Exactly.

Between Feb/6 and Feb/11 the price had a permanent drop by some 50--60, almost certainly due to news of MtGOX's troubles. (Feb/10 was the first disappointing press release IIRC.)  

I believe that the final demise of MtGOX did not have an immediate effect on price because speculators had been following the story and were expecting that event, so their reaction happened weeks ago (and it was negative).  

However, the headlines in mainstream media are going to scare away potential investors who might otherwise have joined the market.  As for the long-term investors (who own bitcoins but do not read the forums and may check the charts only now and then), some of them will decide to sell their coins and invest into something else.

I believe that yesterday's "crash" was caused by that 10 kBTC sale at Bitstamp, not by MtGOX directly, and the current "rally" is just the normal recovery. 

The real effect of MtGOX's closure I think, was a gradual decline spread over the last month, and I think that more damage will come gradually over the next months.

The closure of Silk Road had a positive effect since it removed the stigma of "crime coin" that kept many investors away.

On the other hand, I don't see anything positive in the closure of MtGOX.  It does not increase the confidence on other exchanges. (If it had been closed by the police, and Mark went to jail, it might have had that effect; but if it just closes and that is it, why shouldn't the other exchanges do the same?)   

The headlines that are coming out now say "The largest bitcoin exchange closes and disappears with all their clients' money".  There will be thousands of angry MtGOX clients putting up blogs and giving interviews about how they lost everything by investing in bitcoin. That can only scare potential investor again.

Many long-term investors who are not bitcoin enthusiasts probably have not heard of MtGOX's troubles until now.  As those news reach them through the media, some of them should sell their coins and leave.
 

Today Tuesday Feb/25 UTC, the total trade volume increased about +160% relative to yesterday (from ~363 kBTC to ~948 kBTC).

The increase was slighty greater outside China (from ~102 to ~291, or +185%) than in China (from ~261 to ~657, or + 152%).

As a result, China's slice of the total volume fell from 72% to 69%.

The increases in the main exchanges were: Huobi +117%, OKCoin +229%, Bitstamp  +123%, Bitfinex +252%, BTC-e +252%, BTC-China +115%.

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


             !    Mon !    Tue !   Wed !    Thu !    Fri !    Sat !    Sun !    Mon !    Tue !
  EXCHANGE   !  02/17 !  02/18 ! 02/19 !  02/20 !  02/21 !  02/22 !  02/23 !  02/24 !  02/25 ! Currencies considered

  Bitstamp   |  19.90 |  14.83 | 20.76 |  34.97 |  29.61 |  18.08 |  20.87 |  51.84 | 115.76 | USD
  BitFinEx   |  15.69 |   8.47 |  4.71 |  25.27 |  28.46 |  14.73 |  15.80 |  27.16 |  94.55 | USD
  BTC-e      |  15.07 |   8.08 |  5.84 |  23.37 |  23.64 |  18.68 |  14.24 |  20.78 |  73.86 | USD,EUR,RUR
  Kraken     |   0.89 |   0.51 |  0.38 |   1.60 |   1.15 |   1.08 |   1.06 |   1.06 |   2.23 | EUR
  Bitcoin.DE |   0.57 |   0.38 |  0.54 |   0.70 |   0.76 |   0.61 |   0.50 |   0.73 |   2.23 | EUR
  CaVirtEx   |   0.15 |   0.21 |  0.11 |   0.75 |   0.60 |   0.20 |   0.23 |   0.30 |   2.15 | CAD
  CampBX     |   0.28 |   0.10 |  0.14 |   0.73 |   0.24 |   0.26 |   0.22 |   0.37 |   0.42 | USD

  SUBTOTAL   |  52.55 |  32.58 | 32.48 |  87.39 |  84.46 |  53.64 |  52.92 | 102.24 | 291.20 |

  Huobi      | 130.41 |  74.04 | 34.12 | 131.14 | 187.12 | 154.12 | 185.15 | 163.47 | 352.76 | CNY
  OKCoin     |  63.05 |  51.46 | 26.29 |  53.49 | 140.75 |  87.71 | 141.90 |  84.03 | 275.68 | CNY
  BTC-China  |   7.86 |   3.86 |  2.04 |  10.97 |  15.23 |   9.29 |  10.42 |  13.12 |  27.72 | CNY
  Bter       |   0.48 |   0.35 |  0.37 |   0.77 |   0.63 |   0.48 |   0.62 |   0.53 |   1.10 | CNY

  SUBTOTAL   | 201.80 | 129.71 | 62.82 | 196.37 | 343.73 | 251.60 | 338.09 | 261.15 | 657.26 |

  TOTAL      | 254.35 | 162.29 | 95.30 | 283.76 | 428.19 | 305.24 | 391.01 | 363.39 | 948.46 |



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

NOTE: MtGOX is now closed.

Chinese Slumber Method prediction for Wednesday Feb/26

Today Feb/25, Huobi's volume for 19:00 -- 19:59 UTC was 853 BTC, which, by the criteria I have been using, makes it a False Slumber Point.

This was the sixth consecutive day in a period of hectic trading at Huobi, that started on Feb/20. It is as if the six days Feb/20--25 had been one single "trading session" during which the price veered off the trend line, like Feb/11--12, Feb/13--14, and Feb/16--17.

There is no clear trend yet, so for the next prediction I will stick to the "bullish" trendline defined by the True Slumber Points of Feb/18, Feb/19 and Feb/23, ignoring Feb/21.  That trend line has the equation p = 3871.10 - 2.57*d, where p is the price and d is the day number in February.   For Bitstamp, as usual, I will use Huobi's prediction divided by R = 6.12.

Therefore:

Prediction valid for: Wednesday 2014-02-26, 19:00--19:59 UTC (not before, not after)
Huobi's predicted price: 3804 CNY.
Bitstamp's predicted price: 622 USD.



NOTE: If you find these Chinese Slumber Method posts boring, I could change the name to Chinese Choo Choo Train to the Moon Slumber Method.

Checking the Chinese Slumber Method predictions for Feb/25

Prediction posted on: Monday 2014-02-24, 21:36 UTC
Prediction was valid for: Tuesday 2014-02-25, 19:00--19:59 UTC

Well, again, I was obviously way more optimistic than the market

Huobi's predicted price: 3807 CNY
Huobi's actual price (L+H)/2: 3284 CNY
Error: 523 CNY

Bitstamp's predicted price: 622 USD
Bitstamp's actual price (L+H)/2: 515 USD
Error: 107 USD

One interesting observation is that, like yesterday, Huobi's price followed Bitstamp only partially, refusing to go all the way down.  The price ratio deviated from the usual 6.12 CNY/USD, although not as much as yesterday.  It seems that arbitrage trading was not totally effective at those times.

The Huobi prediction in question is the rightmost blue rectangle on the chart below.  The light blue-gray rectangles are the previous predictions.  The orange and grey dots are the True and False Slumber Points, the mean prices at 19:00 UTC every day.  The orange line is the trend that was assumed for the prediction.


The following chart shows the Bitstamp prices and predictions. The orange and grey dots are Huobi's prices at 19:00 UTC every day, divided by R = 6.12.  The orange line is the trend used in the prediction, which is Huobi's trend divided by R.

It is the normal daily pattern. It is 11:00 am there.

Sounds like the sort of thing that should not happen but often does...

But what about those clients who complained publicly that they did NOT receive the withdrawals?  The hackers only "un-malleated" the transfer requests of their own withdrawals, leaving those alone?

The most basic number to understand the situation of Mt.GOX is X = A-B, where "A" are the company's assets and "B" are its liabilities.

Apparently no one (perhaps not even MtGOX's management?) has any clue about the values of "A" and "B", not even how many figures they have.

All the signs indicate that X is negative and large, minus tens of millions of dollars at least.  But not even that is certain.

We know that "B" includes the 40,000 BTC  that some clients recently claimed to have been trying to withdraw for months.

But "B" also includes the BTC and USD balances of all its clients, whether they tried to withdraw or not.  I have seen one estimate (by outsiders) that this sum may be 1 billion USD or more.  Apparently this number was obtained by guessing the number of accounts and guessing the average account balance.  Not a meaningful estimate, but it highlights the extent of our ignorance.

MtGOX apparently has now exhibited some 40,000 BTC (~20 million USD at current price) on blockchain.info and claimed that they are part of "A".  

Is that all of "A"?

EDIT: And that "exhibit" of 40,000 BTC is almost certainly a hoax.  So we have no reliable information at all about "A". It could even be zero.

How could you possibly know that?  Were you one of those kids? 

I am replying in the "Bitcoinrain Debt problem" thread.  Please consider using that thread for further post on this topic.

I did NOT write that.  I described a situation without any names, @Rampion said that it must be MB and Bitcoinrain. 

I did NOT say that the owner of BR stole the coins, just noted that the theft came at the most convenient time for the owner.  Each one may draw his own conclusions.


They WERE using while the OWNER OF BITCOINRAIN was owner of MB.  "Known thief" are your words, not mine.


I implied that bitcoin investors are amazingly tolerant of sleazy and unethical behavior by exchange operators and other people around them. 

By the way, you are still defending the Bitcoinrain owner, aren't you?

Would you mind telling us how you know that?


? Where did you get that?

I know the basics of modern cryptography, like any computer scientist should, but would not call that "background".


Er, are you advising me to invest in bitcoin now? 

Where do you think that train is going to? What do you expect the price to be 3 years from now?

You too know for a fact that that providential just-in-time theft was real?

All I know is that Mr. whatever himself wrote in a previous post that he knew Bitcoinrain's owner personally, and defended him.

What I don understand is why he still calls me "Mr. Stelfi".

Whoa, sorry, the hood fit again, Mr. Bitcoinraimpion?

Seriously, relax, I was not referring to you specifically.  In fact I have no idea of who you are and what you promise to your clients, if you have any. 

Obviously so.  But what about an investment that promises a 10,000% return in 3 years?

Nice computer graphics reconstruction, here is a photo if anyone cares:

http://commons.wikimedia.org/wiki/File:Malla_mõisa_peahoone_2012.jpg

https://et.wikipedia.org/wiki/Malla_mõis

BitcoinRain was a Brazilian "bitcoin investment fund" that operated from Oct/2011 to Apr/2013.  It took the investor's BTC and promised a minimum 9% monthly return in BTC to them.

BitcoinRain attracted more than 300 investors who deposited more than 15,000 BTC there.

In Mar/2011, when the price of BTC was rallying, one of the investors tried to withdraw 1200 BTC of the 2600+ that he thought he had in the fund.  By its terms, the fund should have done that within 3 days.  The fund operator delayed the withdrawal with technical excuses for 3 days, then told all clients that he had just been hacked and all their coins had been stolen. ˜Sorry, folks."

The story sounds familiar?

The BitcoinRain clients haven't got their BTC back yet, and most likely never will.

The story is told here (in portuguese) by one of their former customers:
http://defendaseudinheiro.com.br/a-verdadeira-historia-do-mercadobitcoin/