RationalSpeculator



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This bull will try to shake you off. Hold tight!







Sr. MemberActivity: 294Merit: 250This bull will try to shake you off. Hold tight!

Re: We are repeating 2012, not 2011 September 16, 2013, 01:59:06 PM

Last edit: September 16, 2013, 02:09:12 PM by RationalSpeculator #16 Quote from: TERA on September 16, 2013, 11:52:19 AM







The low volume and the lack of significant bid depth on mtgox that continues to fail to fill in above 125 seems to confirm my suspicion that it isn't ready to go higher at this point. I think this ordeal with the bid depth was an inflection point for this Jul-Aug rally.

The rise of 2013 was much higher than the rise of 2012. Some people keep speaking of the obvious "line" on the log chart. However I am having trouble finding this line and in fact I can draw several lines which would allow btc to go much lower than it is now before going up again. I have plotted a couple for reference.The low volume and the lack of significant bid depth on mtgox that continues to fail to fill in above 125 seems to confirm my suspicion that it isn't ready to go higher at this point. I think this ordeal with the bid depth was an inflection point for this Jul-Aug rally.

I think your post is a very good one TERA.



Indeed the long term growth line points to lower prices.



If you draw this line from the start in 2010, prices will not fall that deep ($80). But if you draw this line from 2011 prices will fall very deep ($40).



The question is: will percentage growth continue to be the same, will it go down, or will it go up?



In the past it has gone down. As you can see in above chart percentage growth was a lot steeper/higher in 2010 than in 2011/2012/2013. This means, it will likely continue to fall which is logical. It's much easier to tenfold when you have 1000 users, then when you have 100,000 users.



So we should look at the line starting in 2011 which indicates prices will fall to $40. And that only if the percentage growth does NOT go down compared to 2011, which is questionable. It may very well be that growth will end up being less in 2013 compared to 2011 and a new line will need to be drawn in the future. In that case price may hit $20. Ofcourse these are lows that are only reached once and no one will be able to buy there. But the price will hover just above it for a month or so.



Ofcourse due to the very small market cap there is always a small chance for a black swan (irrational billionaires, economy collapse, illegalization of bitcoin, ...) and price growth instead accelerates and the low was $65 2 months back. But since this is not based on historical price growth of bitcoin chances are low.



So I think it is wise to not be all in. But also to not be all out. I think your post is a very good one TERA.Indeed the long term growth line points to lower prices.If you draw this line from the start in 2010, prices will not fall that deep ($80). But if you draw this line from 2011 prices will fall very deep ($40).The question is: will percentage growth continue to be the same, will it go down, or will it go up?In the past it has gone down. As you can see in above chart percentage growth was a lot steeper/higher in 2010 than in 2011/2012/2013. This means, it will likely continue to fall which is logical. It's much easier to tenfold when you have 1000 users, then when you have 100,000 users.So we should look at the line starting in 2011 which indicates prices will fall to $40. And that only if the percentage growth does NOT go down compared to 2011, which is questionable. It may very well be that growth will end up being less in 2013 compared to 2011 and a new line will need to be drawn in the future. In that case price may hit $20. Ofcourse these are lows that are only reached once and no one will be able to buy there. But the price will hover just above it for a month or so.Ofcourse due to the very small market cap there is always a small chance for a black swan (irrational billionaires, economy collapse, illegalization of bitcoin, ...) and price growth instead accelerates and the low was $65 2 months back. But since this is not based on historical price growth of bitcoin chances are low.So I think it is wise to not be all in. But also to not be all out.