To be clear: at this point, I belive that the most naive TA (linear or exponential extrapolation) may have some value for very short time periods (a couple of days), in very special circumstances. (That is what I am testing wiith that Slumber stuff.)

Certainly there is some information about the fundamentals encoded in the price, and some of the fundamentals have long-lived trends; so in theory there is some hope that TA could pick up those trends and give more precise and accurate estimates than the log-brownian model.  However, in practice it seems that the useful "signal" is so small compared to the "noise" that the trends detected by TA are mostly derived from the "noise".  Therfore, any perdiction based directly on fundamentals is bound to be infinitely more reliable than one based on price history alone.

Specifically, I do not believe that what the price was or did in 2012 has any bearing on what it will do next month.  Especially when we know that the market and environment have radically changed since then, so there cannot be any significant fundamental factor whose evolution has remained unchanged for these two years.

If the price had been 2000 USD back in 2009, for some reason, and crashed to 0.005 in 2010, why would that reason and that crash have any influence on the the Chinese traders'  behavior tomorrow?

Averaging over long time spans can improve the "signal"/"noise" ratio, but only if there is a "signal" in the fundamental factors that lasts that long.  Even for car manufacturers the fundamental factors -- like steel production, salaries, consumer demand, etc -- can change radically over a couple of years.  What then for bitcoin, whose "fundmental factors" are all virtual, and can go from 0 to 100 and back in a matter or hours?

Even if the past prices had useful information about future prices, what happened in the last two months surely should be much more important than what happened a year ago.  

You surely did not pay attention, but aftter the end-of-March crash I predicted that the price would reboud to the previous levels (~550 USD) if the Caixin article turned out to be false.  I may even have been the most bullish bull at the time.

But I don't know if I will be around for long, whether the price goes up or down,  Everything gets boring eventually...

Yes.  What will be the price on Nov 17, 2014, at 17:23:11 UTC?  The log-Brownian model say that it will be more than 487.15 USD with 50% probability, less than that with 50% probability.  (OK, there is some probability that it will be EXACTLY 487.15 USD,but it is very small.)

The problem with "fundamentals" is that some are unknown (e.g. the true rate of adoption), some unpredictable (e.g. the PBoC decrees) and the rest is hard to translate into price changes.

No wonder TA is so popular.  But of course TA cannot predict unpredictable events either.

My undertanding of the bitcoin fundamentals is that the rally of October-November 2013 was due to the opening of the Mainand China market, and the decline since then is due to the shrinking of that market.  The brief plunge to 340$ on Apr/10, apparently due to rumors in China, tell me that  if the Chinese market were to close today, and absent any other positive development, the price would fall to about 300$ or less.

On the other hand, the market outside China should support at least 120$, as it did in September.

This last estimate assumes that the April 2013 rally was NOT due to an early partial opening of the Chinese market.  Was it?

Salesmen want optimistic estimates; traders should want realistic ones. (But I am not claiming that mine are realistic.)

Those are "fundamentals". Technical Analysis assumes that all the trends of the fundamentals and their influence on price are "encoded" in the price history, so there is no need consider them explictly.

Hey, my goal was just to make some salutary fun of price extrapolations.

Frankly, I have no idea what the price will be next year.  AFAIK, the only model that has some claim to statistical legitimacy is the log-Brownian (or geometric-Brownian) model, which gives a very broad probability distribution, having 50% chance above today's price, 50% below, for any future date.

Indeed, sorry.

He writes that "0.005 USD" is just an arbitrary value.  It seems that there is no data for 2009 -> 2010, and perhaps 300 to 400% 30000 to 40000% for 2010 -> 2011.

I could try to fit a cubic polynomial to those 4 data points, but you would hate the result even more.  

I just used the data that the quoted post used.  What were the percentage changes 2009 -> 2010, 2010 -> 2011?

Don't look at me, obviously that is not mine:
* My plots are nicer.
* My private Technical Analysis method gives 0 USD/BTC by July  27th, 2014 19:23:15 UTC.
(Hey, it is still better than that of those Technical Analists on TV who predicted negative price!)
 

Note that the percent changes (not increases) from year to year were

 2011 -> 2012  300%
 2012 -> 2013 3024%
 2013 -> 2015  314%

Neither constant, not uniformly increasing.

What will be the percent change 2014 -> 2015?

The simplest formula that will fit the three data points above is a parabola. Working in log scale, this is what I get:

The red dots are actual BTC prices in USD on Apr/24 of each year, as per above. 
The first three green dots are the actual percent change from each price to the next, as per above.
The green line is the quadratic A*y^2 + B*y + C that passes through those three points.

According to this quadratic, the percentage price change 2014 -> 2015 (fourth green point) will be 0.34%.
That is, the BTC price on Apr/24 2015 will be 485.00 * 0.0034 = 1.64 USD. 

(Before jumping off the window, check what Mark Twain had to say about extrapolation.  )

That was just a "TA trap" 

It is surprising to see a pattern, since most of the ups and downs are clearly related to external events -- such as the "bug in bitcoin" and the Caixin article.  Perhaps these just trip the spring that some "market sentiment cycle" has strained?

# 6. OKCoin.

Trying to make sense of the Chinese price and volume:

Since it was the yuan input channels that got strangled, not the output ones, we would expect that the downtrend of the last ~3 months would accelerate, because the balance of yuan in the exchanges shoud decrease at an even higher pace.  Instead, the downtrend has apparently slowed down.

One hypothesis is that they had many clients who would repeatedly put money in, trade trade trade for a short time, then take their money out.   After the deposit channels got strangled, perhaps it was mainly this clientele who reduced their activity -- less often, with less money.  That could explain the reduced volume, and also why the decline in price slowed down instead of accelerating: namely, because those clients were also responsible for part fo the net outflow of yuan from the exchanges.

Maybe...   

The weird thing is that they appear to be continuously shuffling their orders (e.g. pulling half a dozen small buy entries just below the spread, and then posting one or two slightly larger entries, at a slightly higher price), even when no trade follows.   Why can't they decide once and for all the price they want, and stick to it? 

[ Sorry for posting in English but I do not speak Chinese and do not trust Google Translate. ]

The daily trading volume in the main Chinese exchanges (Huobi and OKCoin) was very low yesterday (Apr/23).  The volume is even lower today (Apr/24).  May be one of the lowest daily volumes of this year.

What could be the cause of the low volume?  Is today a holiday in China?

[ Google translation follows.  I hope that it makes sense. ]
[谷歌翻译如下。我希望这是有道理的。]

[对不起，张贴在英语，但我不会说中国话和不信任谷歌翻译。]

在中国主要的交流（Huobi和OKCoin）的每日成交量很低昨日（Apr/23）。体积甚至更低今日（Apr/24）。可能是最低的日成交量今年之一。

这可能是低量的原因是什么？今天是中国的假期呢？

The store may have posted it on their webpage, why not?

If not, the police may get it from "Google for cops", a variant of Google that does not automatically censor items that may be sensitive personal data, like credit cards, SSNs, passwords, bitcoin addresses (or keys)...  The bandit X may even help them by leaving the address and store name posted on some public site, such has this forum.

As a last resort, the police could ask the friends at NSA; they know everything (even who is the real Satoshi).

You mean "will not be possible an shouldnot be", right?


Sorry, my point is that bitcoin is not the solution to the problem, it is its cause.

Safe ways of storing bitcoin keys will not prevent bitcoin thefts, any more than physical safes can stop white-collar crime.

Can you suggest how the police (or the bitcoin community, or the victims) could identify a bitcoin thief -- say, the MtGOX thief -- other than by tracking the stolen coins, and hoping to find such cues?

Don't you agree that a hacker or an insider could steal half a  million bitcoins without leaving any other clues?

If the MtGOX thief gets away and keeps the stolen bitcoins, why would other people faced with similar opportunites not take advantage of them?

Someone posted on another thread an  e-mail of some e-store (Survival Food) that used MtGOX as a payment processor, presumably lost money in it, and is re-evaluating their adoption of Bitcoin because of "the Bitcoin community reaction to the MtGOX situation".  I think I know what they mean. The inevitable corollary of the dogma "government is evil, police is evil" is "there is no crime, there are no criminals and victims, only smart guys and stupid guys".   

It is too early to be sure, but it looks like the daily volume at Huobi and OKCoin for the day just starting (Apr/24 CST) will be even less than the previous one (Apr/23 CST) -- which was already among the lowest this year.