It's happening. Short squeeze covering coming.

It's happening.

Zoom zoom zoom

Very interesting. I wonder what business historians will say 20 years from when they study the history and origins of Bitcoin.

Just got here. Did we return to the mean? Hey, where did everyone go?

It's almost 7:00 am in China

There is so much buying and trading going on in OTC markets that I wouldn't be surprised to see a very strong run up in price in the near term. Heavy investors are likely to have been taking positions during this price decline especially sub 400. It's just a matter of time. There's enough indication that bitcoin is entrenching itself in the global economy as to not being ignored. It's a question to when OTC trading will determine prices on the exchanges rather than vice versa.

The price of bitcoin on the exchanges should be tracked following Localbitcoins.

As long OTC bitcoin trades take place, one can never know the actual demand for bitcoin. I would argue that the OTC market is a far better gauge of demand. If the price is being deliberately suppressed, then it is creating the ideal price on-ramp for heavy investors. If/when we see the price rise or accelerate, those investors will have sizeable positions, while everyday buyers will face daily buying limits. Demand pressure can easily reach a bottleneck because of bitcoin's limited supply. This could be in a year, 2, 3 years.

And just how long will miners be willing to go along with the lower price? Bitcoin's difficulty and hashing are ever increasing. Miners have serious expenses to balance out. They can't subsidize an artificial low price.

wall break

It's been said in other posts that the price is being suppressed on the exchanges. It's getting clearer each day. This is the consequence of unregulated exchanges. It would take a coordinated buying effort by institutional traders (small as they might be) to break down the walls. Really feel bitcoin is in an artificial bottleneck. Bitcoin needs some air to breath.

Bitcoin is going interstellar.

As the price declines, it becomes easier for brokers to negotiate lower prices on behalf of their clients to buy bitcoin in large quantities outside the exchanges. We are witnessing a transfer of wealth. The exchanges are so thinly traded that a large institutional trading desk could move the entire bitcoin market. These large corrections have been a part of bitcoin's entire price cycle.

Atlas ATS, Huobi

The institutional traders using HFT bots are indeed dictating the direction of the exchanges.
Some observations:

#1 Most large bitcoin block transactions are occurring outside of the exchanges through brokers. This is a way for large investors to accumulate bitcoins without spiking the price of bitcoin. They are like market makers insuring that the volatility in bitcoin remains steady as possible for the interest of their clients. Secondly, this insures that the miners will always have a large buyer. With a lower exchange spot price, brokers can negotiate even better prices. One interpretation is that a low price indicates heavy accumulation off the block transactions by large investors.

#2 Many of the major exchanges are unregulated. There is no way to prove or disprove any price collusion, but the lack of regulation leaves the door open to suggest it is possible. The bitcoin ecosystem is dominated by only a few major players creating an almost self-interlocking monopoly on all sides from production, investment and distribution of bitcoin. This isn't a conspiracy theory or a shill post. News at this point - either favorable or unfavorable for bitcoin is just noise for amateurs. The big boys aren't reacting to the news because they're creating it and the market.

#3 Bitcoin is going to stay around, and this isn't a bullish pump and dump signal. In the short term, bitcoin's price may bounce around more, but there are a number of factors that suggest bitcoin will have a very significant place in global finance for the long term.
 
*Skype. It is probably the most comparable parallel to bitcoin. Skype uses Voice over Internet Protocol (VoIP) and its global growth has accelerated like a classic model of Metcalfe's law. Bitcoin as a cryptographic protocol presents similar features as VoIP.

*PayPal. Bitcoin needs a major global payment system to educate, promote and legitimize bitcoin. PayPal is the company that can do that. They publicly endorsed and will experiment with it. At this point, incorporating bitcoin in their payment model is probably the best corporate strategy in order to remain the #1 payment systems in the world and keep possible competitors like Apple at bay. Whether Google or Amazon joins is another matter as they may go the way of tokenization. Bitcoin though has much greater implications beyond centralized produced tokens. If you look at a window horizon of 30 years rather than 3 years, bitcoin as a protocol will have a very strong chance of surviving. Open source, peer to peer, decentralized and built atop of the internet.

*Merchants. They will have a choice. Pay the credit cards fees around 2% or the significantly lower bitcoin fees. Perhaps attract a younger demographic as well as one that has grown up on tablets and smartphones. The world is becoming far more digitalized, and bitcoin presents a fit for it.

*Consumers. Bitcoin has obviously placed the cart before the horse. It has only reached a fringed group of buyers who have speculated on its price. The target users will not be in developed countries initially, but in underdeveloped countries and emerging markets. A younger market in developed countries are likely to experiment with it. The tipping point will be when more companies begin paying salaries in bitcoin. It will create a fully integrated bitcoin economy. When that happens, people will use it not hoard it. That will be years in the making.

*Other factors. Lawsky's NY reg, the Bitcoin ETF are other factors which can accelerate adoption. However, that does not mean the price of bitcoin will automatically rise.

Independent of all the factors contributing to bitcoin's adoption rate, bitcoin cannot function or fulfill its promise as digital currency until its reach a higher market cap. If the exchanges or bitcoin market economy is somehow manipulated, the price will need to rise much higher than it currently is.

          

Bitcoin is about to race up to $830

With the paypal news, all those people with wallets collecting dust will probably want to buy some BTC just to test the waters. Coinbase will probably have a backlog of orders to fill. As long as we stay clear of further news/noise like bots, margin calls on long positions, ethereum sales, Alibaba, etc. maybe bitcoin will rediscover its bullish course. GABI also can play a positive role in new price discovery.