Superforecasting cryptocurrencies: Week 4 Day 6: Explaining the dip
23 September 2017
MGIF! What happened?
My Gosh It's Friday again! The cryptocurrency market lost $10 billion on Friday, down to $122 billion (it's now back to $127 bn on 23 September).
Josiah Wilmoth of cryptocoinnews reported more than 90 of the top 100 cryptocurrencies recorded declines. BTC still accounts for 48.3% of cryptocurrencies.
USD tradiing outstripped Korean won trading yesterday, but the amounts were small compared to previous days (less than half).
In another day when developments do not appear to have changed the overall determinants of cryptos' value, it might be instructive to read the technical analyses (or not).
Ethereum Price Technical Analysis: Downturn Likely to Extend
This from altcointoday. Quoting bitcoin news service it says: "Ethereum price upside seems to be exhausted against the US Dollar and Bitcoin. ETH/USD broke $280 and now it can even test the $240 support in the near term."
It refers readers to its previous report: "Ethereum price is showing minor bearish signs against the US Dollar and Bitcoin."
However, nothng more than chart mapping interpretation is used to explain the movement (i.e. looking at past performance, drawing lines and using hypothetical math).
'No reason for bitcoin drop'
JP Buntinx on The Merkle writes: "Even though there is no real reason for the Bitcoin price to be going down right now, we are seeing a lot of sell pressure in the market." Exactly.
"It is certainly possible things will get even worse before they get better. [...] Dipping to US$3,500 or lower is certainly possible." A pretty safe prediction.
"If the previous 'dip and bearish' trends are an example, this situation may last anywhere from a few days to several months," he writes. "We can only hope it is not the latter, as that would have the potential to wipe out all of Bitcoin’s gains throughout 2017. Only time will tell what the future holds.
"Turning this ship around will be pretty challenging as well. There is little to no major news coming out in support of Bitcoin or other cryptocurrencies right now."
What use is Bitcoin Cash?
JP Buntinx again: "While some people may see the value in Bitcoin Cash, it doesn’t offer anything Bitcoin can’t, other than an 8MB block size. Ever since Segregated Witness fully activated on the Bitcoin network, there has seemingly been less interest in BCH other than for speculative purposes."
The coin was $700 in February, compared ot $418 on 13 September.
As I have also noted, most of the action has come from Bithumb in South Korea, accounting for nearly 47% of all trades. Buntinx, who is based in Belgium (rather than Korea), observes: "No one over at Bithumb is interested in pumping up the price right now, as it seems most people are simply selling BCH and reducing their losses as much as possible."
Ripple's XRP continues descending trend
Sam Quinn at Ethereum World News opines about the Swift-killer Ripple's XRP token: "For the near term – many more hurdles will be found to move upward aiming the $0.1900 level making recovery and price return very difficult. Hitting below $0.1700 could take place."
It's currently at $0.173848, having lost 7.75% over the past seven days and 34% over 30 days.
Conclusion
There you have it. The straightforward charting of results and carefully hedged predictioins make it hard for me to believe they have any major effect on the markets. That is, the technical trends seem not to reflect any particular knowledge except of trading that has already taken place. As the warning signs, and economists say: past performance may not have any effect on future results.
Excel version
Click here for an Excel 1997-2003 version of this table with records for every day until now, free for download. There's also an Excel version of the shorter summary screenshot used above.
Superforecasting
Indicators
I've listed my seven indicators and explanations of what I consider important here.