Quote from: ErisDiscordia on February 26, 2014, 02:53:25 PM

Quote from: TERA on February 26, 2014, 02:26:13 PM

The 'silk road effect' has nothing to do with the stashes and I'm not sure if we even knew the size of the stash when it first happened. Here is the silk road effect:

1) Huge black swan event happens and something shuts down
2) Investors perceive that this accounted for XX% of all bitcoin business and the death will severely damage bitcoin.
3) Investors panic and sell everything.
4) Sneaky whales who have been lurking waiting for 'some black swan event' for months and months don't give a shit and start buying like crazy.
5) All the coins that were panic sold are suddenly accumulated, with no traders or shorts getting re-filled as they should have. There is a huge imbalance in the force.
6) Investors see the gigantic buying and think 'holy shit the whales are buying. things are as bad as they can possibly get and they are BUYING. This is BOTTOM. This has suddenly turned from bearish to extremely BULLISH'
7) Investors and traders race to rebuy their coins.
8 ) A massive short squeeze happens as shorts compete against traders to fill the void in the force, compounding the effect.
9) a full recovery is completed as if nothing happened.
9) Prices CONTINUE to rally above the original point as investors who were holding off for a trend reversal are given renewed confidence and continue to pile in. The media exposure from the black swan event and the crash helps also.

wow, this is a pretty good description of the process, hat tip to you, sir.

...meanwhile the price is stealthily making its retraction?

So far the retracement is not unusual. Remember that silk road consolidated an entire week or so before finally going into a full breakout.

Also, the difference between now and silk road is we were just in a bear market in the middle of final capitulation, while silk road was during an uptrend. Prices attempted to rally here with a lot of force but were opposed by the large bear market counterforces that existed before the gox crash. This was a rather odd way to end a capitulation and there might be more work to do to buy out all the capitulation coins.