In last month's post,
Bitcoin in the News : 2019-11 Price,
I observed,
The November chart was the fourth out of five in the second half of the year to show a falling trend.
The December chart shows neither a rising nor a falling trend. It was basically flat with some bumps along the way.
Bitcoin (BTC) Price Index
As for spikes in volume, three were more significant than the others, where the last two were part of a cluster:-
2019-12-05 1200 (Spike in price)
2019-12-16 1600 (Drop)
2019-12-18 1200 (Jump)
As usual, Cointelegraph's
Analysis
category had nothing to say about those high-volume periods. For the first time, the service's
Price Analysis
tag also had nothing to say beyond the analysis of technical patterns.
I'll come back to the subject when I look at other news sources in next week's '2019-12 More++' post.
***
Later:
Re 'I'll come back to the subject', I found a number of stories in Forbes. The date on the first story ('spike in price') doesn't quite match what I calculated, but that just underscores how unsophisticated my tools are.
-
2019-12-04:
Bitcoin Crashes After Sudden Leap Higher
(forbes.com)
•
'Bitcoin and other major cryptocurrencies, including ethereum, Ripple's XRP, litecoin, and bitcoin cash, have suddenly leaped, with bitcoin rising almost $1,000 in just minutes. [Update:] After suddenly surging, the bitcoin price has given up almost all of its gains, dropping to around $7,200 per bitcoin.'
-
2019-12-04:
Bitcoin’s Surge This Morning Shows Market's Vulnerability
(ditto)
•
'"As I write this morning, today's price spike does seem a bit suspicious," said Mati Greenspan, founder of the newsletter Quantum Economics. He pointed to "the sudden movement on an otherwise uneventful day, the low volumes across exchanges, the quick retracement after the move. It all points to the assumption that this was the outcome of a single player with a large buy order. Or in other words... a large whale stacking sats."
Tim Enneking, managing director of Digital Capital Management, offered a similar perspective. "With this unusually low volume crypto markets have experienced, any single, large transaction has an [outsize] impact," he stated. "This is true both because the transaction itself will affect markets and because, in the absence of other signals, market watchers overreact to such a transaction and exaggerate the move, regardless of direction," said Enneking.'
A 'large whale stacking sats' makes sense if you know that 'sats' is short for 'satoshis', i.e. the smallest unit of bitcoin. The spike shows how easily the price of bitcoin can be manipulated. Introduce a large transaction into a calm market and watch as other traders react, like dropping a stone into a calm pond and watching the ripples. The next set of stories is from later in the month.
-
2019-12-16:
Bitcoin Moves Sharply Lower Again As Other Major Cryptocurrencies Go Into Free Fall
(forbes.com)
•
'Bitcoin, which yesterday dropped by 3.5%, has moved lower again, dropping over 5% since this time yesterday
[...]
The cause of the sudden sell-off was not immediately clear, however, analysts have noted a drop in crypto market trading volume recently.
[...]
In periods of low trading volume, crypto prices are more vulnerable to so-called whales moving the market by placing massive buy or sell orders at a little above or below current market rates. These can trigger trading algorithms that then send prices sharply higher or lower and can be a sign of market manipulation.'
-
2019-12-18:
Bitcoin Recovers After Falling To Lowest Since May
(ditto)
•
'Bitcoin prices bounced back today, rising more than 10% in a matter of hours after declining to their lowest in more than seven months.
[...]
Some analysts described today’s rally as being purely technical in nature.'
-
2019-12-19:
Is This Why Bitcoin Suddenly Rebounded Yesterday?
(ditto)
•
'Bitcoin and cryptocurrency markets suddenly rebounded yesterday, with the bitcoin price climbing back above the psychological $7,000 per bitcoin mark after a sell-off earlier in the week.
[...]
A report out earlier this month found the cost of creating new bitcoin, a process known as mining, now averages around $6,300 per bitcoin -- something that could mean bitcoin is perhaps unlikely, but not guaranteed, to fall below this level.'
The phrase 'purely technical in nature' is not an explanation. It's an admission of ignorance. On top of that, the last explanation makes no sense to me. Does the price of gold depend on the cost of mining it?
If the price drops too low, miners go out of business, thereby reducing new supply. If the supply drops, the prise will rise -- assuming demand remains steady. Then new miners will start operation. This is necessarily a medium term phenomenon, not something that happens in a few days. Or am I missing something? (It wouldn't be the first time.)
