer have use for it as follows...

Lets say it's 5 months later and the exchange rate moved against you by 20%. Your put option is now worth 1 million (20% of $5 million) dollars but you only made $4 million in sales. So you will get more on the open market by selling your option than you will by exercising it. A whole new monetary layer therefore opens up that's potentially even bigger than the base layer but which has the same effect of expanding the money supply (or making bitcoin's supply 'unlimited').

Advanced economies have massively complex layered monetary systems. You can't just say bitcoin's going to take over and expect everything to be denominated in units of a deflationary asset. It's ludicrous and ain't gonna happen.

Bitcoin is a monetary asset like gold and is far more mobile than gold, so it will probably have a role in trade to a greater extent than gold did. But it's unlikely to ever actually be adopted as a mainstream trading currency denomination IMO.

LoL !

I know what you're saying - as the marketcap increases the volatility gets less which is true in relative terms. However, the stakes just change as it gets bigger.

A 1% short term move in the gold market is considered huge volatility.

For me, short term target for bitcoin is monetary asset markets, not retail adoption. In other words if it could capture 5% of the gold market that would be a massive thing and not unrealistic either because Bitcoin can probably service that market far more efficiently than gold can. Thats what people should be thinking - forget B.S. about Amazon accepting bitcoin or anything. Thats not not going to happen and even if it did would make zip difference to the marketcap.

Well I think it's time you bought it 

You run a fairground. At the entrance people buy tokens - 1 token counts for 2 rides. Inside the fairground, there is only 1 currency: token currency. (Call it Bitcoin if you like).

Each day, you have an average of 100 people inside the gates at any one time, each person buys on average 5 tokens. So you maintain a "money supply" of 500 tokens which are constantly being recycled, even though the ride capacity is not fully utilised.

Then one Saturday, due to excellent weather, you get a 50% surge in visitors. Now you have 3 choices:

1. inflate the prices so that 1 ride costs 1 token instead of half a token
2. turn people away
3. get more tokens (inflate the money supply) and keep prices the stable

Sure, you can have stable prices with a fixed monetary base, but only if demand for liquidity remains stable (which is cannot in a dynamic economy).

We're talking about different things with regards to "price" I think. You're talking about the bitcoin price in dollars (/fiat) and I'm talking about goods prices in denominated in bitcoin (in a hypothetical bitcoin denominated economy).

In the latter case, there is no speculation in bitcoin itself.

The end of the next 15-minute chart correction cycle could start to get interesting.

Because many traders like to go long at the end of the 4-hour chart correction which is currently struggling a bit to pull its socks up.

In momentum terms, the reason it's struggling is due to an adverse cyclical harmonic in the lower order ranges, specifically the 15 minute range. The rest are not inhibiting to a trend reversal but the 15-minute cycle is.

However, now that I noticed that I also see that the 6-hour chart cycle has started correcting as well, so maybe we've got a day or two of this to go yet.

Ok Mr Adam Varoufakis.

I'll accept your theory into the coinomics hall of fame and candidature for potential decentralised monetary policy even though I don't agree with it and we'll just see if it works out.

I suppose there's enough voodoo logic in the current system to make anything look good so you never know.

In the meantime at least it looks like it might be worth the price, whether its stable or not  

No. It's still in progress. (The bicycle pedal can be going up, even when the bike's going down a hill. What you're seeing is just the pedal, the bike has not yet really confirmed it's changed trajectory).

Well, first of all, there's not really such a thing as "THE" correction. Each chart range has its own definition of a correction. So for example, as you already observed, the shorter range charts have completed their "correction" and are in the green. But their cycles are so short that they don't really count for most people. You're probably thinking of a timescale in terms of a few days (e.g. the last big rise lasted a few days and the subsequent correction has lasted a couple of days). So the chart that corresponds to that sort of timescale would be the 4-hour or the 6-hour.

Secondly, every trader has their preferred indicators that they give different priorities to depending on what type of stock they're trading, the nature of the market, timescales, volatility etc.

In the bitcoin market, I tend to use momentum indicators at short ranges and volume at long ranges (for example On Balance Volume which I find is useless on a day to day basis but very informative on a month to month basis).

So in conclusion my own definition of "when the current correction has ended" (which is purely subjective - other people will have other definitions) is when the 4-Hour MACD indicator shows that selling momentum is exhausted at that particular chart range.

Thats when this little indicator's red bars get shorter and start turning green again...



So you see how the blue and brown lines are still quite parallel ? That shows that the market is still being driven down at that chart range (it's being driven up at lower order ranges - shorter timescales). However, the histogram shows that the lines are starting to converge which means the rate of selling is slowing, even though it's still being driven down. When the blue line crosses the brown, the buy and sell momentum have reached equilibrium and many traders pick a chart range to trade and go long at that point.

It's not bullet proof though. It's just one indicator. Sometimes you get a double dip right at the crossover point and you get a huge cash-out instead. That can happen if trading sentiment reverses and shorters use the crossover point to anticipate maximum liquidity into which to dump. Right now, with halving coming up and stuff, I don't really see that happening but you know what these markets are like, anything can happen  

Working superb actually.

http://blockchain.info

This is nothing.

The 4-Hour chart correction is only just closing....



It's just lining up on the runway getting its flight clearance.

Gold's broken $1300. Deutche shares are into the $12 range.

Nikkei !!     Abenomics lying in the ditch. Looks like Japanese money printing and stock values decoupling and reversing.

Italian banking shares being hammered again.

Steve Liesman says Yellen's thrown in the towel.

According to Vinny Lingham, we've already passed the ATH.

He adjusts for coin supply. Pretty interesting article.

https://vinnylingham.com/deconstructing-the-bitcoin-market-cap-ce52b0d87035#.b8z8bds15

All bitcoin chart ranges now turning green. Corrections washed through.

Walls....munched.

Hobular smash & grab in progress.

Hobular 5000 CNY incoming. Thats the magic 2013 signature level.

J.T. Borgan (<-- libel mitigation format) have got a stash of about 6M bitcoins that they've been accumulating over the last 5 years as part of a due diligence programme in case things get "out of hand".

They have a dedicated team of crack traders permanently assigned to the bitcoin market who carry out co-ordinated surge mitigation designed to pummel bullish sentiment at strategic points in the asset's growth such as the manoeuvre we just witnessed an hour ago where a potential rally got dowsed just at a key moment when the 30-minute chart was about to go green and the CNY valuation was about to hit 5000.

The footprint from this excersise can be seen here on the 30 minute MACD which has now gone negative again.



The J.T. Borgan surge mitigation team (and their industry counterparts at P.B.O.C., FED, BofE, ECB) have been well aware for years of the potential of cryptographic assets to burst the debt bubble and loaded up a long time ago as a matter of due diligence in order to be able to take full control of the market in the event of a debt/fiat deposit crisis.

Moreover, their crack trader teams are able to carry out their operations on a sustainable basis due to being able to front run the market using inside knowledge of when the co-ordinated manoevres are coming.

Enjoy !!  

I just used my imagination. Can't be that far from the truth 

Ok. China's making another run at it.

lets see if the surge mitigation team are ready for them.

December/January 2013 resistance field being encountered currently...

Thats if the surge mitigation team allow it.

Brexit suspended.

This guy on Zerohedge seems to have captured the picture perfectly.

Markets also seem to have understood the subtext.

Ok. Here is comes. 5k Yuan incoming...3..2..1...

Right !! I'm sick of this hanging around in 3-figures. Get this thing moving f.f.s.

Stop being such a shower of pussies dumping every 20 minutes and get it to $6000 already for Christ sakes, bunch of pansies.

There's nearly 3 years of consolidation, investment, promotion and industry growth to be priced in. Apart from the halving, there's 100,000 TPS capacity leap around the corner.

Lets not f*ck about here. Bitcoin's been around for nearly 8 years now. It's clearly here to stay. It's fought off every type of challenge from hundreds of contenders that were technologically more advanced. It is only getting more secure by the day as the network attracts ever more hashpower so get your f*cking fingers out of your ar*ses and start buying.

There's no amount of money all the banks combined and all the governments of the world can put together that can match the bitcoin network's hashpower and security so quit acting like it's some kind of tightrope walk and start putting some pace into it you laggards, this is like watching paint dry.

Hedge funds are going to be doing the sums as to such an asset's real value (as opposed to market value) once reasonably mature and those valuations are going to be coming out in the 6-figure range at least, then there's the background context of the worldwide financial crisis and ballooning debt so what the f*ck are you cissies waiting for ?

Move !!  

Ok, Hobular 3 and 5 minute waves coming around now. Surely this must be it for 5k...

Get that 964 wall smacked....

Thankyou.

LoL ! $1 Million dollar sellwall placed @ 5000 Yuan lasted all of 3 seconds.

Whats happening is that Bitcoin is --massively-- undervalued and has been for a very long time.

For the last year everyone's been staring at each other waiting for someone to make a move while the elephant in the room grows ever larger. The volatility is simply because the real valuation isn't just a little bit higher then where it is now, it's multiples higher and the journey up's gonna be turbulent - not smooth - due to the FOMO.

$800 incoming. $1151's gonna be hosed and everybody now knows it.

Approaching the end of the 15-minute wave correction. Multi-million pound Hobular walls vapourised.

Watch out - order books are just about the most unrealiable indicator known to man for guaging demand.

Here's how they work:

[1] - if the market thinks the price is going to rise (doesn't have to be bullish sentiment, just expecting a rise)

Then the bids will thin out and the asks will thicken. This is because real demand goes off-order-book since nobody wants to push the price up more than they have to by placing orders so buyers stay hidden since they are not confident of having their orders filled below the spread gap.

Meanwhile, sellers DO place their orders at a measured distance above the spread gap so that they catch any spikes which lets them instantly cycle back into the market minutes later having accumulated at the back end of the spike.

[2] - if the market thinks the price is going to fall

Then exactly the opposite happens. The bids fill up and the asks thin out because fear has set in and sellers are nervous of placing orders that chase away precious liquidity, so sellers stay off-order-book this time. Meanwhile, large bids get placed a reasonable distance below the spread gap to catch any major dumps. Those large bids are not from people wanting to buy into the market (i.e. they are not genuine demand). They are "quick buck" operators who will immediately sell into the rise that follows the spikey plunge.

If the order book is balance, then the market is neutral in terms of expectation.

You can see this in realtime on Huobi in Bitcoinwisdom. As soon as the slightest small bull rally takes off, massive asks get instantly placed at intervals above the price, even though the price is rising. Then they get pulled just as the price approaches when there's no longer enough of a spread gap to turn the trade around and get back in with an accumulation.

So don't think for a minute that because there's a lot of bids that means there's a lot of demand or because there's a lot if asks there's a lot of bears. It's more likely that the exact opposite applies.

Here's an example. Look at Hobular bids right now - they're thin. Whereas asks are thick.

That agrees with the 1-hour and 2-hour chart trading momentum indicators which show that those ranges are nearing the end of their correction. So Hobular traders are watching those indicators and have started to anticipate a rise by placing asks, but at enough of a distance from the price to be able to get back in following an aggressive spike into the order book.

As the price rises, those walls will get pulled and moved up again so they remain within 'catching distance' of any spikes. However those sells will be buying straight back in whenever they catch a leaping fish.

Borgan dumping.

A kind of demented one.

Earwig. Low.

Some Hobular manoeuvring has started.

Green candle alert.

I think that's spelled:

Earwig Low 

That pump has done a quick 180 and turned into a dump.

It was the Borgan Quench out in force again.

Still plummeting.

Perfect double top visible on the 2-hour.

Time to google chartschool for first peak-second peak-neckline mumbo jumbo and what it all means 

Manoeuvres.

There's a 2264-shot wall on Huobi holding up proceedings. If that gets eaten then we're clean clear to flagtown notwithstanding any spontaneous interventions from the Borgan Quench.

UPDATE: Munched.

We're now looking for 5180 for penant breakout.

Very interesting - thanks for posting. I didn't know about that background to the growth of the exchanges.

I wish Brother JohnF would return with his bitcoin report.

"Hello everybody, time for another bitcoin report. This is the Mt Gox 4-Hour chart from Clark Moody's. We currently have approx 6500 coins on offer and around 10,000 on demand."

Yeah - they've never been bettered. He must be tempted with all the action - maybe waiting for it to get past the ATH.

The "Quench" has been activated.

I doubt it.

There's no crypto in existence that doesn't require luck  

I would have dumped it if it had been broken but it wasn't - it worked perfectly despite a massive fail in a contract logic. For that reason I hope they don't fork it.

I'd  have about 1 tenth of the holdings I currently hold if I'd just stuck with bitcoin.

Fact is, there's no portfolio of any type in any asset sector that doesn't benefit from diversification and hedging. I've made plenty of criticisms about Ethereum but mainly in the area of monetary properties. I don't have any problem with it as a technology asset - thats the way I think of it.

That was my opinion as well, but the devs seem desperate to save the DAO funds. I wouldn't be so hasty - it's a massive precedent to set. I think they might be worried about that amount of coin ending up in one pair of hands, but - tough.

Doesn't matter. You win some, you lose some but you must be hedged. Thats essential.

Bitcoin has its own problems coming up - Lightning network. Thats gonna be a complete nightmare. Sidechains are also a total clusterf*ck that have nothing to do with good monetary properties.

So I just think people should not get too cocky when watching others slip into an unexpected pool of quicksand because there will be one waiting for them right around the corner.

We are starting to get mainstream breakthrough.

Congratulations on your foresight.

This guy also seems to have been pretty damn on the money for the time....

I think we're done for a while till some corrections wash through.

Everything's gone saturated on all ranges.

That 12-hour....might retrace back to the next support level @ 670. Needs to wash through I think - even if it's just a gentle correction like June 8th-12th.

We're only back to where we were a couple of weeks ago.

As long as it doesn't turn into a long term bear market where that was the turning point - the final high of bitcoin EVER - and where it drifts down to zero from here, we'll be ok  

If we've not reached the summit
Then Bitcoin plummet

It's the Borgan Quench.

Wow. Those Italian bank stocks - in need of some massive injection of ECB viagra right now.

Deutche bank failing to defy gravity: https://www.google.co.uk/finance?q=ETR:DBK&ei=QjVxV8qRHNWCsgHu7pvADQ

Italian market (mainly banks) failing to defy gravity: https://www.google.co.uk/finance?q=INDEXFTSE:FTSEMIB&ei=QjVxV8qRHNWCsgHu7pvADQ

Was that post supposed to be a joke ?

If adoption is an objective of a new monetary medium then capacity issues is a problem you DO want to have  

Hobular is back above 700.

It's clear we are going to the moon because all corrections have now been washed out and the 1-day chart is about to cross over.

The reasons it went down that I highlighted here (whales dumping on technical indicators) have now completed their corrections and those very same indicators have now reversed and are showing a "too the moon" fertile market as batteries are now back fully charged.

Selling now would be sheer lunacy because there is no selling momentum left, the timing appears to be inch perfect to co-incide with an actual 50% drop in supply rate due to halving, there is about to be press coverage, central banks are starting another round of easing, Lightning Network is about to go live - destroying criticisms about capacity problems, Brexit pushed the world economy closer towards a decentralised world of uncertainty, the network hashrate keeps going ballistic making a joke out of closed loop banking "blockchain" technology and its only a matter of time before that lightbulb goes on in the minds of hedgefunds.

Well, Ethereum is a programming language so I sure hope it would have. But if I'm going to invest in a monetary asset then I won't pick a 'programming language', nor would any other investor with half a brain.


Thats who SHOULD be in it if it's doing its job. Anyone who holds a pure monetary asset for no other reason than they think it will hold its value is by definition a speculator.


Or maybe you're just trying to rewrite history to make yourself feel better about your position  

Non-monetary assets have very different properties.

In particular, they depend on accruing value by productive growth. (i.e. they actually need to keep developing to stay ahead). Thats why, say, the likes of Ethereum have a big challenge because they can't rely on being the "first" to market. It can be much more easily replaced than bitcoin can and are exposed to the "MySpace - Facebook" phenomenon in a way that Bitcoin isn't.

We've already seen that by virtue of there having been hundreds of more technologically advanced alt-coins which haven't even put a dent in Bitcoin's marketcap. On the other hand, if a more technologically advanced smartcontract blockchain emerged it WOULD be likely to put a dent in ethereum's marketcap.

Sorry. yes - you are right. Someone who holds a non-monetary asset, for no other reason than they think it will hold its value IS a speculator.

Earwig. Low.

Hobular breakaway.

Titstamp crossing Zoo.

Borgan Quench brought to bear on that last rally.

Halving being priced out.

I wonder what effect "actual halving" will have (as opposed to speculative halving).

Last chance to grab some coin before halving and the price goes absolutely skyrocket bananas.

Instant disappearance of half the entire bitcoin supply growth. Like lifting a 1000 tonne weight off a volcano  

Also, I'm sure core are precision-timing the release of key new announcements and technologies to co-incide with said event as they are taking no chances.

So get buying now or loose access to all known train tickets 

The thing is this.

At the moment, we've got speculative traffic in both directions. Fundamental traffic in none.

After the halving:

Speculative traffic on one direction and fundamental traffic in one.

...since we have 1 known direction (the fundamental), the worst that can happen is the speculative traffic cancels it and we go horizontal. On the other hand if the speculative trading follows the fundamentals, well....

It's barely been 30 hours and already, there are 1875 BTC missing from the supply 

Everyone was waiting for it to dump after the halving.

Then when it didn't dump they started to get nervous and didn't know if it would dump or pump.

Now it's a smash & grab situation.

Well it was sounding good up until you said that anyway

Huge 4-week wedge forming. It's pointing at $640.

Winky ETF news.

More target practice for the cynics 

Post your contemptuous comments and derisive dismissals here ! 

I'm gonna have to start following this thread again now that BTC looks like it's about to skyrocket.

Lets warm up with a bit of light shilling to start with: 1 Day chart well compressed with all exchanges tightly arb'd to with in a couple of $USD's. 12-hour Hobular OBV retaining a steady 40 degree climb for nearly a month against a relatively flat price ? First ever Lightning network transaction completed ? Segwit on the cards imminently with the prospect of near doubling network capacity ? John - Bollinger Band - Bolliger turns out to be a BTC watcher ?

Could get interesting.

Is a month good enough for you ?



Also....if we look at the longer term pattern a more interesting picture emerges. Only a couple of things not perfect with this formation - the original retrace to the bottom of the 18 month "cup" was a good deal more than 1-2 thirds of the "initial advance". However, there were two spikes at the start of the pattern before support failed. If we take the start of the cup from the lower failed (4000 Yuan) level then the retrace is more commensurate with the textbook retrace. But we've have already broken through that level and the "real" breakthrough that matters I suspect is the 5100 Yuan level that collapsed in January 2014.

As JayJuanGee says, the volume needs to start increasing on the way out of the handle for breakout to be ignited. There are some positive indications though. The 1-week MACD sell momentum is declining and the lower order charts are diverging to the upside. We've just had a good period of consolidation and there is a lot of fundamental growth in the sector about to start bearing fruit over the next year, including developments in the bitcoin blockchain itself.

I'm quite bullish (But then I always am. Need to be right at some point).



See also:

https://www.youtube.com/watch?v=dH_Ty-Digfk

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:cup_with_handle_continuation

Hobular trading adopting hover mode while waiting on stamp & finex to catch up.

Lets see what happens one they snap into fully arb'd valuations. Only 4$ in it. Traders not blinking.

If it continues up, Zerohedge (now long BTC) will be standing by with its customary dose of salt to rub in the wounds of its gold bug readers.

Update: Finex fully arb'd. Stamp does not want to play ball as usual. Has to get dragged out of bed reluctantly by the far East.

Really ?

I knew nothing of this. Any links ? What's so special about tomorrow ?

Hobular 1-day volume highest on record since May so far (and it isn't finished).

We need to get to 5180 to light touchpaper.

Wots wrong with stamp ? Even BTCe's at 638.

Yes indeed. Thanks for reminding me about the possible fake Chinese volume b.t.w. (and the poster above). I'd forgotten about all those games that get played. Despite, I do think the last 18 month's trading looks reasonably genuine when taken as a whole. The recovery from $200 onwards has been fairly cautious IMO.

So is BTC gonna tank later today when the SEC decision comes out and knocks the Winky's back again ? Should I liquidate a couple of BTC on localbitcoins while the going's good ? Or is everything gonna be ok.

Decisions.

Better go and make some soup.

Earwig. Low.

http://fortune.com/2016/10/18/winklevoss-state-street-bitcoin-etf-administrator/

Whats happening ?

Why is BTC skyrocketting ?

5180 is the level to break.

If it gets through that then we really are on a planetary mission that breaks 3 years of correcting.

Must be all the Chinese devaluations.

The 3 and 5 minute charts are correcting.

Lets see what happens at the end of that. Maybe 15, 20 minutes.

EDIT: Stabilising.

3-minute chart correction completing.

Wait for the 5-minute next and the hound may be back off the leash...

Earwig. Low.

The 1-week Bitcoin/$USD chart correction is nearing completion. That chart range started correcting around the end of July when the big dump-down from the 5180 Hobular high occured.

That correction also painted the handle onto the humungous 3-year cup and handle formation thats been forming since the 2013 China-driven $1200 ATH.

The timing of events seems to be pointing to a perfect storm towards the end of the year, possibly consisting of Lightning Network arrival, Segwit, BTC Developer & mining consensus putting previous confrontations to bed and an array of chart technicals going green. Things would then be in place for the Wrinklyboss ETF to turn up and light the touchpaper on the tinder pile.

That isn't "competition". All they've done is build a conveyor belt for fiat. "Blockchain tech" isn't worth nothin - any man and his dog can build a network using "blockchain tech" to carry stuff around the place.

What they can't do is attract 2 Million Terrahashes of decentralised computing power to the point that that blockchain's tokens become a monetary unit in their own right, independent of any trusted third party backer or sovereign currency denomination.

I doubt it.

If you operate a backed currency you're far more efficient using a secure SQL server as the banks will soon find out to their cost once the "we're blockchain friendly" bandwagon gimmickery has worn off.

The whole point of a blockchain is that it's designed to support peer-to-peer, unbacked tokens. Ergo, it's not much use for transporting non peer-to-peer, backed ones. Even if it does shave something off their clearing expenses it isn't going to change the nature of their money which will still require willing debtors to queue up and underwrite it with their future labour. (And those are in increasingly short supply).

I see a possibility but I'm afraid I can't guarantee anything  Wink

Factors that would make the outcome more favourable include:

 • Major Segwit/Lightning news followed by some big mainstream monetary adopter
 • Wintlygross ETF lift-off
 • Worldwide economic collapse and implosion of the debt bubble
 • Further massive Chinese devaluation of offshore Yuan followed by a FED response of renewed QE to offset a stock-market slump on growth fears
 • The penny finally dropping with major gold bugs like SD Metals and Mike Baloney that Gold has a problem with travelling through wires and has therefore lost its tenet monetary property

Take your pick !

Just to clarify what "tenet" of Gold's properties I was referring to there...



(Sorry Mike. Loved your videos. The theory's perfect, you just identified the wrong asset. EVIDENCE: Physical Gold is over-levered >300:1 by its electronic counterpart and will remain so due to problems with "portability". Imagine if it was still a bearer instrument like Bitcoin. You'd be looking at > $quarter of a million per ounce by now).

I actually agree with this. I see 2 types of "money". One with price stability and goods denomination as its priority which (it necessarily follows) must be inflationary. One for long term store of value which (it necessarily follows) must be deflationary.

Bitcoin therefore falls in the latter category due to its limited supply and, as you say, may be used as a capital base to back other monetary exchange media.


What about "bearer token" status ? Isn't that kind of the elephant in the room here ? Why do you think gold has lost the ability to anchor its value to its restricted supply ? This is something many people seem to take for granted - because they say that gold has "worked for thousands of years" so it must work now. The only problem with that is that we had physical markets for thousands of years and we don't anymore, so there's no longer the same basis for gold's monetary value - at least as far as it's derived from its monetary properties.

Gold is not the ultimate money. It has failed miserably, for example, to signal the massive amounts of fiat monetary expansion that's gone on in recent years which is one of its primary roles as a monetary asset. It has also suffered massively from the decoupling of ownership transfer and possession transfer in its significant markets. I think people say that "Gold is the ultimate money" simply because thats just something that everybody says. But when you actually analyse it, it isn't.

I'd say that it will still be good for sovereigns - because they do actually take possession when it matters, like China is doing. But apart from backing national currencies, its role is now limited as is it's upside compared to an asset like Bitcoin IMO.

Which type of gold ?

The paper type ? It's available in unlimited supply.

The physical type ? It's un-tradeable in any significant quantity.

These are now two distinct assets which is something most gold bugs have failed to realise. Yet one can't work without the other which means they act as a mutual attenuator on each other's value.

The most favourable trading conditions gold has ever seen since the great depression have just occurred during the last 8 years, yet it lost value. Maybe people who still promote it as a 'safe haven' should start asking themselves why  

Because modern societies don't like prices floating all over the place due to a fixed supply monetary base. It makes it impossible to plan and you'd have loads of manufacturing businesses, for example, simply going bust. Even if you did have a fixed supply they'd just invest in a huge amount of hedging derivatives to minimise their exposure to price volatility and that would inflate the effective money supply instead.

As economies expand, demands for liquidity have to be met. They can either be met by expanding and contracting the money supply (and keeping prices relatively stable) or by price inflation - which will just carry a similar cost in terms of adverse commercial conditions, bankruptcies and localised losses. If you're a car manufacturer, you're more interested in the "stable price" type of money. If you're a long term saver then you're more interested in the "stable supply" type of money. There have always been these two types and always will be.


Well you can't sell the gold bar under your bed to a customer on the other side of the planet and deliver it at the same time, so it isn't tradable everywhere. You can transfer ownership to them instantly but not possession.

The whole basis of gold's value traditionally is that it was a bearer token where possession and ownership were synonymous. If you like, in that sense it was the "physical bitcoin" of its day. But it is no longer able to perform that role because we've moved to electronic platforms and left the physical behind. That's the reason it failed to gain anything over the last 8 years of money printing.

Naeborra. I had to 'think it over' as well.

It's sometimes useful to see these two sides to monetary measure another way...in terms of price denomination. Fiat currency is really just a basis for denominating prices rather than storing value. Just a number. If people want to store value over time, it's their responsibility to convert their fiat denominated credit (just a number) into a tangible monetary commodity which may be a completely different thing.

For example, if you look around the world, many national currencies have weights, measures or metals as their name. Peseta, Pound, Nickel etc. But these are now just price denomination units and no longer bear any relation to their original commodity base. All the same, it's the commodity you still need to hold to store value. As its value increases, more "denominational units" will be created to reflect that new value.

Here's Christine Lagarde talking about the importance of price denomination in the context of the Remnimbi and the IMF's SDR.

Hobular market moves afoot again.

It's reaching for that Oct 23rd 4575 shot. 2-Hour momentum moveing average crossing over. If that pushes the 4-hour chart into the green then it may have a chance.

The expectations are there at least. Alts are dumping.

*****

We're up to 4550 now. 25 to go. Volume coming up....4560...

...thats it. We've broken out of that little 3-day correction.

Bears were not able to push it down enough to correct beyond the 4-hour chart which is now about to turn positive again. Lets see what happens now. We need that 5180 for escape velocity.

Because the American exchanges are meaningless in terms of trend.

They just follow the lead of the Chinese. Always have.

Yuan devaluations get reflected quite quickly in the Bitcoin price.

You maybe right, but I've never regarded the US as much more than an idle observer when it comes to bitcoin volume. Technology-wise it's different of course since much, if not most of the developmental work is Western based.

In particular, the entire trading pattern of the last 2.5 years is largely characterised by the two 2013 spikes, one of which ostensibly originated in the Mediteranean Countries (April) and the other in China (December). Even when that bubble burst it co-incided with the Chinese authorities snap-regulating the fiat gateways in that country.

I think the rest of the world just got dragged along for the ride.

Wow. That was some mega dump.

It all came back out in seconds flat. 8000 BTC = $5.2 Million dump in 1 minute ?

You don't do that to maximise gain. You do it to quench rallies.

LoL !

Indeed.

It's just that if you DO happen to be watching charts instead of studying fundamentals and reading the news, it's quite easy to see where the action is and where it isn't since they're all lined up there in front of you with no more than a button click between them  


Hey, this is bitcointalk. Didn't you know that "conspiratorial and simplistic thinking" were de-rigueur ? 

I had a theory about those dumps a while back. I referred to them as the "borgan quench" 

Just an idle fantasy about armies of fed officials or PBOC staffers equipped with huge reserves of BTC who's sole purpose was to quench the market and blunt bullish sentiment at strategic moments in order to engender a chronic feeling of hopelessness in genuine traders.

The market seems to be digging itself out of the hole now though.

Just for clarifiaction, it was a joke 

Buoyancy is recovering. Already back at 4540. (Quoting the more authoritative exchanges  )

I'm not. I just can't tell you what the price is going to be in 2 months time and am not a fast enough typist to say so  

I'd say $2000 by the end of 2018.

Thats a 1200% rise in 18 months. If it did happen that fast you'd at least have a retrace to $2000-$3000. (And it ain't gonna happen without a fiat-collapse scenario).

Markets moving again.

Hobular 4-Hour correction complete and it's having another crack at the 4600 level where it got hobbled last night.

+1

Look at the 1-week chart. Even better.....and the 1-Day, and the 12-hour and the 6-hour and the 4-hour.

Never seen BTC clear water ahead like that on all ranges at once.

(P.S. You know something's up when BTCe gets ahead of stamp and within only $10 of China during a rise  ).

Stamp + BTCe hitting $670.

Bears losing control of the market. That 8k BTC dump last night just disappeared into the crowd. Markets manoeuvring.

All Western exchanges over 670 now.

TX backlog approaching 50,000. Must be spamming. Just up the fee.

I'd say $760 is where the big resistance is.

I just think it could be simple trading technicals thats driving this movement.

There are a load of them "clicking into place" including a confluence of short and long term.

I think I'd probably see $1000 as a "lighting the touchpaper" point rather than resistance. The fact that it got back there after 3 years would raise a lot of eyebrows. Not least all those clueless University economists who wrote Bitcoin off back then due to "not being backed".

Rally could be because of new Macbook Pros coming out tomorrow.

There are many whales who do not want to pay more than 1 BTC for a new Macbook Pro 

Bitcoin reflecting devaluation in offshore Yuan.

http://ftalphaville.ft.com/2016/10/26/2178098/bitcoin-as-a-chinese-capital-outflow-proxy/

(Meanwhile, Gold reflecting the growth of a dead sheep. Lost another half percent today. I'm sure the bugs will be able to paint a positive spin on the "metals" though).

...only if the pump is driven by an insolvent exchange trading "fake" BTC that it doesn't have 

MT Gox.

I think once the Gox debacle became public, people looked back and saw the 2013 high in a different light and that it would never have got so high without the fake trading on Gox. (Thats also why it crashed so hard and for so long).

Zerohedge uping the ante on Bitcoin bullishness.

http://www.zerohedge.com/news/2016-10-27/needham-raises-bitcoin-price-target-848-heres-why

Hobular $700 incoming.

(Chinese bitcoin traders + Swiss trains = a match made in heaven, surely)

It's the handle on the 2-year cup.

Volume is supposed to build towards the exit from the handle.

Volume is building towards the exit from the handle.

Ah, I had forgotten about the Finex hack. Yeah, I see it now on the chart  - that was that big dump earlier in the pattern.

It's probably just made the demand even more compressed.

Hobular trading arriving at the magic 5000 CNY which is entering 2013 territory.

Then we're looking for 5180 for SRB ignition.

We seem to be heading for the great 5180 - out of the handle at speed and volume.

Why ?

There've been plenty of retracements.

What about this ? Isn't this a retracement ?

Well look at it this way:

1. The great 2-year cup and handle formation is complete.

2. You are supposed to need a big volume ramp-up to break out of the cup segment of the formation - what do we have here ?...

3. You need some fundamentals justification to support the technicals: = Yen devaluations, Bitcoin didn't collapse due to limited blocksize, scaling technologies imminent and continued adoption growth (Basically it has got through the next "rights of passage" phase)

4. Other stuff

Could be - i.e. you're saying that every handle is also a potential "cup" a la fractal formation ?

I just think traders are sick of selling now and realise the writing's on the wall for the bear market. Bitcoin is doing everything gold's supposed to be doing. The world is a very big place. Bitcoin is a very small market. People are going to start noticing it "didn't die".

Seems pretty reliable to me. I prefer to rely on charts than bitcointalk urban myths about "faked volume".

Ok, but you'd have to go a long way to convince me that the fake element is in any way dominant. All markets contain a degree of synthesised volume for one reason or another. The question is, can one player with limited budget dominate the character of the market over the other 100,000 ?

Thats why I don't hold much store by these kind of rumours. They're just a myth that grows legs on places like bitcointalk and for which nobody ever bothers to try to quantify.

You can see a distinct trend on very long range chart. The problem with faking the volume on any significant scale is that you also need to fake the price since one is a product of the other and these are genuine trades (unless the actual statistics are fakes which of course would be a different matter).

Ok, we are back over 5000 CNY. The 5180 SRB ignition level is in sight.

Ok, I'll take the health warning on the volume trends.

I just think that people need to be more rigorous about backing up such statements. You yourself have asserted you don't like "binary statements" (possibly you referred to them as "absolutes"). Well think about how much trading would be required to actually dominate the volume trends - you'd have to effectively render the entire market as insignificant. You'd be dominating the price as well as volume and the costs (losses) would be enormous.

The only way to reasonably do it would be to fake the whole market IMO - in other words a fractional reserve basis as you say.

All the same, there isn't the same volume pattern on Western exchanges so that does add weight to your view.

I'll keep an open mind on it  

What we don't want is a double top here - bouncing off the resistance again. That would mean going back to the day job and abandoning the more interesting activity of wall observing for another while.

We need bitcoin to break out of that U-bend with buoyancy. It has bounced once and come around for another shot with the battering ram. It's made a nice job of painting that shape I must say.

I think it could afford another couple of small retraces, but check this...as far as trading momentum goes, things could not be better placed. We've just made bullish exits from corrections in both the 4 hour and 6 hour chart.

The ingredients are all there. I could not have wished for more favourable winds if I had painted the charts myself. It would be a brave trader that started shorting this side of that breakout level IMHO.

Panic buying setting in.

That 5180's coming. I need to get my whale graphic ready...

Ok, taking my seat again for the next round incoming.

Yes - sounds interesting. What factors would you use to weight them ?

Hello.

Everyone enjoy the crash ?

Exchanges now bootifly arb'd. Bitcoin poised.

May I ask what planet you've been living on for the last few years out of interest ?

"Zero evidence" planet sounds pretty attractive. I'll have to look that up

In the meantime I must be stuck with the same "religious" delusions as AlexGR. Maybe if I close my eyes and ears....

I can only say I agree with ImI on price predictions and disagree on puppetry.

We could be about to make another run at it.

4 and 6 hour chart momentums now crossed over to the upside. 12 hour chart just on the verge. $700 launch pad.

Looks promising. We need 2 break that all important 5180.

I haven't been able to post my whale graphic yet. I made it weeks ago and thought I'd be able to deploy it then but the trading balked just on the cusp of breaking through resistance.

I remain hopeful.

Earwig. Lo.

Possible Trump-NASDAQ-fuelled main engine ignition incoming with helpful nudge from collapsing offshore Yuan. SRB's will kick in @ 5180 according to my advanced theory.

BTC now about to leave the 4000 CNY trading range for the last time ever in the existence of mankind.

...done.

Goodbye 4000 CNY trading range. Hello rising Western sovereign bond yields.

Indeed.

Major BTC smash & grab ahead. Better get out of the way.

Looking at the 1 week chart which spans a time period of 3 years, that 2013 spike is now looking seriously threatened. Like as in, about to get comprehensively demolished.

It's the handle at the end of the big cup that does it. The thing is, we barely spent more than a couple of weeks in total above the current level back then. Meanwhile, bitcoin has had 3 years of growth, a ton of competition that didn't even dent its marketcap and 4 months trading at or near these levels in a very bullish "cup" end of a 2 year cup & handle trading pattern.

Also, a virtuous cycle gets set up once the rise gains attention in the media.

P.S. While I've been writing, Huobi now at $760 nearly. BTC getting scarce cos everyone knows whats on the cards.

@soullyG, that wasn't one of my chart postings.

Haven't seen that one before.

Working on the sellwall.

It would appear to be breaking out instead...

It's now above flagpole level.

If we can get through CNY 5420 then the January 2014 resistance field will start to turn into support.

That will give a firm bedrock for major new buy-ins and we may see a certain point where SRBs ignite to create 1 humumgous candle that propels us out of 2013 ATH sphere of gravity.

Lets see if this 15-minute MACD manages to crossover or not.

Also, we must constantly flip back to the 1-week chart to check the big picture and see how we're doing in breaking out of that 2-year cup & handle. Things are getting interestign now because we're getting above that big resistance from Jan 2014 and into the thinner, more rarefied air

Ok. 5276. 1 15-minute green bar on the MACD momentum histogram.

UPDATE: Whoooah

SRBs kicking in. $770 Huobi. We need 5420 now to leave 2 1-week full candles behind from 2014 and have only 2 left plus the wicks.

LoL ! Thot you might be.

Might be safer to wait at least for the 1-hour momentum chart correction to kick in before dumping anything. I usually go for the 4-hour cos I just don't have the cojones nor the time for anything shorter range  

Neither of those look like being on the nearterm horizon right now. (Although you can always get a whale dumper appearing out of nowhere, specially in China).

I might dump a couple when it gets to $6000.

Hedgefunds will surely be eyeballing that 2-year trading pattern. It's arrived at the entry point they've been waiting for, now get buying.

Hugh Hendry already has a few in his back pocket but he needs to now go full rabbit hole.

Things are escalating quickly now that we've escaped that 2-year pattern.

$100 is the new $10.

It's actually this thread that controls the market.

ALL large market players read this thread - including multi million dollar hedge funds and all known Chinese exchange traders. If they read hype'y "to the moon" posts with lots of pictures of rockets and charts with converging lines sloping upwards at 45 degrees and stuff then they panic buy. If they read fuddy-duddy comments about bubbles bursting and misery then they execute those massive Hobular dumps that leave big red stains on the charts.

We don't want any of that so watch what you post

It would open up some interesting arbitrage opportunities  

This little correction looks like it's desperate to complete.

1 hour chart is only halfway through but price is back on the rise again. The 1-hour momentum is holding it down, constraining it's buoyancy like the anchors on a hot air balloon that's already at full temperature. Looks like it's only 4 or 5 bars away from green-lighting another possible surge.

Peter Thiel getting onto a US presidential transition team is pretty phenomenal. As far as the Bitconi dimension goes it's a bit like "Vatican Magazine" accepting a full page Durex commercial on it's centre page IMO.

Whatever the politics of the situation, I think one characteristic of Trump is that he values practical solutions at least as much, if not more, than ideological objectives. He took to Twitter like a duck to water and I'm sure he'll be equally open minded about the "new monetary frontier".

Ok, thats enough fundamentals for now. Back to wall observing.

Games now going with serve.

Major stuff.

What happened to bitcoinchannel.com ?

The principal rolling newsfeed for all bitcion related stuff ? I got all my news about everything from there.

I'm now in the dark.

That 1-week chart (the one that spans all the way back to the 2013 spike) really does look like it's wanting to majourly break out.

The last 2 peaks are now starting to dwarf the 2013 peak in terms of width and there's also 3 years of fundamentals to be priced in. The principle one being that Bitcoin didn't "die" ! LoL.

What did everyone say back in the ultra-speculative period of 1st mainstream wave in 2013-14 ?

...."It's either worth zero or at least 6 figures".

Well the zero-option is kind of starting to fade.

Bitcoin skyrocketing.

Always remember the golden rule.

Most people only want to invest when things are expensive, not when they're cheap. Only a minority of the population have the presence of mind to decouple price from value.

Therefore there will come a point when the rally becomes self-sustaining. The more expensive it gets the more investment it attracts. That point is at hand.

EDIT: Stamp at $770, Hobular trading @ $796

Most bullish chart ever. Breakout after 3 year consolidation.

Not a double top.

When is Lightning going to get launched for "ordinary people" to try ?

When is Segwit getting launched ?

Is it getting launched ?

Thanks PoolMinor

Anyone noticed the increase in hashrate this year ?

Incredible.

Bitcoin smash and grab.

The market seems to have decided that 4-digit bitcoin is now imminent. $100 is now the new $10 in terms of revaluation increments.

By the way, the reason for the latest rise is this little comment on last night's Zerohedge article about bitcoin.

I always wondered what possesses people to do that.

This isn't just some minor "rise". This is a 3 YEAR consolidation concluding in a strategic breakout to the upside. It might not correct now till the mid 1000's (i.e. $1500) and thats being conservative IMO. When you look at historical breakouts after long periods of consolidation it should go to around $6000, correct back to $2000 than stabilise around $3000.

I've no idea any more than the next person where this is going but it's probably the least profitable time in history to be dumping or shorting bitcoin IMO Not to mention that there are ETF's in the works, Lightning news to come new adoption from the capitalisation etc.

I'd say, if you've got it, hang onto it !

Hobular 6-hr MACD crossing to the upside within $35 striking distance of $1000 ?

Looks interesting.

Bitcoin going ballistic.

Huobi at $1030.

Mainstream getting up & running with propaganda countermeasures.

https://www.ft.com/content/b5d66ed8-d1b3-11e6-b06b-680c49b4b4c0

https://www.technologyreview.com/s/603295/why-bitcoins-1000-value-doesnt-matter/

Hopefully what's happening now is we're leaving behind 3-figure bitcoin and the scale is getting recalibrated - just as it did when we left single digit bitcoin.

In those days, a revaluation from $2 to $8 was a huge rally.

Now we're going to be going up in $100 increments. That 2013-2016 dip will look like a minor correction in a few months.

(Hobular BTC now over $1200 as I type. No Gox).

Yes, me.

Hobular BTC blasting past $1200 like it was a tank rolling over 1-foot hedge.

I find it kind of unbelievable that a silly note from the PBOC is the reason for the crash. As if people didn't see that coming. The 2013/14 bubble was pricked by the PBOC and the market took 3 years to recover. I don't think a 3 year consollidation is so flimsy as to just roll over and die on one predictable PBOC memo.

Looks more like a simple bit of Huobi whalery to me (possibly with PBOC co-operation, who knows )

We've seen these mega dumps before in the last few months and the market just consolidates for a while and moves on. This one was bigger because the rise was bigger.

Lets see what happens. 2hr Hobular momentum histogram about to go to the upside which will help to pull the 4 and 6-hour charts round. After that we'll start to see what the longer term trend is.

It indicates that traders think the price is about to rise and are placing asks at levels where they can earn quick returns on the spikes, buying back in very quickly after the sell. (Market depth often works opposite to expected trends in this way).

Momentum stabilising nicely after that dump. Continuing to get pulled around. 2-hour chart is already green. Off order-book bids hovering and waiting for the right place to "get in".

I never panic sell bitcoin.

Typical Huobi square trading "trapeze" pattern. Shorters blasting down the market and then give up after a while & cover.

Just see it as a "toughening up" process.

The more knocks Bitcoin takes the less effective they'll be. Christ we're still above $700 and unlikely to be facing another 2-year dip to $200 so things are improving

We already had this in 2013. We need to get to the point where the PBOC is not able knock it over with a feather.

This is starting to look like a Gox situation to me.

The Chinese exchanges may be massively over levered and are pushing the price down in order to mitigate their fractional reserve at a lower cost prior to the inspections.

Lets see what happens when people start trying to make withdrawals.

It's the exchanges that are doing it themselves IMO.

Look at Bitstamp - barely moves in comparison. The Chinese exchanges must be short of bitcoin to back their registered deposits. The Gox fingerprint is there. Vertical drop-offs from nowhere and high volume buybacks at the base of each.

Could off-course be regular shorting but the extremity of it suggests otherwise to me. (Well I'm watching Huobi - don't know about the other ones).

Remember - we don't know what's going on here. We don't know if it's real bitcoin that's being traded or not.

If you run an exchange it's a peice of cake to set yourself up a few hundred fake accounts, populate them with either BTC or Fiat "fake balances" and manipulate the price to kingdom come.

We don't know what the real supply/demand situation is. (In particular the "supply" bit).

rotfwl ! 

Get ready for the "temporary halt on withdrawals while we fix a technical glitch" notices followed by Scottish guys pitching their tents up around Exchange HQ with "give us our bitcoin back" plackards around their necks  

I've been wondering about those huge gaps between the Huobi price and the rest of the market during the last month.

Ominously relevant observation from the past. Listen carefully  

This is why I'm not too worried about the crash.

It isn't 2013 anymore. The challenges we are seeing from PBOC / manipulation / whatever are just part of growing up. Expect more. Like I said - the more knocks it takes the less harm they do.

Hey, I've just noticed a pattern that this crash fits into, but it's only visible at very long range. (You need a big screen preferably to see this - pull the browser page out wide if you can to grow the image to full size. Sorry I couldn't get the pattern very visible at small scale).

This correction may not be as bearish as we think and seems to fall into a "family" of profit taking moves associated with the rise that started back around July 2015.

It appears that every 7-8 months (every 4-5 months earlier in the rise) there's a big profit take like this which always happens at the top of a spike when the market gets ahead of itself. (I call them "propellor corrections" because they look like an aircraft propellor from side on since the price corrects to about the same distance below the trend line as the 'overheat' got above it). All the same there's a longer, underlying trend where the upwards revaluation grows steadily steeper, even despite these crashes along the way.

When the pressure-relief gasket blows on these bubbles it always corrects to just below the top of the previous propellor pattern. Same every time but increasing in size. Then there's a period of consolidation, followed by a slow rise, then steep rise and another gasket-blow.

Each time the correction gets bigger, but it still seems to stick to the rule of dropping to just below the last spike so that the growth trend isn't broken. I now think I'm not the only one to have noticed this and that big players are actively trading this pattern, watching for the overheat-spike and knowing exactly when to profit take, driving that bubble into full temporary reverse with shorts for maximum profit. But they also must know how far to take it because the last spike gives the reference level.

This one was perfectly timed - 7 months exactly.

Judging by its size and perfectly placed timing, we could be in for a very big rise over the next 8 months if the long term trend continues because the vertical distance between each "overheat" phase increases each time by about 60% to 70%.

Just sayin. Context is everything

Well according to this analysis the bottom is around 5200, with a sharp retrace back up to the propellor "nose" which would be around 6700 CNY (~$900-$950 dollars), followed by a slow retrace back down to half the lower propellor blade (5900 CNY = $750) and then starting the next bubble from there which may go to $2000 by July.

Of course, that's just according to this analysis. You need to look at several different perspectives to get a fuller picture of the possibilities because there's no telling if this pattern will be broken or not.

It's one theory = we can follow it and see.

I previously thought that too but I've slightly changed my mind about this.

The 2013 bubble was a single huge run-up where the bubble burst and turned immediately into a long term bear market.

That's not happening this time.

For a start, the current "run-up" has lasted 18 months so far and has been much more sedate. It started mid-2015 off $200. There have been periodic bubbles which burst (see chart above) but unlike the 2013 spike, none of them have reversed the trend so far and having made that observation above I now have no reason to believe that this one will either. It seems to have bottom-spiked just at the right place to be consistent with previous "overheat conditions".

If it really starts to dig in past the previous spike (i.e., say in the 4000 CNY range) then I'll have to change my view obviously.

So I think the reason that it's only taken 1 week to fall below the previous spike is simply because it has far less distance to go since the growth is more natural and sustainable this time.

P.S. You can see the Huobi traders - they've taken it very quickly and confidently down to 5200 CNY but they appear scared to short it beyond that point because that would be defying the underlying trend and expose themselves to serious risk of having their shorts fried for breakfast. Lets see what happens over the next 10 days if it springs back up to the propeller "nose" or not with covering.

Here's a close-up of that "propellor" correction pattern I was referring to earlier.

2 of them compared. Now go back and see them in context of that other big chart and a somewhat informative picture starts to emerge.

Well I sure as hell can't be bothered to wait another 3 years for things to get back to bullish. In Jan 2014 I thought it might take 6 weeks  

I'd be quicker learning the violin to concert standard for kicks.

At least there's some developments in fundamentals around the corner. (But then again, Overstock adopted Bitcoin in 2014 and it just kept tanking).

+1

People must stay calm and monitor events.

Look at this. What self-preserving trader gets out of a market like that at a right angle ?

They must need the coins.

Latest Bill Holter doom porn.

Maybe that'll improve things

Chutes deployed ?

Greg Manarrino seems to be endorsing the view I outlined in my post of last night. Tells people to relax and hold (although this looks like being recorded before the really big dip. Doesn't matter - the principle still holds).

Lets hope the trend is allowed to grow back organically and Huobi doesn't vandalise it again on the way up.

Well Huobi's having a wee go at puncturing that rally, but it's not quite got the "push-it-off-the-cliff-already" destructive gusto it had yesterday. Maybe wants to build up a bit more of a head of steam first.

Looks like your wedge vs my 5200 support line.

I hope your wrong cos I need to pay a few bills and am holding Clambering back up the castle wall - I just hope nobody's waiting with a big bucket of boiling hot tar above.

(P.S. What's the breakout level according to your analysis ?)

Look folks, the Christmas crash is turning out to be one of those "overheat fan" type corrections after all, as described in this post.

See also long range view here.

Of course the press won't report the recovery because as far as they're concerned, anything outside the white box just didn't happen.

Look at the tight arbitradge now between West and East.

Barely a dollar in it.

Also, Hobular volume is about an eighth of what it was.

Is that the effect of banning margin trading ?

We're back at December 23rd prices.

Stamp $906
Hobular $906

Incredible.

...oops, now $908. Skyrocketting in tandem.

Yes. It is indeed the Huobi Bitcoin exchange.

Apologies for my eccentric take on common terminology. Gives me occasional boredom relief.

What's "different this time" is that we're at the right end of a humungous great 3-year cup & handle trading pattern instead of the left end  

Cups and handles are fractal patterns that you can see at any scale. Take your pick and we can sell each other the bridge  

One theory:

https://bitcointalk.org/index.php?topic=178336.msg17475939#msg17475939

And:

Stamp motoring now.

$2 to go. Volume increasing. ~300 coins left.

Grab'm by the p*. Make Bitcoin great again  <-- this message will self destruct in 12 seconds b4 mods arrive.
 

Thats it.

We have now transited permanently into the realm of 4-figure BTC, never to return.

We will never again see sub $1000 BTC. Double top on the 12-hour, concluded 3-year consolidation from last ATH. Games now going with serve and increments of $100

$1k: Zerohedge audience was informed within seconds.

Earwig. Low.

Translation for the deaf   

What will happen now is that it's gonna get priced in and then there will be a huge dump if it doesn't get approved.

r.o.t.f.w.l. !

I nearly did just reading that comment 

Earwig. Low.

Stakes raised. Price targets now $3,678 or $551. Take your pick

Bitstamp back above thingmy level.

It's all relative.

If it's going to rally up to $6000 then $50 a day is "slow & steady".


$1163 ? (Bitstamp 2013)

Is that a $1 Million dollar buywall I see on stamp right now ? (1001 BTC)

Isn't this to do with antpool mining a BU block ?

What is this, just out of interest ?

https://www.sec.gov/rules/sro/batsbzx/2017/34-80169.pdf

Simple T/A.

Market had become overbought at the higher ranges (12 hour, 1 Day) after passing around $1010. It continued on up due to positive momentum at the lower ranges.

Once the 6-hour, 4-hour MACD crossed to the downside it was inevitable that a correction was required to consolidate. That triggered the correction at the longer ranges as well, so consolidation now in progress.

That's not very friendly.

Bullish post...bearish post...bullish post...bearish post...

That is the most ridiculous logic I've heard in a long time.

(In fact since someone told me Monero was good cos you "would'nt want to know you had Hitler's coins in your wallet" )

A business is a business.

It pays taxes and employs people largely in the country where it's registered, regardless of what the substance of its activities are. Reputations and precedents are also at stake.

The Illuminati may or may not be on Trump's side and may or may not like Bitcoin, but business is business. It's getting approved.

Bitcoin price recovering nicely.

Skyrocket imminent.

The whole thing's a big hoax IMO. The giveaway is the fact that so much market movement is achievable with only the cost of signalling which is almost nothing. Who gives a f* about signalling.

Even the hashrate is only the low hanging fruit. The next 5% is 10 times harder to get and the next 5% after that 10 times harder again. Easy drama.

If there was really a threat it would be double.

BU signalling is the equivalent of a false sellwall in markets.

Will get pulled once Bitmain Tech Limited are done with their buying.

I don't understand.

How come the signalling is going BCU's way and the hashrate is going BCC's way now ?

I'm enjoying it.

I always thought Bitcoin would become more valuable the more times it pushed the envelope and scotched taboos.

On taboo is a contentious hardfork - or at least the serious prospect of one and how it gets resolved. It's just something that has to be explored before the blockchain is allowed to carry a value of £100,000 per coin.

Rights of passage phase. There's been plenty of them and they all seemed apocalyptic at the time.

The BU drama is a hoax - fuelled by the low cost of signalling. Nevertheless, it's had the effect of freaking a few people out. So I'd say it's more of a sociological phenomenon than a technological one.

Just another day at the office.

I bought Dash 3 years ago because I liked its monetary model.

On chain scaling roadmapped. Transparent blockchain like bitcoin. 2-tier protocol which makes possible all the stuff that BCC is having to do off chain.

Critiscisms like 'bank of Duffield' now look a bit silly against the current backdrop of events. You could hardly have a greater contrast (or in financial terms 'hedge') with what's happening in Bitcoin.

The retrace up the way is happening because the it's becoming apparent that BU had about a snowballs hope in hell of making any significant dent in hashpower, who's migratory trends have now reversed.

They couldn't event dent the signalling to within a remote hope and that's almost cost-free.

Flashback to June 2015:



P.S. Greg Maxwell had the benefit of hindsight at the time. It was called the Bretton Woods system.

The next correction will be down to $3k from a $6k spike.

I don't get the logic of this.

The reason metals do sh*t these days is because their market has split (into a liquid paper on the one hand and illiquid physical on the other) and they've lost their original monetary function as a bearer token. That would be the case whether inflation or deflation prevailed.

A deflationary shock would presumably be the result either of widespread recession or some kind of credit crunch/mass default scenario without the usual central bank printing spree in response. In that case cryptos would do well due the fact that they're not debt-backed and therefore represent a safe destination for fleeing capital.

By what mechanics do you see them getting 'slaughtered' ?

Top 3 assets doing better than Bitcoin & trading against the hurricane.

Bitbay in particular is probably the most undervalued asset on the planet right now, so nobody wants to dump it



(P.S. Ratios are against BTC, not $USD).

Indeed. And it's been knocked off the top spot of "coins gaining faster than bitcoin" anyway since I posted that...



( %'ages Against BTC)

Stamp heading up again after some consolidation. 1-Hour momentum about to conclude its correction.

BAY also up against Bitcoin ! Bitcoin up, Bitbay up. Bitcoin down, Bitbay up.

Bitbay: Riding the bitcoin wave while levering it and amplifying it thanks to 3.5 year's careful and painstaking work on a unique dedicated asset trading device being slowly but surely priced in. (And it's not even on the launchpad yet)

Last orders at the bar @ 3-digit sats.

Worldwide malware bitcoin ransom attacks.

Clearly timed by gov-security services to give them a blank cheque to bring in huge new anti-bitcoin legislation

http://www.elperiodico.com/es/noticias/sociedad/ataque-informatico-masivo-infecta-las-grandes-empresas-espana-6033534

Markets unaffected.

Looks like the dip's being majorly bought.

Yeah. Agree.

This is a once-every-4-years rally. Those don't splutter out at a mere multiple of 2.

Bitcoin skyrocketing.

The dips are being so heavily bought that it's having trouble even correcting at the longer ranges.

Bitcoin Eclectic F*ckTard ?

I'm sure he'll get back to you within seconds

If, on the other hand you mean the bitcoin Exchange Traded Fund, they may take a little longer.

A week is a long time to you ?

Some of us have been watching this for 4 years.

The thing is, if one is majorly hedged in alts, you never loose.

They never fail to rally on the dips. Bear market ? Alts to the moon.

4-Hour MACD now punching through. Lets see if it pulls the 6-hour with it.

Bitcoin trading bootifully into a nice tight triangle prior to breaking out of this, the first of 4 resting points on the way to $10k Bitcoin.

What's this ?

Bitcoin appears to be attempting to break out of its consolidation lane early. It's supposed to reverse down and re-stest a bit more of the triangle apex. There are eager buyers with orders down there who have been promised by market tradition that they may be allowed to hoover up trimmings off the table towards the end of the current packing phase. They will be severely upset not to get their served their usual porridge.

But Bitcoin/USD does not seem to have the patience for such quaint market protocols. It's eager to make progress.

Let us follow events with interest.

No.

It's no different from an airline offering free flights and then charging $20 at the airport for 'preferential boarding'. The queues would get long there as well. People would still be flying though.

I couldn't really care less about the backlog.

It isn't affecting the ability to move Bitcoin around.

Moving $3 in Bitcoin doesn't make much sense either. The blockchain is a limited resource. Like any other limited resource where there is contention for access it gets expensive.

There are payment systems in abundance for moving $3 around.

No, I mean regular payment networks that are supported in almost every corner shop and supermarket in the developed world.

The problem is that bitcoin (or any blockchain) cannot be a commercial payments system AND an efficient store of value both at once since the two objectives have priorities which are in conflict.

For a start, the purpose of a payment system is to clear trades, not to settle them and as such the commercial realm is adequately catered for by worldwide payment networks such as Visa and Mastercard. There is anything a blockchain can improve on there - even in terms of fees, because the merchant isn't paying those fees to clear the trade, they're paying for access to a massive customer base.

Secondly, it doesn't matter what you make the blocksize - 2 Mb, 16 Mb 32 Mb. It will still get full and still be spammable. Paying a $3 fee to transact on it isn't comparable to paying  2% fee with Visa because the merchant is purchasing different things in each case:

 • with Visa they aren't paying for realtime settlement, with bitcoin they are
 • with Bitcoin they aren't paying for access to a majority client base, with Visa they are
 • with Bitcoin they aren't paying for merchant services, with bitcoin they are

So with bitcoin it's all about settlement, not trade which is why its technical properties should be prioritised around monetary security, stability and confidence rather than commercial versatility.

Against that background, $3 is nothing for moving an asset that is fundamentally a deflationary store of value and that has liquidity worldwide.

Just keep the blocksize the same.

Bitcoin's job is to store value, not to be the next Visa. It *should* be expensive to move around.

We tend to couple in our minds the processes of "clearing a trade" and "making payment".

So, for example when you checkout of an order on Amazon the last thing you do is enter your credit card details and submit the page. We refer to that process as "paying".

But at an engineering level it isn't paying. It's simply getting the trade out of the way so the retailer can deal with the next trade and the customer can get on with their life. In that respect, the job of a 'payment system' is to clear trades like this. The process of settling them is necessarily decoupled because it has different priorities.

On the other hand if you wanted to move $100,000 from one bank to another you might pay a $500 fee. It's a completely different and distinct commercial/monetary process.

If you re-couple these processes in a retail situation (for example by introducing blockchain payments as POS), you just create a huge headache for retailers that would simply bring everything to a grinding halt due to the lack of performance and flexibility of a blockchain solution.

My point is that the fees people are complaining about are incorrectly compared with trading fees for payment of goods and services. When you look at the cost of moving $100,000 on the bitcoin network and take into account that it clears within an hour with good confirmations, the fees are positively cheap.

The advantage of keeping the blocksize at 1 Mb is that it consolidates Bitcoin's value proposition against alt coins. The only reason it has value is because it is unique, original and is seen as a 'safe haven'. In other words, unlike the altcoin world, the less that's done to it the better (obviously within reason as long as doing nothing doesn't actually do it damage).

They are not one and the same, not even remotely.

Thats one of the reasons this debate gets do confused, because people are clueless as to what the mechanics of a commercial trading network really are and are therefore ill equipped to prioritise the most appropriate properties that bitcoin should have. They think "store of value", "payment system", "commercial trade transaction", "monetary asset"...it's all the same thing.

Well, they are not all the same thing and can't be supported by a single monetary medium.

Growth of what ?

Bitcoin doesn't have to grow in trade usage for it to grow in value. That's because the more it establishes itself as the *only* crypto who's job it is to be a safe haven (as opposed to doing something useful) it will indeed grow in value which is why most of its investors are investing in it.

1 BTC that sits on the blockchain for 30 years and holds its value till the owner retires is doing a job. It's having 'use'.

They're not investing so they can buy their cornflakes with it.


It isn't expensive. It's cheap.

Bearstamp spending too much time reminiscing over Germany v Holland when it should be making progress with price.

Looking at the 4-year pattern it looks more like a rise to $4000+ then a retest of where we are now is what's on the cards.

Bearstamp has progressed to Argentina. Scotland Holland Archie Gemmill goal. That was the ATH for Scotland. Will it be for Bitcoin ?

...and the quick answer is NO. Bitcoin wants to get at least to Spain because it's interested in reliving Brazil vs Italy.

Bearstamp at 2k.

wtf are you talking about ?

This is nothing. The retrace is about right and essential to growth. If you want to avoid another 3 year bear market then this is exactly what's needed after a run-up like that. It was only christmas that we went past $1k. We're currently at 100% gain since then.

Maybe start worrying if it goes all the way back to $500.

Textbook propellor correction visible on the Bitcoin 1-Day and 3-Day charts.

Overheat fan activated to cool things down for a bit.

Perfection.

See earlier in the thread for full commentary on propellor fan-corrections:

Here and Here.

What about what Risto was saying that we need a red candle this week for the market to stay healthy ?


But it looks to me like we've only had 4 green weekly candles in a row - strictly speaking - but maybe he's dismissing the April 13th one as not significant enough.

Cryptowatch.

https://cryptowat.ch/bitstamp/btcusd

(Switch to 1W in the little pop-down menu at left end of top toolbar). They probably just have different reference days for the start of the week, so shows you it's really arbitrary whether we have 7 green candles or not.

According to the menu it's the 1Week. The 3 day one looks like this:

****** Amber Alert ******

Draghi is live right now talking about the implication of "decentralised ledgers" and the "blockchain" on the Euro Central bank's role as central issuer for the Euro.

Talking about 'fragmentation of the payments system' that 'may affect the efficiency of transmission mechanisms of monetary policy'. He's trying to make it sound constructive saying 'fintech' can assist the role of the credit markets in expanding the economy.

http://www.zerohedge.com/news/2017-05-29/watch-live-draghi-speaks-euro-parliament-makes-case-more-easing

Lots of ominous sounding inuendo, not planting his flag on one side or another. "Appropriate regulatory responses" required to mitigate risks to customers.

Apologies. You were right - the first one was a 3 Day.

Now fixed, but still only 5 greens.

I think he's alluding to the type of blockchain that lets bank do settlements. But those type of blockchains are better hosted on an SQL server.

Draghi's talk is looping back.

Just reaching the bit where he talks about "fintech & blockchains" now:

http://www.zerohedge.com/news/2017-05-29/watch-live-draghi-speaks-euro-parliament-makes-case-more-easing

EDIT: Too late. It's done, loop back in another 3 hours.

"Peer to Peer lending platforms" will provide a boost to growth = Mr Draghi is saying TRST is heading to the moon.

Whether that's true or not, it doesn't change a few things which make ETH a very risky investment when it gets expensive.

 • For a start, ETH is basically a technology asset, not a monetary one which gives it a much shorter time to obsolescence than bitcoin.

 • Secondly, it suffers from the "airgap" problem which Bitcoin doesn't. That is to say, there's a financial airgap between the base token and the equity that's being built on top of it.

 • Thirdly, it's already forked. So that kind of kills it anyway as far as any kind of long term store of value is concerned.

 • Fourthly, it's bug ridden. As I say, that's not so bad for a technology asset as long as it can successfully support the meta tokens that represent the business models it carried.

 • Fifthly, buying the ETH token itself (as opposed to say Golem, wetrust or Aragon meta tokens) you're effectively buying a chunk of a profit and loss account rather than a balance sheet. Not many people realise that, hence the FOMO, and they may never realise it. But the implication is that you're investing in the reproducible part that depends on monetary velocity as opposed to the unique part that is the equity layer. Hence its value is at the mercy of the same forces that drive GDP in a regular economy. i.e. the exact OPPOSITE of a safe haven store of value.

 • Sixthly, we are currently at "Peak Ethereum". It's about to get buried of a tsunami of competing smart contract blockchains, many of which are more advanced technologically having observed the issues Ethereum encountered. With monetary assets, being an original to market is an advantage. With technology assets it's the other way around - everyone that comes after you has the edge.

Should be enough for starters

They think they're buying the "next bitcoin" and as long as it's below BTC's marketcap then it's a buy.

Another time-bomb that Ethereum has:

https://www.youtube.com/watch?v=XNGzhWODF2s&t=1146

Pride comes before a fall and that remark forms an apt beacon that beckons its owner straight down a very deep crevice.

The reason Bitcoin took 18 months to get their is because the growth is real.
The reason Ethereum took 1-3 months is because the growth is concocted

....essentially from a toxic cocktail of bogus ICOs - based on no more that a whitepaper in many cases - plus the empty myth that Ethereum is about to replace Bitcoin as the defacto store of value for the cryptocurrency sphere.

But for it to do that it would had to have been born on the 9th of January 2009, derive its value purely from monetary storage as opposed to equity transport, preferably manifest as one head not two, and not be on the verge of technological obsolescence

(P.S. We all had our 1-3 month x10 gains a few years back, it's just that you're a bit late to the party)

There was only one significant problem to be solved and that was how to implement a pure monetary bearer token on an electronic platform.

Bitcoin is solving this problem successfully while Ethereum has been a disaster at it so far, on two counts in particular:

 • the original chain has already been reproduced so it can kiss goodbye any hope it ever had of long term store of value
 • it isn't a monetary asset, its value is implicit and based on the speculative monetary velocity generated by the business model contracts running on top of it

As regards merchant adoption and so on, you should familiarise yourself with the distinction between currencies and their underlying collateralising assets. Bitcoin doesn't need merchant adoption to do its job (store value). No collateralising asset does. It just needs to hold and accrue value long term against significant fiat currencies.

If you really think FOMO price spikes over a 3 month period is a sign of the long term viability of an electronic asset then the recommended cure is a quick look at coinmarketcap.com in internet archive for a comprehensive presentation of skeletons that were all about to be "the next bitcoin"  

Did you make that theory up all by yourself ?


I appreciate you need to live up to your handle but that may be taking it a bit far, even for irony  

The whole point of a store of value is that it isn't stable (because it has to accrue value against the prevailing stable currency). So bitcoin's volatility is a sign of 2 things:

1. that it's operating in a free market and is correctly able to reflect the balance of supply and demand

2. that it's growing very rapidly

Store of value and stable currency are mutually exclusive objectives. The only way you can make a currency "stable" in terms of purchasing power is to vary its supply in response to demand (otherwise it will be...volatile). On the other hand, the only way you can preserve value is to fix the supply.

Regarding your beloved "1-3 month gains", think it through for a moment. Why is Ether massively shooting up in value ?...because there's a tsunami of IPOs coming over the horizon, all of which require Ether to buy into them.

What will happen now that the IPO founders are bagholding a gazilion Ether at 2x the value it was against Bitcoin when they announced and also an ATH ?........cash out to BTC (or $USD), being the defacto store of value, since they know that's what everyone else will be doing.

(Not to mention a wave of competing blockchains that are about to make Ethereum look as obsolete as a record player when CDs came along).

If there are rapidly changing supply and demand dynamics then, yes, volatility is a sign of a free market as long as the price of the asset reflects those.

Always remember the best time to buy Ether is at the most monumentally FOMO'd multiple times all-time-high expensive spike of all time - specially if you are a Bitcoin whale and need to be "fleeced" of significant parts of your holdings  

Also remember that the best time to buy Ether is when it's just mature enough for hundreds of bubbly ICO's to be requiring millions of Ether in exchange for hot air, but not far enough down the line for all the competitors that are about to make its tech obsolete to be significantly visible over the horizon. (specially if you are a Bitcoin whale and need to be "fleeced".....).

There is a fork of Bitcoin that's doing that. It's called Dash.

That is just silly if I may say so. It's an asset not a religion.

The work being done there is a perfect hedge to bitcoin and there's possibly no better balanced team of people in crypto. I remember a short demonstration from about 2 years ago where the dev showed a proof of concept of thousands of TPS at the time.

The significance it has for bitcoin is that a large portion of the bitcoin holding population are unhappy about the separation of two of the key monetary properties: Store of value and Medium of Exchange. Amongst all the rabble and noise, you rarely hear this debate couched in monetary terms - i.e. in terms of properties of money. That is where the real issue lies.

Maintaining a conscious awareness of such design priorities and sticking to them is what will deliver an optimal solution IMO. Bitcoin have long thrown in the towel on this - it's all going offchain. Complaining about the "instamine" by comparison is like being concerned with the colour of the  lifeboat rather than whether it floats. This is crypto. They're all an "instamine scam" as far as the 99% of the world's population not yet invested is concerned.