Post Gox dust settles

Heres a Bitstamp chart showing last few months of bitcoins with daily candles.

Similar to other views I’ve been looking at recently I’ve kept the fib retracement overlay on top also I’ve added MACD indicator.

Theres a noticable down trend and a spike down to nearly $400. This obviously co-incides with an awful run of blows to bitcoin which I’ve mentioned in previous posts and culminating in the demise of MtGox. My opinion is that this is likely the final washout marking point where bear trend reverses. Of course I could be wrong but I’ll be surprised to see the downtrend continuing. MACD looks like its about to cross upwards.

Many MtGox traders will be licking their wounds and chastising themselves for trusting the exchanges. I’ve often mentioned how the same happened to me when I left bitcoins in Bitcoinica. The lesson is very simple and goes like this ..

‘if you don’t hold it you don’t own it’

Meaning trust your own wallet not a website run by people on the other side of the world.

My reaction to losing bitcoins on Bitcoinica was to try and buy them back knowing I was paying a lot more for them now. If many MtGox users come to similar conclusion then a rally could ensue.

Will leave with this link speculating if the US government could be in control of MtGox’s cold wallet .

12 thoughts on “Post Gox dust settles

  1. Where do you store your bitcoins? I usually get my coins through coinbase. Should I transfer them to my localbitcoins wallet?

  2. I tried to buildup a cold storage wallet with a tiny eee PC and Ubuntu OS. Unfortunatly, I didn’t get throught (with armory and electrum)… MtGox could hired me.

    Finally I did a pseudo-offline wallet with multibit. Multibit doesn’t need to download the entire blockchain. This software works fine with small configuration and “receiving coins” is very fast. Then I set up procedures for :
    – how to connect my computer in the most secure way when needed
    – how to recover rapidly my wallet in case of crash, theft or fire…
    – how my family can take my coins if I die or loose my mind (without short-cutting me if i’m still OK)…

    Electrum provides a very nice solution to backup your wallet. I tested it. I erased my wallet and recovered it easily with a passphrase that I printed before.

    Another tip that might be very useful :
    If you have bitcoin-qt with encryption and then you backup your wallet.dat, you backup won’t work!!!
    Copy wallet.dat BEFORE. Store your copy in a secure place (and encrypt it eventually). Then encrypt your wallet located on your computer.

  3. I think I need to do some testing of that Artiti, latest QT client allows you to encrypt your wallet and backup your wallet. I’m presuming if you backup through the client it will decrypt the backup .. but its a good point i should check that. I think you want to backup regularly in case new keys (bitcoin addresses) have been added? Not much point having backups if you can’t restore them!

  4. Heres an updated version of the chart I posted.

    Not that much to talk about really, we seem to be consolidating just above $520 ish which looks like a fib retracement level. MACD still looks like its beginning to cross up, not sure we’ll see a rally or just hang around this level for a while but I don’t think we’ll be going much further down unless some powers that be can rustle up some more bad news

    1. As I mentioned in my post I think that (spike down to $400 was the final washout. Volume only supports that idea. Thinking the tension in Ukraine has helped fuel yesterday’s large move up. Gold also up, more than 2% which is unusual in gold.

  5. I had a dollar-denominated account at Mtgox, since that was where I got into bitcoins. Sent a money order to that bank in Tokyo in early ’13. After trying to trade the $/BTC pair for a while (successful only because of that bull run last year), I moved them off to BTC-e (server is in Bulgaria) … I don’t have any dollars in BTC-e, only BTC / LTC.

    Anywho, late last year I worried about the dollar price crashing and moved most of my BTC back to Mtgox and traded them for dollars for a brief interval. When the panic passed, I entered an order to transfer them back to BTC-e. I think Mtgox was already in trouble at that time, because it took more than a day, as I recall, for the coins to show up at BTC-e. The transfer should have taken minutes.

    My instinct was to stay away from Gox after that. I tried to cancel/delete my account, but they wouldn’t let me because it still had something like $0.0002 in it. I couldn’t trade for BTC or do anything because it wasn’t enough to trade, but they wouldn’t close the account. Bah.

    Now thinking about the security of BTC-e… could be geopolitical risk, even though the exchange seems to run like a Swiss watch.

    1. Hey Urban, Good to see you still stop by my little ol blog. You did well to trust your instincts getting out of Gox in time. I’ve sometimes considered using btc-e or bitstamp for some small day trading, i created an account on bitstamp but never got around to verifying it. I still think buying on localbitcoins and holding in your own wallet is the safest strategy. Works for me at least.

      1. Never got verified — yeah, that was why I moved them back to Gox. I was verified there and could trade for $$. I didn’t verify at BTC-e on purpose. I don’t intend to ever hold any fiat there. Not Rubles, not Euros, nothing. Just online currencies. If I want to piddle with FX, I’ll use one of the regular old FX trading houses.

        I have decided by now to never sell the BTC for fiat. Not to an online exchange, anyway. I’m trading the BTC/LTC pair on BTC-e but will only ever take profits in BTC or LTC. If the developers screw up and blow up the algorithms and BTC goes away, well, so be it. But I think they’ll be careful now that it’s gotten popular.

        It’s good to be as diversified as possible right now IMNSHO. Au, Ag, Pt, BTC, land, some fiat, tools, and so on. Maybe a royalty trust or two..

  6. Don’t think I’ll ever verify on Bitstamp either, was wanting to use bitstamp to swap some ripples i have for bitcoins but instinctively don’t like giving all my details to some entity I know little about.

    I’ve never yet bought litecoins but if btc/ltc ratio falls low enough i’ll be looking to get some. Peercoins are another that sound interesting. I not sure I understand enough about their scarcity to go in in a big way though.

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