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This is some of the shittiest numerology. In Bitcoin (and financial series in general), for which consecutive returns have no memory, that "Mayer multiple" is not self-averaging as this seems to presume; it is thus completely meaningless.
Old guy here, went through market crash in 87 AND the internet bubble 1997-2001. I remember guys spewing TA back in 2000 justifying whatever. It all went to shit in the end because TA seemed unable to identify hype.
Remember that the Internet bubble did NOT burst in a day, it was a several months long process. First the BTC (think Pimentoloaf.com) collapsed, and money shifted to BTB (think early cloud). Then the BTB collapsed several months later.
I worked in the industry, as did almost all my friends. I was lucky, I got out, no one else I know did. All these years later it's still unpleasant to think about, one friend still brings it up at least once a year.
Please people, do not risk your future over this, it's hype, just like it was in 1997 when Netscape was the future.
The internet bubble didn't pop. The DOT COM bubble popped. The internet is still here and bigger than ever.
I was there too when the dot com bubble popped. I didn't lose money. Some friends and I had a company that basically sold shovels to all the startups digging for venture capital gold. I remember the day when three clients called and asked us to take the ".com" off their marketing materials. All of a sudden being a "dot com" was bad. It was the beginning of the end.
There's some BIG differences between the dot com bubble and cryptocurrency "bubble." Yes, crypto has been overhyped for the past couple of months. Yes, this correction was due. But that's pretty much where the comparison ends.
Your anecdote is interesting but the analogy isn't accurate.
Crypto is not a dot com. Crypto IS the internet. And it's gonna be UUUUUGE! (But it might be a while, and there will be many winners and losers along the way).
>The internet bubble didn't pop. The DOT COM bubble popped.
Nope, the dot coms blew up first. But there were plenty of other internet companies that were not DOT COM, (we called them BTB - business to business). They were the back end infrastructure plays, that went into bubble mode and burst as well. A lot of the refuse ended up owned by Oracle.
But regardless, the internet itself didnt go anywhere. It just got stronger and more valuable. Buying bitcoin would be like if you could buy shares directly in the internet itself. Others that want to use the internet would need to obtain these shares as well. The shares would become quite valuable. With the internet the shares are all infrastructure (hardware and large services). With bitcoin it is a combination of infrastructure (mining equipment, services) and the exchange unit (bitcoin). So I think owning bitcoin could end up being quite useful as time goes forward.
> Buying bitcoin would be like if you could buy shares directly in the internet itself.
That's pretty much exactly how people who didn't understand the internet and browsers thought. They thought owning a part of the first and only 'browser' company was like owning a piece of the internet. It was NOT! The things you read that justify investment in ANY crypto currency all eventually evolve into techno babble that doesn't hold water when scrutinized, at least for me, and I've been at it almost 40 years.
I remember when Amazon launched, and it illustrates a good point. We (all us techies working at infrastructure companies) thought nothing of it, other than it was a pretty audacious launch at the time, (every book in the world on-line!). None of us back then, even though we were deep into the technology, could of envisioned AWS.
Those that fail to study the past, are doomed to repeat it!
EXACTLY!!!! Nobody knows what kind of business model will ultimately figure out how to make some kind of profit out of crypto currency. But one thing I can tell you, simply mining / owning bitcoins is not that business model.
I'm actually astounded, seeing as the internet bubble wasn't THAT long ago, that so many are being swept up in the hysteria. It's Netscape all over again.
Ah I didn't get that in your analogy. You may be right but I'm not convinced, yet. A lot will depend on if Lightning Network makes it viable as a payment system. Bitcoin still has the advantage of having the most users. From what I understand, the "network effect" advantage is huge. It's also the most "mainstream" being on exchanges and all.
Yes, but this method works only right now.
This did not work in the first 6 years of Bitcoin growing exponentially. Also this average did not work in the summer of 2016 and first half of 2017. Also the last few months was out of the moving average.
Some experts say to forget the bollinger band, Fibonacci retracement and moving average indicator. The simple moving average points are traditionally succesfull, but Bitcoin is a new dimension.
Have you ever tried the minimal-points ratio technique and failed? What about the extended indicators?
Many men abuse the BOTC (bounce-off the candlestick) method but they miss the sequence of number because Bitcoin grows exponentially. Meaning: we need to use uniplanar algebra such as logarithmic and Napierian (or Naperian) algorithms to calculate the continuously compounded return.
By doing this, you are actually creating a 3D image, universed, towards a pyramid scheme with the top moving into the 4th dimension. The wormhole, as we call it, co-insists by retracting the lowest alternative universe. Inside these future movements the platform lines up with the moving pattern.
What you really need to know is: "Does the trend make the chart, or the chart make the trend?"
So, let's all learn this, and let's all be millionaires because you can calculate it by new modern artificial mathematics! Use it to your advantage.
typically the price at any given point in time is around 1.47 times the average price of the previous 200 days
we were way out of the norm for the past month or so, and now the price is back in the usual range
> we were way out of the norm for the past month or so, and
> now the price is back in the usual range
Exactly.... I would affirm this is a useful observation / piece of information to have.... if you believe in the long-term future of the Bitcoin blockchain as a store of value -- as it could suggest when the price moves significantly below 1.4X the SMA, this measure suggests it would be a huge buying opportunity, whereas, when the price is 1.5X or higher, then it's probably not the best time to buy and may be better to sell some --- even if there is what looks like or appears to be a dip on the chart.
The 200 day moving average is an average of the price over the previous 200 days. For example, if Monday it was 1,000, Tuesday it was 1,500, and Wednesday it was $2,000. On Thursday, the 3 day average would be $1,500. (1k+1.5k+2k)/3. So the Mayer Multiple is the current price of bitcoin, divided by the current 200 day moving average. Moving averages essentially allow you to more effectively track trends because it will smooth out the daily volatility. The 200 day moving average is extremely prevalent for traders and investors to use for long term trends.
Yes, there are numerous ways you can look at averages on charts. You can use this site and click on the dropdown that says Overlay. There will be an option for SMA. You can put in the days for the average # of days. Just make sure that to look at the daily you have the 1D option chosen from the top left. There is a drop down next to where it says GDAX BTCUSD.
I think what it means is that the drop should stop soon(ish)
From my noob-level tea-leaf readings. We're either stopping before 8500. If we don't, it's going down to 5000 and then that suicide prevention hotline will really come in handy.
I think we can safely assume the last 48 hours is more than volatility.
Call it a correction if you like, or even a signal to something else, but describing it as volatility is a little optimistic, imo.
Yawn. Easy come. Easy go. Wake me up when we see a crash like the one from $30. Let the price settle back down at $2k let it brew in people's minds for a few month or a year two and we will have another ATH. This run up was insane but as long as the miners keep on mining, the developers keep on developing and the hodler keep on hodling we are not done here yet.
Mark my words, we wont see a crash like we did at $30 for 2-5 years, and when we do it will be a bubble burst that will take years to recover from. There's just too much capital in BTC now for it to drop 80%+ and it not be devastating.
Right, if you only invested 5% of your capital you don't care. But if BTC goes down to $2k a lot of people will get devastated. Ideology is fine, but not when it reaches the level of fanaticism. If BTC goes down to $2k people will stay away. Why? Because there's such a thing as money necessary for living, earned by work.
My friends, who have been asking me about crypto since december, are talking of selling. (or did sell)
They didnt hear me when I said HODL Bitcoin. Although, I probably said this daily.
Its not even a lot of money, these cats put ~$150 in.
These humans are the ones that buy high and sell low.
If you want to see who the losers are, the ones that cannot wait.
Void of all context, sure. Hold. But anyone who can look at the chart and honestly be dumbfounded as to why it is crashing is an idiot. With that context in mind, cutting losses and buying in lower, or at least hedging through shorting mechanisms would be actual investing.
What? You clearly don’t understand anything about investing if that’s what you think it is.
Investing is buying something at a lower value with a reasonable expectation that you can sell it at a higher value in the future. That requires having a finger on the pulse of its intrinsic value as seen by the majority of the market. If the price far exceeds that value, either your model is wrong and you should fix it, or the asset is overvalued and you should collect your profits and buy it after it corrects.
Traditional investing also includes the promise of future cash flow, which further increases something’s intrinsic value.
But just buying random shit and parking your money isn’t “investing”. Not in the least. Investing requires an understanding of what you are buying.
If you don't understand the asset you're buying, you're right. In that case you're just gambling and if you don't take profits when you see them you'll be In the hole. But if you understand that an asset is worth 100 times its market value, you would be an absolute moron if it drops 50% and you decide to sell when it's 200 times undervalued. Right?
If you truly understood the asset you are buying you would have seen the activity since October as mania, completely unfounded, and unsustainable in the short term and would have taken profits as those of us who *do* understand did.
If you hold onto a stock that skyrockets for no other reason other than hype, earnings stay the same, and nothing fundamentally has changed, you sell at the top and buy back when it corrects.
Hence the “buy low sell high” strategy. Instead, in crypto, people confuse any decrease in price an opportunity to buy, even though it was no lower than it was a week ago. So you have a situation of at least buy high sell high, or buy higher sell low.
> If you truly understood the asset you are buying you would have seen the activity since October as mania
Nope. Look at the price graph on a logarithmic scale. It'll be a lot clearer what's going on: the same thing that has happened dozens of times before: https://www.reddit.com/r/Bitcoin/comments/7qufzj/you_laugh_you_lose/ . Bitcoin's value is still 1/100th of what it will be in 10 years - that hasn't changed (except that it's gotten closer to realizing that value).
> If you hold onto a stock that skyrockets for no other reason other than hype
Don't pretend to understand bitcoin if you think this is all just hype...
> nothing fundamentally has changed
Except meteoric growth in user-base and awareness, and huge advances in the technology?
> Hence the “buy low sell high” strategy.
That's not a strategy. That's called hindsight.
> people confuse any decrease in price an opportunity to buy
This isn't confusion. These people, like me, believe that a bitcoin will be worth over $1 million. Rather than buying every day, they're buying periodically during dips to maximize their purchase.
You clearly don't understand why bitcoin is revolutionary technology. So rather than writing snarky comments that imply you know sooo much more than everyone, how about asking questions about how bitcoin works and why its going to be so big? Just because you don't understand doesn't mean its all hype.
> Nope. Look at the price graph on a logarithmic scale. It'll be a lot clearer what's going on: the same thing that has happened dozens of times before: https://www.reddit.com/r/Bitcoin/comments/7qufzj/you_laugh_you_lose/ .
No, it has risen 15x it’s value only a handful of times, and 100% of the time it has crashed back down.
> Bitcoin's value is still 1/100th of what it will be in 10 years - that hasn't changed (except that it's gotten closer to realizing that value).
Sure. But we aren’t 10 years from now, and the value is far more right now that what it’s actual use case is.
> Don't pretend to understand bitcoin if you think this is all just hype...
Coming from the guy fixated entirely on price... read Mastering Bitcoin for once and then come talk to me.
> Except meteoric growth in user-base and awareness
User base of what? Speculation? Literally less than 1% of bitcoin is used for anything of substance beyond hype driven speculation past about May of this year. Same thing happened in 2013. They all left following the crash. I expect this to be no different. Those who are in it to get rich quick don’t stick around when they aren’t getting rich.
> and huge advances in the technology?
Such as? You still haven’t answered me. As a general developer, and someone who has read mastering bitcoin multiple times over, I can handle any “technology” concept you are referring too. But “ghost” technology doesn’t count.
> That's not a strategy. That's called hindsight.
Lol, sure then, everyone here is investing in hindsight. Thanks for proving my point.
> This isn't confusion. These people, like me, believe that a bitcoin will be worth over $1 million. Rather than buying every day, they're buying periodically during dips to maximize their purchase.
So why did you not just purchase more from the get-go? Why wait until it rises substantially on the hopes it comes back down?
> You clearly don't understand why bitcoin is revolutionary technology. So rather than writing snarky comments that imply you know sooo much more than everyone, how about asking questions about how bitcoin works and why its going to be so big? Just because you don't understand doesn't mean its all hype.
Quite the contrary. In fact, I’ve been here probably far longer than you, have made commits to the code base, and actually follow development. Instead, I just despise the hype and bullshit that sets bitcoin back because it further deteriorates the goal of the *actual technology* doing what it was designed to do. But sure. Ride your high horse and keep on hodling those bags. Hope that strategy works out for you.
Do tell? All that has changed was Segwit was actually implemented, and that happened in August. We had previously known about Segwit for over a year at that point.
I’m talking particularly from $5k to 17-19k... what at all happened between October and mid December that substantiated the run up, other than obvious mania?
With crypto: sell when the price goes down is not an investment strategy either.
Selling to cut your losses is only good if have a reason for suspecting more losses ahead other than being disappointed by recent performance ---- in other words, you learned something that fundamentally changes your position on the future of the thing,
OR you were making a short term trade with specific technical criteria involved, and the price you observed showed you that you were wrong and need to back out.
A perfectly viable reason to cut your losses would be to look at the near 400% rise over 2-3 months and realize it wasn’t sustainable, look at the momentum of the price, and realize this is the burst of a mania and it will fall back to at least what it was before 2-3 months ago.
This is even more so the case in your second situation. If for whatever reason you looked at it going to 19k and thought “well this will keep on going”, and it has now reversed about 50%, then chances are it will continue to reverse back to the point where the mania began. Hence, your analysis wasn’t fulfilled and you should cut your losses.
Either way, investing based off of meme advice is fucking stupid and you deserve to lose everything you lose in that situation.
I've used the same advice as I do for gambling with investing in crypto.
1. Go in with as much money as you are okay with losing.
2. Pick an amount of money that you would be happy with winning.
3. Play until you either lose everything OR hit the high number and cash out.
4. Pocket the original amount of money you invested.
5. Figure out if you want to go back in or if you're happy with what you've gotten so far.
Anyone trying to make a living off of this is as dumb to me as someone who is trying to make a living in a casino. You could know every line of the Bitcoin source code and it wouldn't make you any more capable of predicting the future of a FOMO gamble like this.
Sure SOME people might be exceptions to the rule, but that's just life. SOME people will win the lottery, SOME people will become famous musicians, SOME people will make millions of dollars a year from YouTube videos...
Always assume you are not one of those people.
> You could know every line of the Bitcoin source code and it wouldn't make you any more capable of predicting the future of a FOMO gamble like this.
What a blatant lie. I don’t even know 20% of the source code and I was calling this a month ago. You can check my post history to verify if you like. Turned a few thousand into a few hundred thousand and recognized the complete change in attitude and sentiment.
It doesn’t change the long term story, but to pretend like this wasn’t completely ticking obvious to anyone who has been in for longer than a year is sticking your head in the sand.
Investing may seem like gambling, but it isn’t. It isn’t at all actually. There’s a reason why there’s successful investors, yet gambling by definition has the odds against you and there’s no such thing as a successful long term gambler.
Agreed. All we need is for more and more businesses to accept BTC via LN, eventually it will be so much easier, and cheaper, to transact with Bitcoin, it will become common. And then we’ll see 100,000 USD/BTC.