windjc
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April 15, 2014, 10:11:18 AM

This is a rally completely fueled by margin. Bitfinex has added 3 million in margin in the last few hours. A few more shorts have squeezed. I am acquiring bitcoin for a .005% rate as I plan to short with basically free money in the next few hours/days.

I missed this rally because I couldn't trust it. Still don't trust it.

But the point is, this rally will DIE without fresh fiat. Once everyone has bought back, margined themselves, etc. etc. - where does the price go then?  Is everyone just going to stare at each other? Meanwhile new coins will continue to arrive. Will the fresh investors?

So what do you think will happen??

I know you went bear on the bottom so I probably shouldn't trust it but i'm just asking for perspective

Well, I think there isn't enough money to keep the bitcoin prices at their current level. So unless a lot of new money comes in, we can't get but so far. Meanwhile, what do you think is more likely - good news from China or bad news from China? The clamp down there is going to be an on-going process.

Everyone is excited right now, just like they were at 710 with that huge snapback. Just like they were at 990, with that huge 2nd push rise. Now people have convinced themselves that a downtrend that broke through major support at $380 and came back up with low volume is a permanent reversal.

Sorry, I don't buy it. I short it. Pun intended.

I think we will retest 340 eventually. And then we will either hold and recover or we will see lower.