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If BTC swaps are high right now does that mean bitcoin is likely to rise in price, or the opposite?
Well, currently there are:
22,193,192.53 USD swaps
17,599.02 BTC swaps (or about $6.1MM at current price)
Say you have $333 and very confident that the current price $1000/btc
will go up. If you buy 0.333BTC and the price goes up 10% to $1100 next day, and you sell you'd have $366 ($333+$33 ) Yay but that's not good enough for you and instead you decide to leverage long. That is, you come to RyNinDaCleM and say you want to buy a full 1BTC. RyNinDaCleM, being a loan shark that s/he is, agrees but on the following terms s/he will buy and hold it for you, s/he wants to be paid 1% per day and asks for Initial Margin 3:1 (33%) and warns that Maintenance Margin is 15%. Blah blah STFU you agree and hand him $333 (33% from $1000 as Initial Margin) he puts in $666 of his own money and buys full 1BTC and says he'll keep it for safekeeping you go Whateve's. Now you prop your eyes open with tooth picks and glue yourself to a monitor looking at BTC price charts expecting it to go up. You've entered a leveraged long position.Outcomes:
A-Day later, price goes up 10% cool!! You ecstatically run to RyNinDaCleM's place tell him to sell that 1BTC and give you your money. He hands you $427.34 ($1100 - $666money he put in - $6.66 his 1%swap interest for day). You come back home and find your girlfriend with another model looking chick having a pillow fight naked on your bed. Cool much better than $366 eh?
B-Day later market moves against you $100 so btc is at $900 now. You kick the cat, lock the dog outside, but hang in there after all you got mad trader skillz and confident that the price MUST go up so must be just a glitch in the matrix. Next day market moves against you again and BTC is at $800 now. You call up your girlfriend and say that she needs to loose few kilos/pounds, call up your mom and say you always hated her cooking. But stick with your btc. After all BTC always rebounds, right? It always does. RIGHT!?! Day three, you wake up and find puke all over your keyboard, empty bottle of vodka and a really fat "thing" passed out in your bed. You really hope it's a chick but can't tell and too afraid to check as to not wake her/him up. You check BTC and it's trading at $700. Damn must be that full moon oh well BTC is only down 30%. You look at the chart and conclude that the pterodactyl's nose points to a trend reversal tomorrow. But phone rings and it's RyNinDaCleM saying it's a margin call and he just sold your BTC and come pick your $14.02 up . WTF thought we were cool bro? Phone ring wakes up the fat dude that was passed out on your bed, he give you a compliment on you pretty mouth while he pukes all over your bed/carpet.
WTF just happened!?!Well, your equity (your money) started off at $333. 15% Maintenance Margin at price of $1000 is $150 so you're well over that with your $333
-Day one btc is at $900. Your equity is at $227.34 ($900-$666RyNinDaCleM share-$6.66one day 1% swap interest), 15% Maintenance Margin means that you need to be at least at $135 (900*15%). $227.34 > $135 so you're good.
-Day two btc is at $800. Your equity is at $120.68 ($800-$666RyNinDaCleM share-$13.32two day 1% swap interest), 15% Maintenance Margin means that you need to be at least at $120 (800*15%). $120.68 > $120 barely made it.
-Day three btc is at $700. Your equity is at $14.02 ($700-$666RyNinDaCleM share-$19.98three day 1% swap interest), 15% Maintenance Margin means that you need to be at least at $120 (800*15%). But $14.02 < $120 MARGIN CALL!
Shorts are the other way around where you borrow BTC and sell it right away for $ in hopes that it'll go down so you can repurchase it later at a lower price. Don't have time to write up an example for that today
TL;DR lots of USD swaps (longs) means a lot of people holding BTC with borrowed money in hopes that BTC will go up so they can sell and pay back the $$$. But they're paying interest daily, and if market goes down too much they might have to sell their BTC before loosing everything, or if it goes down too much the BTC might be sold automatically by exchange in a margin call. Which might cause a domino effect. Price falls, person 1 gets margin called and his coins are sold on the market, causing the price to drop even more, now person 2 gets margin called and now his coins are market sold driving the price even further down now person 3 is in trouble etc...
BTC swaps (shorts) are the other way around, people borrowed coins, sell right away and sit on fiat. Eventually they have to buy the coins to give them back (close their short). They obviously hope to rebuy at a lower price. You borrowed a coin from me at $1000, price goes up to $5000 but i don't care and want my coin back, so you're forced to buy at the market price. Forcing price up, and possible margin call on other shorts driving the price even higher...
Epic post DaRude. Wanted to quote this for future re-reads.
What IS important is if the growth trend is slowing or not.
Agree. For example, it is reasonable to suggest that "pregnancy" is shorter for early adopters and longer for general population. Then it would be steep curve in the very beginning, then less and less steep later on. Something like this: 
EDIT: It's real data
This has probably already been mentioned at some point, but have you given any thought to 'the chasm' that is inevitably encountered during adoption of a disruptive technology?
This feature (unique to disruptive innovations, in contrast with sustaining innovations) occurs after the innovators and early adopters (who, in total, account for the first 16% of total adopters) and before the early majority jump in. It appears while the innovators and early adopters revel in the adoption of a change agent, the early majority are much more comfortable using existing tools/methods and hesitate before adopting something that requires a fundamental change to their current operations. This hesitation forms 'the chasm'.
Using 2.1 million as the value of current adoption (taken from My Wallet), and assuming we have reached the chasm, that puts the future total number of Bitcoin adopters at approximately 13 million. (Granted, this value does seem a little low, especially considering it is only 9% of PayPal's current users.)
Anyway, it would be interesting to hear your thoughts on this...
I just saw that aminorex is giving 100mBTC to JorgeStolfi just to annoy him. That is funny! 
First, thank-you Risto for such a neat little initiative. I hope this ends up being picked up by some of the more notable (and reputable) blogs so that there is some good (non-merchant) publicity drummed up about Bitcoin. It would be nice for Joe Public to realise that there are actually some nice and sane people who use the currency.
I seem to have been fortunate enough to be chosen as one of the lucky recipients (I received a lovely PM from the uberbull and eternal optimist BitChick who has very kindly offered to pass along 100mBTC).
If it does not violate any rules, I would like to pass the full 100mBTC along to my husband, for the following reason:
As BitChick said, I jumped on the btc-bandwagon in December just after the ATH with a not-so-insubstantial (for me) investment of $10,000. I confess I had not done nearly enough research prior to this, and it was definitely a 'panic buy'. I then spent the next couple of months carefully reading about Bitcoin, learning the underlying fundamentals etc., and this became my solace during this so very long bear market. (It certainly isn't easy to watch the price plummet, and keep plummeting and yet still remain optimistic... unless your name is BitChick!
)After putting together some of my 'analyses', I went to the husband to see if he would agree to redraw on the homeloan and inject another $10,000 (this was around a month ago). He finally agreed, and now we have at least dollar-cost-averaged to some extent (our break-even point is still unfortunately around $750).
However, the little analysis I showed him had us on track for that July/August bubble, but Bitcoin appears to have skipped that bubble in the cycle. Needless to say, I am not in his good books! In his mind, we have lost the full amount, and is certainly not Bitcoin's biggest fan, to say the least. I want to do something to fix that... He doesn't even have a wallet, so I thought I would download one for him and show him just how ridiculously easy it is to transfer btc. I'll also show him this thread so that he can see the little story behind the 100mBTC.
Thank-you again Risto and BitChick for your kindness.
I doubt I'll change my opinion about Fonzie anytime soon, whatever he says 
There was once a troll named Fonzie
of which no one was very fond see..
Because every word he spoke, was a terrible joke
and everywhere he looked there waz a ponzi.
There once was a troll named Fonzi..
a little little fish in a big pond see.
Because every meme played, seemed trite and homemade
not the sharpest knife in the box he.
There once was a troll named Fonz
took his name, from Happy Days long gonz
but to all of our despair and with no class or flair
The Fonz liked to share share share share
Has anyone seen dear Fonzie ?
No!
Not I! Not me!
Not us!
I see!
Excuse me mr Columbo but maybe he is dead?
" but for a troll he seemed really well fed?"
Perhaphs he fell somewhere and banged his stupid head
Ok Bitcoiners fair enough, that was well said
but, oh ,ah ,one more question before I go blondie.
Maybe he drowned whilst swimming in the pondie?
Ok ok you got me ! I confess, I really have to get it off my chest
what happened to the dear old lamented Al Fonzi.
He was a float, when I threw him from the boat
but with my boot to his head
I kept him down till he was dead
and now there is no more ol Fonzi.
You see there is no bubble down there I screamed and cried
and then slowly, thankfuly Fonzie died.
So ..
There once was a troll named Fonzie
but now we can hear him no more
Maybe a note
or the odd quote..
despite your f'kin ignore
Once long ago there was a troll named Fonz
or maybe it was Al-fonso, or Al Fonzie
I cannot remember ,or quite care...
just a mere flash of memory as I stare
at the Bitcoin price up in the sky
Now Proudon... what a guy...
...and now well .really what can I say?
I guess in the words of the real Fonzie "Hey hey hey"
Where shall we go a sailing today?
(
lets catcha train instead- I faintly heard the ghost of Fonzie say!
" apparanty there is a CCMF due any day"
I rested a Bitcoin, in with his corpse and nailed the lid shut and chucked it off my yacht and had a party. the end.
Brilliant.
Re: The Observer Effect (take 2: over $1000 by 21 July - 8 Aug)
peak at around 13th August
17th August the least (more by actually looking at your chart). Also notice that there hasn't been a jump from the local minimum (which was 600 less than 2 days ago) and from which about 50 days are required to reach the peak (31st August if the rise starts).Thanks for picking that up. The initial date of 13th August should have said 23rd August.
Based on the tone of your comment, I gather you aren't too hopeful that we have begun the start of an ATH rally?
Re: The Observer Effect (take 2: over $1000 by 21 July - 8 Aug)
July 14th and still $630 
Hope those $1000 are reached before the end of this year, you have 5 months
Hope those $1000 are reached before the end of this year, you have 5 months So, clearly my previous prediction was off...... back to the drawing board I went, and I've now re-evaluated the prediction. (And when I say 'prediction', I use the term loosely. Bitcoin seems to like to spit in the face of any predictions people make. And I say that with great fondness.)
The rationale behind the re-evaluation: The first two bubbles were 214 and 213 days apart, the next was 222 days later, and the last two were 235 and 234 days apart. All up, the interval between peaks is uncannily consistent. However, it appears that the interval is marginally increasing (again, this is all based on very few data points, so no rock solid conclusions could be drawn from this). Thus, perhaps the next peak will not be 235 days from the last, but more along the lines of 257 (an increase on par with the previous increase in time interval). This puts the peak at around 23rd August, which is what I have adjusted the following chart to reflect. Seems we are on track for a possible peak of $5000... If we don't continue rising though, I may have to hang up my 'Bitcoin-predictor' hat.
edit: fixed small error in date
Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
I am hoping for a drop. I imagine that the price will soar within the year, but there is too much downside risk to jump in heavier around $580. Notably, I worry about Wall Street market manipulators intentionally tanking the market because they have derivative contracts referenced to Bitcoin. For example, in the lead up to the mortgage bubble, Goldman Sachs took out naked credit default swaps via AIG banking on a market collapse that they were responsible for. Notably, the payout of the naked credit default swaps was 10x the underlying dimunition of value in the mortgage market. This occurred because with this type of derivative, one needn't actually own the referenced security, commodity, currency, etc. that they are referencing the "insurance policy" to in order to receive a full payout. Moreover, they can contract for protection that is 100x the value of the underlying asset/currency/security/etc. Since these are unregulated contractual agreements there are no clearinghouses and nobody knows what negative positions people are taking. Resultantly, I think the intrinsic value of this innovation is multiple times its current value and, yet, it is way too easy to manipulate for me to want to get in at this price.
A couple other thoughts
(1) This is why a post-auction dump isn't unfathomable (albeit extremely, extremely unlikely)... an institutional player could use the acquired BTCs as a weapon to tank the market short-term in order to collect on a derivatives contract several orders of magnitude greater than their holdings;
(2) I think the argument for auctioneers buying at a premium is mildly flawed because, although they can buy without impacting the market, they cannot extract liquidity on that many BTCs without dropping the market unless they slow played it and in that case they'd still be holding a lot of risk. They probably will be expecting a jump in prices if they get in, but they'll still run into a similar problem if they look to unload down the line -- they'd have to be a true believer AND somewhat risk blind... they cannot actually utilize that many BTCs unless acceptance goes through the roof OR a major external economic event (Chinese mainland wealth migration). In short, I say it is mildly flawed because I think the reason for expecting a premium is spot-on, but I think it is outweighed by this second factor... I'd expect the auctioneers to buy at a 10% discount.
Full disclosure -- I own a very small holding of BTC (10), that I got at just over $400 a pop. I am holding for the long-term, but hoping for a short-term dump for another entry point. I am very biased in this regard. I missed the boat a while back on the best entry points so take what I say with a grain of salt. I am just curious what others think. I am short-term a mixture of anxious and giddy and long-term hopeful.
A couple other thoughts
(1) This is why a post-auction dump isn't unfathomable (albeit extremely, extremely unlikely)... an institutional player could use the acquired BTCs as a weapon to tank the market short-term in order to collect on a derivatives contract several orders of magnitude greater than their holdings;
(2) I think the argument for auctioneers buying at a premium is mildly flawed because, although they can buy without impacting the market, they cannot extract liquidity on that many BTCs without dropping the market unless they slow played it and in that case they'd still be holding a lot of risk. They probably will be expecting a jump in prices if they get in, but they'll still run into a similar problem if they look to unload down the line -- they'd have to be a true believer AND somewhat risk blind... they cannot actually utilize that many BTCs unless acceptance goes through the roof OR a major external economic event (Chinese mainland wealth migration). In short, I say it is mildly flawed because I think the reason for expecting a premium is spot-on, but I think it is outweighed by this second factor... I'd expect the auctioneers to buy at a 10% discount.
Full disclosure -- I own a very small holding of BTC (10), that I got at just over $400 a pop. I am holding for the long-term, but hoping for a short-term dump for another entry point. I am very biased in this regard. I missed the boat a while back on the best entry points so take what I say with a grain of salt. I am just curious what others think. I am short-term a mixture of anxious and giddy and long-term hopeful.
Welcome, Newbie... great first post. There are some good points there - and I don't think you have missed the boat at all. Do you think you will try and increase your holdings if there is no drastic change in price after the auction?
Normally I would accept technical patterns as good indicators or hints at least of what to expect. But in the case of bitcoin i'm afraid it makes no sense
at all! especially at this stage of it's development. We are driven by events and news not trend. Adoption rates create a trend in and of themselves, but there are far too many wild card factors moving this market to predict, not least of which:
a) Governments accouncements for or against bitcoin.
b) Mt.Gox type negative events (I'm personally expecting BTC-e.com to be a repeat of that, they are so cloaked in secrecy it stuns me anyone would ever send money there!.)
c) Retail adoption rates. This is accelerating, and the competition is hotting up in that space as the bitpays of this world try to establish themselves as no 1.
d) Global financial market, as it melts bitcoin goes up, try predicting when THAT will happen!
e) The emergence of regulation for bitcoin companies.
f) Remitance adoption, probably the biggest short term driver as this is the one that is so tangible and doable now. At the moment only 0.02% of the world are using bitcoin!
g) Individual country issues (Argentina debt default for example) citizens piling into bitcoin to prevent a repeat of previous collapse there.
The list goes on and on... and you want to try and predict with a chart?
?
at all! especially at this stage of it's development. We are driven by events and news not trend. Adoption rates create a trend in and of themselves, but there are far too many wild card factors moving this market to predict, not least of which:
a) Governments accouncements for or against bitcoin.
b) Mt.Gox type negative events (I'm personally expecting BTC-e.com to be a repeat of that, they are so cloaked in secrecy it stuns me anyone would ever send money there!.)
c) Retail adoption rates. This is accelerating, and the competition is hotting up in that space as the bitpays of this world try to establish themselves as no 1.
d) Global financial market, as it melts bitcoin goes up, try predicting when THAT will happen!
e) The emergence of regulation for bitcoin companies.
f) Remitance adoption, probably the biggest short term driver as this is the one that is so tangible and doable now. At the moment only 0.02% of the world are using bitcoin!
g) Individual country issues (Argentina debt default for example) citizens piling into bitcoin to prevent a repeat of previous collapse there.
The list goes on and on... and you want to try and predict with a chart?
?Calm down, it's just a harmless little exercise. I'm more just curious to see how it goes, and I'm certainly not advocating basing trades on this prediction (for lack of a better term).
We all know bitcoin, the first phenomenon of its kind, is by its very nature unpredictable. Charts and whimsical predictions just allow us to think we have some measure of control over something that is inherently uncontrollable. Where's the harm in that?
Regardless, if a peak does occur in the next 30 days and follows past trends, it seems it will be slightly less than the anticipated $5000 and more around the $3000 mark.
Assuming the run-up velocity is similar to past trends, the overall log-scale chart also has us hitting a peak of around $3000 now as well.
Still, based on where we are sitting now, I don't think anyone would be complaining about a $3000 peak in the next 30 days...
Assuming the run-up velocity is similar to past trends, the overall log-scale chart also has us hitting a peak of around $3000 now as well.
Still, based on where we are sitting now, I don't think anyone would be complaining about a $3000 peak in the next 30 days...
These are some cool charts, thanks.
While obviously no one knows, I do feel good about this week. The 51% Ghash.io situation is priced in, the FBI sale is priced in, the weekend is over, we are sitting pretty at 600 USD and China can only ban bitcoin so many times.
I feel good about the coming week, maybe keithers is right and well see a move up to 700 USD this week.
Good Luck!
While obviously no one knows, I do feel good about this week. The 51% Ghash.io situation is priced in, the FBI sale is priced in, the weekend is over, we are sitting pretty at 600 USD and China can only ban bitcoin so many times.
I feel good about the coming week, maybe keithers is right and well see a move up to 700 USD this week.
Good Luck!
Thanks for the positive comments.
Here are the updated charts.
I have put the zoomed-in-current-vs-past-trend chart in date form and adjusted our current trend (by 3 days) so that the peak now occurs at the latest allowable date (based on past data), which is 235 days from the last peak. Coincidentally, if the price does follow this trajectory, the end of the relatively stagnant period we are in now seems to occur on the 27th June (the day of the auction).
Again, this is all just speculation (obv) so this could all very well be entirely wrong. Not long to wait to find out though.
Thought I'd give this a little bump. I really love the chart (as a historical view, not just as a prophecy) and have been following it for some time now.
Much appreciated
.Here is the updated chart... we still seem to be right on track.
JulieFig, thanks for the graph!
You gave me a reason to HODL my Bitcoins!
You gave me a reason to HODL my Bitcoins!
Happy to have helped
.The graphs do make it a little easier to stay rational during drops like the one just gone, that's for sure. I do wish I had been smart enough to do up all these plots before I bought in though. I had the 'good' fortune of buying at roughly $1000 (very close to the ATH). I have held through the subsequent drop and all the way down (buying some more to lower the dollar cost average) so I feel like I have earned my Bitcoin stripes.
I have never actually been around here for a proper rally (to an ATH) before though, and am really looking forward to it!
Please see my last post just above yours.
Apologies... should have been more thorough.
No need to start worrying yet. We still seem to be following the trend of the last two run-ups quite nicely.
I actually adjusted the days at which the peaks occurred for the April and November bubbles (by 3 days at most) because then even the flash crashes on the run-up lined up! If we are where I think we are, we are just experiencing the small dip before the rally (which was coincidentally related to SR for the last run-up as well).
In fact, some more experienced traders on these forums don't seem to have been comfortable with stating that it's the start of a rally because we haven't had 'the crash before the rally' yet. Perhaps they will be satisfied with this one?
edit: Each datapoint is based on the Bitstamp close price. Since we don't yet know what the day holds in store for us, I have conservatively estimated a close of $560, just to see how it lines up on the plots. Even with that low a value, we still seem to be on track for a peak between $3000 and $5000.
Another plot for those who are interested...
This new plot is really good. As data are displayed only on 100 days, it is easier to see if we are still on track or not.
If you are interested, i could help to make a simple website to display these two wonderful charts.
If there is interest, then absolutely! Are you sure this will not eat into too much of your time?
Another plot for those who are interested...
I superimposed the current trend (over the last 50 days) with the run-ups to the April and November 2013 peaks.
We still seem to be right on track for a peak between $4000 and $5000...
Good news is we only need to wait a fortnight (maximum) to find out if history will repeat itself.
Note: This plot has the peak occurring in late July, which is based on the assumption that the peaks occur (approximately) every 234 days (an assumption based on historical data).
I superimposed the current trend (over the last 50 days) with the run-ups to the April and November 2013 peaks.
We still seem to be right on track for a peak between $4000 and $5000...
Good news is we only need to wait a fortnight (maximum) to find out if history will repeat itself.
Note: This plot has the peak occurring in late July, which is based on the assumption that the peaks occur (approximately) every 234 days (an assumption based on historical data).
come on ,keep update
No worries. (I was holding off since the large time-scale makes day-to-day updates seem a little superfluous.)
But here is the updated plot... we have hit the 'velocity line', but bear in mind that this line was drawn through a peak expected on 17th July. Based on previous cycles (where peaks occur approximately every 230 days), this date could be as late as 24th July. I may adjust for this as we get more data.
Sorry, I was off by 1 day. Missed the 10th by that much...
We actually have a green closed candle on bitfinex's MACD. Bitstamp's just turned green with the start of the new week.
I also wouldn't mind picking your brain with regards to the next couple of weeks... Do you think we will see a minor cross back over before resuming the upwards trend, a la September last year?
I think it's entirely possible we could flash crash down as low as 420 within the next 2-3 weeks, ending the week of the crash above 540. It's also possible we could stay flat for 2-3 weeks. Either way, when we break above 685, we're on our way to a new ATH. I expect to revisit the last ATH in about 7 weeks, and be at our new ATH about 4 weeks after that.
We seem to be pretty closely following the trend of the run-ups to the previous two peaks. If we do continue like this, I think we may bypass the flash crash you mentioned, and just stay flat for another 2 weeks.
Sorry, I was off by 1 day. Missed the 10th by that much...
We actually have a green closed candle on bitfinex's MACD. Bitstamp's just turned green with the start of the new week.
I also wouldn't mind picking your brain with regards to the next couple of weeks... Do you think we will see a minor cross back over before resuming the upwards trend, a la September last year?
I estimate this will happen around June 10th. The weekly MACD hasn't been green since January.
Sorry, I was off by 1 day. Missed the 10th by that much...
We actually have a green closed candle on bitfinex's MACD. Bitstamp's just turned green with the start of the new week.
Being off by 1 day in BitcoinLand is still a bullseye - good on you!