Quote from: AJS_ on April 13, 2013, 07:46:08 AM

... I just wanted to bring this back into peoples heads since we are looking at charts, or supposed to be, but this is looking awefully similar to the 30d charts of BTC

OK, with this image being so prevalent I'm guessing I'm not the first to break it down a bit to see if there is anything of value in comparative terms to be gained from it but I'll have a crack at it anyway...

What would one expect the volume to look like on the rapid drop? Assuming the 'mean' (I'll get to that) represents a stock value reflective of the underlying asset value/expected return then should one not expect the total of the sales for the duration of the total drop to be somewhere in the region of the total purchases from take-off (plus the amount that takes it under the 'mean')? Even if it is nowhere near that I would still expect to see immense amounts of volume from those with 'fear' and 'capitulation' getting out with no intention to return. In other words if this was what was going on with Bitcoin one should expect to see the biggest volume of sales coincide with the biggest drops in price.

But what if most of the people and most of the substantial holdings from the various stages of the build-up just step out of the market altogether for the drop - or sell speculatively a small proportion of one's holding upon seeing what's happening with the intention of buying back in - and maybe even bringing even more money to the table towards the bottom? Again, where would one expect the main volume to be seen then?

Oh wait...

Quote from: labestiol on April 13, 2013, 10:23:09 AM

Quote from: hobbes on April 13, 2013, 09:06:46 AM

looks like lots of coins have changed hands in the last phase of the dip...

Indeed. Yesterday saw the 24h all time high for bitcoin volume on MtGox with 550k BTC, beating the previous one at 400k BTC during the bottom at 2$.

As labestiol points out the biggest volume here is as it hits the bottom. Let's zoom in a bit...

We should be wary of reading too much into this apart from anything else because the lag, MtGox going off-line and activity around that.

However, it looks to me like it didn't take much to trigger the initial drop and the volume came in with buying pressure when it was first thought it had bottomed and was about to start going back up. Likewise I think, (though not so obvious*) with subsequent drops. In virtually all cases (other than immediately after MtGox came back on line) the big buying has been on the bottom or on the rise.

This suggests to me a vast amount never got near the market because:

It's held not by speculators in the first place but by those more interested in the bigger picture;
It's held by speculators who would not touch a fast-moving market run on a broken trading engine with a barge pole;**
Their bid orders were pulled off the order book as soon as it became obvious this was no mere blip in order to wait until the price got low enough to buy back in.

I would venture to suggest (accepting the iffy accuracy of the picture due to MtGox) that the market was moved immensely by a small number of people and not a large amount of coin.

In which case why is it not climbing today as rapidly as it fell? Simply I would venture to suggest because there's no need for it to. There's no rush. Bitcoin isn't going anywhere in a hurry. There are still some who believe bitcoin has a value related to its use and who believe that to be lower than what it is. And they - along with the nervous who got bitten over the last few days - are reluctant to jump in too soon. But Bitcoin's use isn't dependent on it having a value of a particular size.

And this gets me onto the last point. That first illustration is to do with stocks. The 'mean' is not a mathematical mean. It suggests there is an underlying value backed up by the company's assets, customers, trade and dividends. Bitcoin has none of the above. Those who say it has 'no intrinsic value' are to a surprising degree correct so it could have no value in principle. However in order to be of use it has to have 'some' value in terms of fiat for people sending money abroad or spending it with service providers to be able to swap in and out of fiat. But for those purposes as I said it doesn't matter how big or small that 'value' is.

The 'mean' in the illustration represents a steady line upwards but unless the vertical axis is on a logarithmic scale this can't represent the adoption of bitcoin either - not by numbers of users, numbers of merchants, number of transactions or of anything.

So I would venture to suggest 'bring[ing] this back into peoples heads' is not helpful seeing as it has as far as I can see nothing useful to add to the discussion other than responses illustrating the multitude of reasons why it is so useless when comparing to usd/btc charts.

*Why I think it is not so obvious is that people were trying to get back in at every sign it may be bottoming out.

** I'm still struggling to get the mentality of those whose reaction to seeing a broken trading was to panic and try and sell on it. If they really don't understand Bitcoin well enough to see nothing was going to happen to it and that the the only option they could see was to trading blind on a market that happend some time ago then as harsh as it sounds maybe it's not such a bad thing they lost their shirts and went.