Wish I could without a long weird list that would be incomplete.
My feeling/hope is more about XCH seller pressure relief and its relationship to total network size.
Hard for me to explain clearly but here I go.
Some big Chia farmers need to sell instead of HODLing for whatever reason. This causes price drop spikes as one large seller dumps their XCH.
As Chia dropped under $200 the total Chia network size started to stabilize at around 36000 PiB. Since then the network appears to be shrinking just a little for the first time.
I would posit that this stabilization is due to to the lack of many new corporate and/or large farmers. While many once hoped for a quick ROI most have now realized that this will not happen. Some large farmers that needed to cash in their earned XCH to survive have now decided to cut their losses and quit instead.
With less large farmers needing to sell their earned XCH the downward pressure spikes are less frequent and smaller.
As we dropped below $200 I watched the downward spikes lessening and the network space stabilizing.
My basic thinking is that we have reached a more realistic price level that does not suffer nearly as much from a large part of the selling pressure that has existed.
Thank you for sharing that. Makes sense. Two additional considerations I would ask your comments on:
You don’t think there is still a wave of Chinese whales who will bail as we approach year end? I am not arguing that there are, just repeating a theory. I would like your thoughts.
The scenario you describe mostly focuses on the actions of farmers as market participants (sellers or HODLers). But somebody must be buying from them – although so far evidently too few to cause an upwards price pressure. I have posited in here (to use your word) that among those buyers might be some institutions (i.e. non-farming Chia stakeholders) who have begun accumulating XCH. But of course I could be wrong. Any thoughts on who the XCH buyers are?
Not really. I think the Chinese, whales and minnows alike, were an early part of the selling pressure and many were already considering liquidation of their Chia Farms. The Chinese crypto ban came at exactly the right time to make the Chinese whale’s decision for them.
I am sure that a percentage of Chinese Chia farms still live, but feel most are already gone for good.
Now we are getting into trader thinking vs farmer thinking.
I think most of the traders (buyers in particular) are just that. Traders, not farmers. Some are farmers, of course, but I believe that most of XCH buying is trader activity while a significant percentage of XCH selling is farmer activity.
I do agree with you and believe that some of these buyers are institutions.
Thank you for your thoughts. Much appreciated. Sorry it took me a few hours to get back to this. Busy day, as you know, on many fronts.
I agree with your takes. Except I have a feeling that we never saw enough netspace reduction to account for the Chinese. Either they’re still farming or their capacity simply moved somewhere else. But that’s pure speculation on my part. I don’t really have any knowledge or information to back it up.
And yes, I would hope that traders and speculators will start taking an interest in Chia soon. Just not too soon and too fast. I prefer a gradual bull with some healthy pullbacks, not the crazy volatile mooning that many seem to desire.
Agreed. What we saw was the massive expansion slow to a crawl and maybe even reverse a little. After months of explosive growth I see the network size showing that most Chia farmers have at least stopped expanding.
I have no real evidence of how much more/less the Chinese crypto ban had on Chinese farmers, but considering the consequences of getting caught and the low profit margin on Chia presently, I’d bet that most Chinese have put there money elsewhere with a lot of Chia investment being converted to move the more steady and profitable asic operations out of country.
Bones reports there are still a lot of Chinese peers so who knows?
I concur with @Bones I also saw plenty of nodes from China in my Connection section. However, that section doesn’t say whether such node has just two plots or few hundred 18TB hard drives. I guess, it is easier and more efficient to check electricity usage, and visit only those homes with higher usage, to take those farms/mines down.
Although, as HD prices are going down close to the level before Chia started, that implies that demand from Chia is slowing down (IMO).
It means I “purchase” Chia every day with my hardware (farming), in the same way I would buy the same quantity of Chia every day (from an exchange), in order to average the cost of the transaction (xch/usd) over time. It’s an investment technique called “dollar cost averaging”.
We are in trader world now where everything is based on belief.
Although I almost lost hope as XCH approached $100 I never expected it to to do. I am very happy my belief was well placed.
I believe that Chia has now become more mature and can be expected to trade relatively more like other crypto currencies in the future.
The second Chia hit $200 sell orders kicked in. I think we will kick around $200 for the next bit. XCH jumps to $210 as I was writing, lolz!
I have said before that I felt $150 was a good base for Chia (for reasons that are not exactly market based) and that if I were a trader I would buy at and above $150.
I think we are in a more normal XCH market now, subject to mostly the same effects as other crypto while less affected by uncertainty (due to the early crash and other factors) and insane Chia network growth.
I hope to see all crypto climb with Chia in the lead, but we’re not there yet. Cheers to POS!!!
If and when XCH rises above $200 and climbs Chia farming will become more profitable. At some point this will lead to the Chia network growing more quickly again. This is when I will start adding more storage and plots to stay ahead of the game.
More significant than the size of today’s pop was how it took out two significant distribution ranges which contained pockets of sell orders. The 156-161 range I mentioned earlier worked great for a short trade, until today.
AND of significance there are now multiple accumulation ranges formed below. The last one with a high at the 166 breakout level. 146 and 138 look particularly enticing, with a stop below 130.
The rally today can easily be retraced, such is the nature of fast moves. Contrary to what many believe, strong moves don’t have the most strength. But those ranges below should form good support.
To the upside, 251-264 is now the distribution range that needs to be broken, and hold. We can expect some selling there. But if indeed we now have institutions onboard who accumulated lower (as I have posited) they will defend against price drops.
If we get heavy selling in the 251-264 range and price unable to break through, that would indicate it was merely big traders, not long term institutional investors, who caused the moves in recent weeks/months. Technically they buy and sell the same way (and leave the same patterns) but they have different time horizons.
Personally I wouldn’t have minded for XCH to stay low (or even lower) for longer. I think we can now expect an explosion in netspace as everybody thinks the dangers are over and it’s all mooning from here. But that’s just me
Geez had to scroll past the second half, too long. Anyway a question for everyone:
When we talk about crypto vs fiat efficiency, why are we talking about this with profit as context? Isn’t the important efficiency how many transactions we can do? Crypto isn’t actually designed to be a speculative investment, it’s just what the early adopters realise they might get. In that sense chia’s downward price could actually be a good thing - the sellers help to stabilise the price. To me crypto is about bringing down barriers, borders and creating international currency. El Salvador being a recent example of interest.
There seems to be so many considerations to the which is greener argument not being included. For example the price of server grade hardware and associated cooling in data centres vs consumer grade hardware at home. How the banks aren’t actually connected together well and the extreme inefficiency of humans in that process. The power source, i.e solar, water wind of the country or even in some countries like Australia that have a lot of solar. Even my country has had a good portion of green power basically my whole life. Chia can run on low power arm cpu, or even a Mac has very low power consumption - especially the new M1’s. I’m glad someone above noted the improvements of hardware and drive efficiency over time (more plots on less space). This could be applied to GPU to some extent except that GPU mining is in a race upward in terms of compute required whereas HDD is not. What happens when solid state matches magnetic HDD for price / parity? How much does that decrease the power? And which manufacturing process is more green? Vs GPU?
There’s so much more to think about that the price of your favourite coin when it comes down to saying which tech is greener.
If more people were thinking like you, Earth would be a better place. I mean that from the bottom of my heart.
But the truth is 99% of crypto is almost entirely used as a speculative investment. Most altcoins were designed entirely for that purpose, with no interest in putting in the hard work required to build longterm use cases. As long as it moons! That’s why I call them hypecoins, since that is all they’re about.
Many Chia farmers are ones who missed out on the crypto craze and got in for FOMO, hoping to finally get some action. And paradoxically, tragically even, they got into the one coin that WASN’T designed just for hype, which HAS a solid foundation and WANTS to do something longterm. Arguably, these farmers would have been better off just buying some SHIB, make some fast money and experience the rush.
So what you say is all true.
I will say, though, that the price of XCH matters a great deal, particularly to those who made big investments in their farms. My farm is small enough that I can afford not to worry much about XCH price and look at it from a detached viewpoint. But that’s a lot harder to do if you have thousands or tens of thousands of dollars invested.
For my part, being a trader and market technician in other markets, analyzing and predicting price behavior of XCH is just something I cannot help doing
Crypto tends to attract people interested in quick gains, who do not understand the scale and returns of the basic asset classes let alone financial products. Anyone building a chia farm and who is looking for a quick buck (watching the price of the asset daily as if their livelihood depended on it) clearly hasn’t made the math on how much hardware investment is needed to make a living farming chia. Consider MTBF of HDDs and the 4-year halving cycle of Chia, and you know you’re going to make a killing long term.
Crypto is growing massively right now. People want quick gains because they are possible but won’t be much longer. I don’t see what is wrong with those wanting to maximize on their investment.
I understand what you want to say… let’s wait a few years to see what happens but we can already see what is happening… this project that was initially all about openness (open source) and transparency is no longer like that.
They are looking at patenting their development, they hold everything in anonymity, there is not enough being done to engage with the community in my humble opinion and there is so much more wrong here.
Personally, the only reason why I’m still here is because I’ve invested a lot of time and effort into building my small farm by setting up the equipment, plotting (such a useless thing to be honest) and dealing with other issues.
Like a lot of people, I committed myself fully to this project and I don’t like where it’s heading, mostly because I feel like we’re being used (currently by Chia Network and soon by the World Bank) instead of being part of it. That’s how I feel, simple as that.
(rimshot)