
The chance of a Bitcoin crash is greater than 80% - fraqed
https://www.marketwatch.com/story/the-chance-of-a-bitcoin-crash-is-greater-than-80-2017-11-27?siteid=rss&rss=1
======
dragontamer
While I'm personally certain BTC will crash eventually, I also dislike
technical analysis (which this article is full of).

I do realize that technical analysis is just psychology applied on a
statistical / price level, but I still fundamentally distrust the methodology
for some reason.

Still, props to Bloomberg for referencing studies (even if I don't like how
those studies are done). Maybe if these "indicators" are right, they'll
eventually convince me to start using technical analysis myself...

~~~
mancerayder
I completely agree. I think financial analysts have a way of presenting their
astrology-like technical analysis in a way that seems solid and professional.
But when you look at the technical analysis of the Altcoin world, which uses
the same pseudo-mathematics (for lack of a better term), you really feel how
much of a crapshoot it is. One example is a page I saw yesterday (I wish I
could find it now) which showed the myriad ways in which Ethereum was going
to, as they say, 'break out' of the 'range.' There were about 6 or 7 graphs
with fancy mathematical wording that proved it, with a sort of red marker
overlay on top of a line graph. The red marker overlay has upside-down
triangle shapes, squigglies, and various other markings that prove the math.
It's presented in a shortened, quick way.

As a result of Altcoin analysis, I've become even more skeptical of stock
analysis.

Disclaimer, I inves^H^H^H^H^H gamble 5 digits in both types and half-heartedly
follow stock news (and now Xcoin news).

It's a psychological game with vaguely real underpinnings, all this stuff.

Sure, Bitcoin is a bubble, many altcoins are a scam and many people are going
to lose their shirts. But let's not pretend that stock market trading is that
much better. For the skeptical, I beseech you to look at Seeking Alpha stock
commentaries and analyses.

~~~
dragontamer
> Sure, Bitcoin is a bubble, many altcoins are a scam and many people are
> going to lose their shirts. But let's not pretend that stock market trading
> is that much better. For the skeptical, I beseech you to look at Seeking
> Alpha stock commentaries and analyses.

The difference between BTC and Stocks is rather fundamental.

Stocks entitle me to a portion of the profits (aka: the Dividend) and a
company vote each year. Believe it or not, directly controlling a company and
grabbing a portion of the profits of said company has real value.

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tom_mellior
Maybe someone has access to the study this is based on and can clarify
something: "The researchers defined a bubble as a sharp price run-up over a
two-year followed by at least a 40% drop over the subsequent two years."

OK, so the claim is that Bitcoin is likely to drop 40% sometime within the
next two years. My question is, what is the 40% relative to? Is it relative to
the peak maximum? That is, assuming we are at the maximum right now, would the
40% be a drop to $6000?

I'm asking this carefully because "Bitcoin will drop to $6000" isn't exactly
scary to anyone who bought Bitcoin more than a month ago. On the other hand,
if the 40% is relative to some presumed stable plateau before the price run-
up, i.e., to a Bitcoin price of $1000 or less, that would be enormous.

EDIT: Just to clarify, I understand that "at least 40%" can be considerably
more than 40%.

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tromp
Meanwhile, the chance of Bitcoin recovering from a crash is also greater than
80%...

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CKMo
Anyone that claims something will crash should put their money where their
mouth is and short it.

If someone comes out telling me something will crash but they don't show me
they're shorting it, that makes it suspect. My next immediate question is:
what's your gain in convincing people that something will crash?

See: Jamie Dimon talking smack while JP Morgan invests in crypto.

~~~
riku_iki
How to short bitcoin reliably?

~~~
odonnellryan
Just keep cash on an exchange until it crashes.

~~~
riku_iki
It is not "shorting"..

~~~
odonnellryan
It is going short on the asset.

~~~
riku_iki
Shorting bitcoin would be borrowing them say at $5000 price, selling on the
market on $5000 immediately, and then when it fall to say $2000, you buy it
again, return to owner, and have extra $3000 in your pocket, so you got $3000
from your trade.

Just selling bitcoins now and sitting on the cash will not produce any income.

~~~
odonnellryan
No, but you can make the same bet that BTC will go down: but you don't get the
money for it going down.

You can still go short on BTC: just sell now and buy when it goes down, if
you're sure it will.

I understand it is a different mechanic. In your example, if BTC went to 10k
you'd still have to return that 1 BTC to the person you borrowed it from.

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DmitryOlshansky
The key is 2 sentences: \- researchers devised a “rule” by observing stock
market, likely empirical \- someone was stupid enough to apply it to crypto (a
different market)

First thing a good university will tell a student is the boundaries of
applicability of a law or formula.

Newtonian laws work fine except when speeds get close to that of light, for
instance (simplified).

It’s even more obvious for empirical “laws”.

~~~
spiorf
I can even apply gravity laws here: what goes up must come down. Except when
in orbit...

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jnordwick
BTC isn't an asset, so trying to value it based on previous asset prices seems
wrong.

That said, I all also keep predicting a major fall, but with institutional
money looking forward to the CME futures launch, I on the verge of buying in.
(Market are excellent at making the largest number of people incorrect, so
that probably means we really are on the verge of a crash.)

~~~
dawnbreez
Strictly speaking, stocks are a piece of paper. What makes the stock market
behave as it does is the way people treat the stock. Similarly, the way people
treat Bitcoin is as an asset with very, _very_ high liquidity.

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sjg007
I hope so because I want to buy some.

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boznz
more like 100% its just a matter of time

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PatchMonkey
__TL;DR - just dump it on the bankers. Once they 're into _anything_ , it gets
a bubble. Thats how bitcoin jumped so high in 2017. Get out before the last
bank buys in. We can reevaluate whats left after they crash it with their
money equivalent to the bandwidth in Reddit's hug of death. __

When is the last time anybody here _used_ bitcoin as a currency?

Bitcoin is those bankers' latest toy. Bankers and their money will hug Bitcoin
to death like Redditors to a cute cat gif hosted on a Pentium3 machine.

We already see it - how long is the backlog of transactions that bitcoin rolls
over to the next 10min resolution? When I checked, it was nearly 2x as long as
the miners can resolve in 10 minutes. Or worse, apparently:
[https://blockchain.info/charts/avg-confirmation-
time](https://blockchain.info/charts/avg-confirmation-time)

Fucking traders, clogging _our_ currency too much for us to use it, just so
they can buy in on _the thing that just goes up_. It isnt usable anymore for
exchange.

They're using the collective wealth of the world (banks, being money
safehouses, depositories, etc collectively have magnitudes more money than
what circulates in the commercial economy) to try to join in on a craze they
usually dont understand. They might just see users paying transaction fees
directly, and grow a chub.

When you understand that those investment bankers manage commodities and their
futures, derivatives, bonds, real estate, and the stock market?
[http://money.visualcapitalist.com/worlds-money-markets-
one-v...](http://money.visualcapitalist.com/worlds-money-markets-one-
visualization-2017/) you understand that currency is only a tiny portion of
the money in the world, and these idiots manage _all_ of the rest of it as
investments. And they're getting stupid about joining in on bitcoin.
[https://www.bloomberg.com/news/articles/2017-10-05/bitcoin-s...](https://www.bloomberg.com/news/articles/2017-10-05/bitcoin-
s-rise-happened-in-shadows-of-finance-now-banks-want-in)

[https://cointelegraph.com/tags/jamie-
dimon](https://cointelegraph.com/tags/jamie-dimon)

Consequently, those bankers are now the reason it "just goes up" this sharply.
When we run out of banker patsies to join in on the ostensible money-orgy,
look for it to drop. The best/luckiest run at the peak. And then it drops.
Panick ensues among the bankers... and the party turns to massacre.

Intentional or otherwise, this hype-train turns functionally into the classic
pump and dump scheme that youve see spammers do with penny stocks.

(Catch up: [https://youtu.be/ytDamqTjPwg](https://youtu.be/ytDamqTjPwg) Or
google 'spam pump and dump penny stocks' for some quick reads)

If it recovers through the "moral"/financial defeat of such a crash by
continue operating anyway, only after the rebound can we evaluate the value of
bitcoin.

In the meantime? Screw those bankers - sell them your bitcoin until we can
have our monetary platform back. Or we could try a different one. I hear
Etherium is nice, and has less brand recognition among bankers.

