This is not trading advice. Its just me speculating wildly. Just because I write this stuff down here doesn’t mean I am buying or selling anything at all. Maybe I’m only trolling? Perhaps I don’t own a single PPC? Who knows? Does it sounds like I know what I talk about? If I told you that I beat index by more then 100% would you believe me? Maybe you should’t! You’ve been warned.
Timeframe: longterm
This is BTCUSD and PPCBTC: http://imgur.com/JTS58UV I think it looks like the PPCBTC is a leveraged play on BTCUSD. I’ve been studying BTCUSD since $10. Something that I see time and time again, is resistance being broken on big volumes and flash crashes down to technical support levels. I’ve developed a strong feeling that technical traders are milking profit from people that have not clue what trading is all about.
Lately we have been seeing a flood of bad news and people have been selling more then buying, pushing down the price to “the magic number” $500 (people love round numbers and can not help trading on those, reinforcing their importance as support and resistance levels): http://imgur.com/grgGlYR This happens to be more or less 50% down from the peak which very often marks the end of a retracement, i.e. those selling have sold all they want to sell and those buying are holding what they bought.
From a technical perspective the price could very well go up from here. From a fundamental perspective we have both good and bad news. China is a thorn because we can never be sure what is going to come out of that. US is a thorn because they keep hampering growth through regulation. That said, the kind of regulation that US is pushing might very well enable mainstream money (such as institutional money) to enter the sphere. For sure only specialized hedge funds are trading BTC (besides crazy bitcoiners) but pension funds will not until they know what they are buying from a regulatory perspective. VC money is flowing into the infrastructure which bods well for the future and hey… BTC is the perfect hedge against stocks and treasuries. At least that’s what I think.
Since BTC is not coupled to the rest of the market really (not yet, at least that’s my opinion however wrong that is) you can use BTCUSD so offset losses on taxes and if everything else goes belly up, BTCUSD could overperform. I look at it like this: people are selling the bad news now and buyers are rather buying the dips instead of the resistance thus we get no real breakouts and no major bull rallies. In my opinion it is not a longterm bear market technically speaking. Not yet.
My personal belief is that this is a time to buy. Some fiat (at least 10% of net position, if that is not to much to trust an exchange with) should be kept at an exchange to take advantage of dips. When the dips occur the spikes up should be sold, to offset the losses on the already established BTC position. If BTCUSD goes very very low, BTC should be bought and added to the BTC position.
If BTCUSD starts to go up, one should divest parts of the BTC position into PPC instead (since its a leveraged play and these PPC should be used for minting). Though one should never go all in or all out, this is the time to go more in and be less out. But some fiat should be there to take advantage of super low prices, if that happens.
EDIT: To clarify. I think it is better to hold USD and BTC then PPC when PPCUSD is going down. When it goes up it is better to hold PPC. It is never ever wise to have only USD, only BTC or only PPC. Never wise to have neither of those either. Therefor a core position in PPC is smart I think. Then a trading position and this is the position I’m talking about how to manage in me writings above.
If one bought the dip, I think this is a good time to sell the rally. First I would sell PPCBTC and then PPCUSD. This latest move is to extreme and the odds of a pullback is very high. If it falls one should again buy the dip. The reason it goes up now is because price have fallen to much and all the bad news have already happened, i.e. the China thing is already history (buy the rumor sell the news) and now it bounces up. The thing is, when it goes up now it goes up a lot in terms of percentage points and traders will take profit on the very heavy resistance that have now formed. This will drive price down again.
One should also take a look at the low volumes. There is not much participation in the PPCBTC volume, but PPCUSD volume is high on this rally indicating that people are taking profit having already doubled their money from ~1.
Could it go higher from here? Yes of course. As I already said previously, I think this latest drop has been a buying opportunity and the only thing one should be selling here is the “hedge position”.
EDIT: (Instead of bumping this thread I am simply modifying this latest post). PPCUSD is now at 2.626, a little bit up from its low point of 2.5 after having peaked out at 3.2. BTCUSD (which PPCUSD seems to be tracking) is as I predicted would happen bouncing of heavy resistance and PPCUSD is following that action. There was a spike in volume as price rallied upwards,but now look how the volume is tapering off. What some people tend to miss is that price from 1.281 to 3.249 is a tremendous gain. Of course traders take profit and the big question is now whether the price will go up from here or not. I can tell you this, either price will go down from here or price will start to consolidate with a low point at PPCUSD ~2.2. If price start to bounce around in this range that is a very good sign. If price kind of just crashes lower, I suspect we will either see much lower prices or at least a double bottom at 1.281. If PPCUSD goes down that much, depends on what happens with BTCUSD, which I think would be destined to go down to the 100-200 level. If that were to happen I think PPCBTC is going super down and actually anyway I look at it PPCBTC will go down more from here. Anyway, these are not fundamentals in play here I think. Only traders trading the volatility making loads of money when price is doubling and halving every other week.
Just a thought. Previously when BTCUSD has gone up, AltCoins have been kind of lagging (I’m referencing the weekly time frame here). Well I have this feeling that the next time BTCUSD starts to go crazy, I think the big market cap AltCoins will not lag behind that much this time. Maybe, if BTCUSD breaks to all time high that they could fall behind, but until then I think the AltCoins could overperform.
Why?
Because if BTCUSD starts to go higher from here, I believe that it is new fresh money coming into the economy and not old one. New people and who knows, maybe new capital. Old crypto coin money are by this time fully aware that AltCoins are a leveraged play on BTCUSD and for sure PPC (because of its PoS) is like the only real alternative to Bitcoin and the Bitcoin forks.
EDIT at BTCUSD 484: This is what I’m talking about. Price retraced down and now it will either go up, which means we’re consolidating and it not (if price goes below 470) then my bet is that we will see much lower prices (either double bottom or 100-200). In the mean time we have PPCUSD trading down to support. I would not be surprised if price goes down to 2.3 and would not panic if it does. However, if BTCUSD start filling then we will see the same on PPCUSD. Personally I would not buy PPCUSD or BTCUSD at this levels because one should already have bought a good chunk at this prices earlier and only be holding a USD hedging position right now. Now, if price crashes a whole lot, then this USD should be used to buy the lows. This way, if price goes down you can offset losses on your bigger position with this smaller one. Note, this is not the same as doubling down, since this position should be sold at peaks.
ALT/USD prices are affected by BTC/USD because to exit altcoins to fiat, or buy altcoins with fiat, one usually has to go through ALT/BTC, pushing down / push up ALT/BTC on the way. PPC/USD has its own market on BTC-e but PPC/USD still largely follows BTC/USD. Why? I think it is because people don’t yet evaluate Peercoin for its own sake. So I guess after Peershares are incirculation, when PPC/USD is down people will see it as an opportunity to buy cheap Peershares – cheap stocks that is – then PPC/USD will have a life of its own. Exiting times ahead.
Interesting thoughts! Let’s see if I can contribute to the discussion. Hmm, I think I’ve always thought that bitcoins have very little fundamental value an super extreme speculative value. By this I mean that I believe that there are very few things that you can only buy with bitcoins. Perhaps drugs and guns and what not, but that economy is really small. However, the speculative value is immense.
Why am I so sure that bitcoins are mostly a speculative bet? Because when you look at the charts, you can see very low volume during consolidation and then extreme volumes when it breaks through the “walls”. If volumes was kind of evenly spread out, that would tell you that bitcoins are bought and sold all the time, but when there is extreme volumes at breakouts, that tells you that we have traders in the market pushing and following price. Traders. Speculative bets. Not fundamental need or requirement. Also it is kind of obvious, everywhere you can use bitcoins you can use USD or other fiat.
Peercoins I think is even more so. I mean, there are not even payment processors and no big businesses accepting it (yet). Why on earth would you want to buy something that you have no use for? Well, if you think that Bitcoin is flawed and that Peercoin has the potential to replace it, it is a wonderful chance of a life time investment. Speculative indeed.
My bet is that most people holding peercoins also own bitcoins. When their bitcoins go up in value and tremendously so, they divest part of this wealth and buy peercoins. They buy peercoins for bitcoins (PPCBTC) now this creates an arbitrage opportunity so PPCUSD naturally have to follow suit and this pushes up the price of PPCUSD. Since we have this kind of relationship when it goes up, we have it when price goes down and when BTCUSD goes down people also sell their peercoins. Since people know that this usually happens, we get a feedback loop that reinforces this behavior. Now people who don’t know nothing about Peercoin probably just buy it because it is a “leveraged bet on BTCUSD” and so forth and so on.
When will PPCUSD detach from BTCUSD? When that happens we must also see PPCBTC detach from BTCUSD because of arbitrage opportunities. If for some reason Bitcoin fails and Peercoin survives, then for sure we will see this. If there is a lot of talk about mining centralization in Bitcoin and Proof-Of-Stake as a solution then Peercoin awareness will increase and push up PPCUSD and the relationship with BTCUSD could hold only that PPCBTC goes up.
Peershares are interesting. I suspect that you will be able to buy Peershares for all other types of currencies. I also suspect that in the beginning, if PPCUSD is falling in price then PeersharesUSD will also fall in price because of arbitrage opportunities (USD will be better to hold because you will be able to buy more Peershares later on). If price moves up I suspect that PeersharesUSD will overperform (for good companies) because they will pay peercoins dividends. Peershares will therefor, I suspect, be a leveraged play on peercoins, which will be a leveraged play on BTCUSD. Well, until the Peercoin economy starts to replace the Bitcoin economy.
My personal take on all of this, is that people who love Peercoin and want to see it become huge, should sell at least some peercoins when price goes up. This will dampen the speculative manias that plays into the hands of pump n dumpers (normal folks loathes volatility). Then they should use some of this cash to buy back peercoins when price falls, to create a support and cushion the fall and thereby decrease volatility.
I repeat if you love Peercoin, sell some (not all) when price goes up and buy back when prices goes down. Best case scenario is that you will make money by doing this, while help dampening the volatility making the price more stable. This will make Peercoin even more attractive to business owners who just might, if the volatility is really low, just keep their peercoins instead of dumping them for fiat.
Anyway, I see like so. The price of peercoins will not detach from bitcoins until either Bitcoin starts to fail (or people start discussing it) and/or the Peercoin economy is so big that the “fundamental use” (not speculative use) that i displaces the speculative traders looking for arbitrage opportunities.
I’ve got no doctors degree and don’t know what on earth I’m talking about, so I’m probably very wrong.
EDIT 1: Though I might be wrong I have to admit to over performing index continuously for more then a year and also predicted both the economic macro environment were in right now, as well as the price of gold and a whole lot more. I’m not telling this to brag, just want to emphasize that when I say: sell some peercoins high and buy back low, I actually kind of now what I’m talking about. If you want me to elaborate further on this topic then just ask for it in this thread.
EDIT 2: Still reading this wall of text? :-*
It starts to get hazy but I did finish ;D . Anyway the value of Peershares is that share values increase because of valuable real work is generated by the issuing company – it is not by playing a zero sum game. Peershares are denominated in Peercoin so if we believe the whole economy is good and companies are making money, then the peershares company will likely keep buying peercoins to distribute dividends. The inflow of funds into peercoins will support the fundamentals of PPC/USD.
I’m interested in expanding the idea of selling high and buying low. If we leave that at the individual level, people might not pay attention, be late to the game or getting nervous or excited at times and with that we have the swings back.
What if you can define a set of rules for a fund managed by a decentralised autonomous organisation (DAO)? Like we have bots which sell and buy on the exchanges. What if we all trust a small share of our Peercoin to the DAO based on those automatic rules? That DAO can be registered on Peershares although it’s key purpose wouldn’t be to pay dividends (like a commercial fund), but it can. It’s purpose would be to stabalise the coin to the extent of the size of the fund based on the defined rule set. We could vote on changing the rule set once in 3 months or something like that.
The benefits would be for all long-term Peercoin holders, not for speculators as pillowtalk indicates. It would be like an insurance premium to secure and improve the value of your Peercoins in the long term.
The DAO blueprint
The DAO can just be a wallet (or number of wallets) on the major exchanges. Each wallet would have the same defined set of buy and sell rules in a bot (program with the rules when to buy/sell). The bot has to be made and run somewhere, that is the most complicated part. So
- We need to agree on the ruleset (which requires a voting mechanism)
- We need a developer to write the bot
- We need to host the bot on one or more servers in the cloud in a way that not anyone can tinker with it without having the majority vote to do so.
- We need to decide which exchanges would be suitable and who would set them up
- We need a mechanism to withdraw from the fund (including withdrawal limits, time spans and fees on early withdrawal)
Issues:
a. with wallets on exchanges we would miss out on the 1% PoS. Might be able to mitigate that but it will make it much more complicated.
b. will need some core group of motivated people with the same ideas to establish this DAO and all its rules and ways of changing rules.
Interested in your thoughts. Is this within reach or something for next year or thereafter? Or is it something we shouldn’t even consider as it may hurt speculators which dictate the value (chicken and egg problem).
Should I open a separate thread for this?
i like the idea, only it reads like dead on arrival when you spell it DOA :
Lol and oops, will make it DAO as it should be
One fear that I have is that market forces will not be allowed to do price discovery. Crowd sourcing is super powerful and I’m not sure that a single entity will be able to accurately price assets, but technically speaking I think it is doable if the wallets are big enough and the algos really well written.
If the wallets are to small I fear traders will frontrun the DAO algos and sell before the DAO does and buy before the DAO does, forcing the algo to chase the price and thereby loose profit margins. If the wallet is extremely big and the algos are impossible to frontrun, I think it could work. It would be similar to what the FED is doing and how gold is being manipulated.
I would love to see Peerpeople learning a little more about trading, so that people for themselves can make educated purchases. Would be really nice if Peerpeople could outsmart pump-n-dumps and profit from such attackts instead of suffer from them.
EDIT: By the way, notice how accurately I predicted the 2.3 level as an important support for price. Price went down close to there and then it went up again. This is what I’m talking about, being able to identify key areas of support and resistance. I have been doing this kind of analysis for a few years now and it is all about identifying probabilities. No one has a crystal ball, but the fundamental analysis can tell you which asset to buy and the technical analysis can tell you when to buy.
[quote=“pillow, post:11, topic:2110”]One fear that I have is that market forces will not be allowed to do price discovery. Crowd sourcing is super powerful and I’m not sure that a single entity will be able to accurately price assets, but technically speaking I think it is doable if the wallets are big enough and the algos really well written.
If the wallets are to small I fear traders will frontrun the DAO algos and sell before the DAO does and buy before the DAO does, forcing the algo to chase the price and thereby loose profit margins. If the wallet is extremely big and the algos are impossible to frontrun, I think it could work. It would be similar to what the FED is doing and how gold is being manipulated.
I would love to see Peerpeople learning a little more about trading, so that people for themselves can make educated purchases. Would be really nice if Peerpeople could outsmart pump-n-dumps and profit from such attackts instead of suffer from them.[/quote]
Your fears are justified and I thought a bit about that. To be able to outsmart the traders the algo need an element of randomness. You could have a pool of a few algos, being randomly selected when a defined situation occurs. There would still be some risk attached to that as the selected algo might not be the best suited one, but it would at least confuse traders. Ideally you would have an AI to make the right choice at the right time, but that’s still a bit beyond reach.
I think my question is would we want to go there as a community, if we had the means to set it up properly.
You will need a reasonable big wallet to be able to make a dent (100k PPC to start with at least). Unfortunately in this case, we don’t have a premined bunch of PPC we can use for this purpose.
[quote=“Cybnate, post:12, topic:2110”][quote=“pillow, post:11, topic:2110”]One fear that I have is that market forces will not be allowed to do price discovery. Crowd sourcing is super powerful and I’m not sure that a single entity will be able to accurately price assets, but technically speaking I think it is doable if the wallets are big enough and the algos really well written.
If the wallets are to small I fear traders will frontrun the DAO algos and sell before the DAO does and buy before the DAO does, forcing the algo to chase the price and thereby loose profit margins. If the wallet is extremely big and the algos are impossible to frontrun, I think it could work. It would be similar to what the FED is doing and how gold is being manipulated.
I would love to see Peerpeople learning a little more about trading, so that people for themselves can make educated purchases. Would be really nice if Peerpeople could outsmart pump-n-dumps and profit from such attackts instead of suffer from them.[/quote]
Your fears are justified and I thought a bit about that. To be able to outsmart the traders the algo need an element of randomness. You could have a pool of a few algos, being randomly selected when a defined situation occurs. There would still be some risk attached to that as the selected algo might not be the best suited one, but it would at least confuse traders. Ideally you would have an AI to make the right choice at the right time, but that’s still a bit beyond reach.
I think my question is would we want to go there as a community, if we had the means to set it up properly.
You will need a reasonable big wallet to be able to make a dent (100k PPC to start with at least). Unfortunately in this case, we don’t have a premined bunch of PPC we can use for this purpose.[/quote]
If I had to vote, I would probably not want the community to come together to affect the price. But I would love to see people being able to profit from “hot money” screwing with price. I.e. I would like the people who understands Peercoin to be the one who profits from the price crashing and then people who do not understand Peercoin to buy at the tops.
I’m not sure that all the people who believe in Peercoin can also stomach a 75% drop in price “just like that”.
Actually I’m about to launch a fund (a legal entity, registered and all of that) and I will be doing exactly this kind of trading. I will sell peercoins when price goes up to much and then buy back when it drifts back lower. The goal is to take the fund to the stock market (still far off in the future though). Hopefully I will be able to do my part and contribute what ever I can to stabilize price.
Price is right now at 2.079 USD on btc-e. I think it will go up now. :pbjt:
Why? When you look at it at lower time frames, you can see how resistance is slowly breaking down. These kind of slow moves are constructive because it tells you that a lot of people will have a lot of time to think and either sell or buy, i.e. weaker hands will sell to stronger hands. Since its not shooting up through the roof, we could argue that people have had time to react to the current levels, i.e. panic selling people have already sold.
This last week people were afraid that price would go down this weekend, but the price is holding. There is low volume, telling me that sellers are out of the market. Trend following, rally buying people are also out and they always are when price is consolidating. This is a time to buy in my opinion. The prudent investor will be selling if price rallies ahead of itself.
Resistance will be seen at about 3 USD and there price will go down, creating another buying opportunity.
I desperately hope that price will crash down to at least 1 USD but I fear I might not get that lucky. :rant:
EDIT: About this China thing. I think that China thing was the best thing that ever happened to the price. The crazy speculative bubble fueled by rampant buying from China pushed up the price so much, that nobody in their right mind could call the price of bitcoins anything less then interesting. The market have shown that the demand can outstrip the supply and that insane price rises are possible even at these high three figure levels. The crash was very good as well, because it created a new buying opportunity for all the new people hearing about cryptos. I am really really looking forward to China hitting Bitcoin hard I hope they ban it. Why? Because the China market is non-existent and the price is no longer reflecting bearish sentiment from China I think.
This means that China will be a perfect laboratory to see what happens when a state tries to ban Bitcoin. If China manages to ban Bitcoin and kill off all the use, then we know that Bitcoin in the west will only work as long at politicians accepts it. If China fail to kill the use of bitcoins… well then all bets are of and we will go to pluto and beyond. Also if they fail, it means that some smart people have managed to do some smart things and those things we will copy here if our western politicians tries to do anything stupid.
Then in the end Bitcoin will commit suicide as designed by the protocol and hardfork. Litecoin will join in (if not doing it first itself) and stuff like Peercoin, ripple and those things will emerge as market leaders.