Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Bitcoin Price Still Holding Above $250

Currencies / Bitcoin Mar 10, 2015 - 05:49 PM GMT

By: Mike_McAra


In short: no speculative positions.

Luqin Wang and Yong Liu, researchers at the NYU Polytechnic School of Engineering, have come up with a paper on the evolution of Bitcoin mining. Their work tackles various aspects of how Bitcoin miners have changed over the life of the network. In a subsection on solo miners, we can read:

We now examine how fast miners transfer out mined Bitcoins. We measure the time lag between a miner claimed a block and her next transaction. If a miner has no subsequent transaction in our trace, we tag the minor as frozen. For active miners, we calculate the average and distribution of their transfer lags. (...) a large fraction of early miners were frozen and never touched their mined Bitcoins, even after the Bitcoin price surge in 2013. Our conjecture is that those early miners were casual early adopters of Bitcoin as a fun technology, and they were not motivated by the potential financial value of Bitcoin. When Bitcoin became valuable, they might have, unfortunately, lost their account IDs, so that couldn't cash out. This suggests that lots of Bitcoins mined in the first two years might have been lost permanently! Things changed completely in 2011, not surprisingly, this is in sync with the value increase of Bitcoin. Not only almost all miners are active, the lag for transfer gets shorter and shorter. The slight increase in frozen ratio from 2012 to 2013 is due to the artifact that our trace ends in March 2014. (...) [The transfer lag distribution] further illustrates the decrease trend of transfer lags as time evolves. This suggests that later miners were explicitly driven by profits and diligently transferred out mined Bitcoins.

It turns out that in 2013 (most recent year for which the above analysis was conducted), only about 0.96% of miners were actually "frozen." In keeping with this result, the period between mining and cashing out of Bitcoin fell from around 138 days in 2009 to around 1.5 days in 2013. This would mean that the speed at which miners are getting rid of their bitcoins is increasingly high. This doesn't mention the transfer lag for 2014 which might actually be even shorter than the mentioned 1.5 days.

These findings seem to confirm one of the major characteristics of the current state of the Bitcoin network, namely that Bitcoin miners don't hold their rewards but rather seek to convert them to other currencies as soon as possible. The implication here might be that this exerts downward pressure on the price of Bitcoin as there is always a significant pool of miners willing to sell bitcoins at any price at which they are still operating. It would be very interesting to see other studies on how strong this downward pressure might actually be.

For now, we focus on the charts.

Bitcoin Chart 1

Yesterday, Bitcoin ended the day roughly where it had started it on BitStamp. The volume was not weak but not far lower than we used to see during major swings or reversals. We saw some action intraday, and the developments yesterday are somewhat indicative of more action to come based on the fact that Bitcoin went up and down without any decisive move at the end of the day.

Today (this is written around 10:00 a.m. ET) we've seen less action in terms of price and Bitcoin has stayed at the level of yesterday's close, slightly above $270, visibly above $250 (solid green line). The move now might look like a consolidation above $250 but the main consideration here is whether Bitcoin actually remains above $250. The next day of a more significant price change might just as well set the tone for the coming weeks.

Bitcoin Chart 2

On the long-term BTC-e chart, we still see Bitcoin above $250 and possibly reverting to $250 (green line). Yesterday, we wrote:

We have seen some potential confirmation today but the move to the downside has not been strong enough to be suggestive of a significant slump. Particularly, the volume hasn't really been strong. In such an environment, our best bet is still a pause or a decline. If we see a move below $250 (green line in the chart), this could be an indication of more depreciation to follow.

Bitcoin has held up above $250 for some time now. The main consideration here remains the next stronger move. If we see a move up, this might mean that further action to the upside would follow. On the contrary, Bitcoin is still overbought and we think that the current environment is tilted in favor of a bearish short-term outlook, but not enough to open hypothetical short positions just now.

Summing up, we don't support any speculative positions just now.

Trading position (short-term, our opinion): no positions.


Mike McAra
Bitcoin Trading Strategist
Bitcoin Trading Alerts at


All essays, research and information found above represent analyses and opinions of Mike McAra and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mike McAra and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. McAra is not a Registered Securities Advisor. By reading Mike McAra’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Mike McAra, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Mike McAra Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules