The last week’s rally was simply awesome. Congrats to anyone who got a chance to ride the wave along with us. The price started to gain momentum from $320 days before the actual jump took place, but the signs of it happening were all over the place. In just a few days we went from $320 to almost $460 so a correction was bound to happen. In my previous Bitcoin price prediction article I estimated the price to linger in the $410 – $420 area for a few days and then proceed to gain strength once more. Everything was fine for a few days, but looking at the charts today I can say that the correction isn’t really a correction any more, it’s a bearish ride.
FBI – The real market mover
It’s not a coincidence that the price started to fall just when the feds announced that they will be auctioning 50,000 Bitcoins they took from Dread Pirate Roberts, the founder of the biggest black market in the internet history. When you look at the chart you will see that on Monday the market was unsure where to go. I am confident that if it the feds wouldn’t have announced the auction the price would have behaved exactly the way I predicted it previously.
When you look at the way MACD is crossing you’ll see that the previous cross took place at a much lower point. This gives us a little bit of hope that the overall Bitcoin price trend is still bullish. The $320 area is still our strongest support at this point because we have tested it two times already in the past.
Looking at the RSI it’s pretty clear we are going to go lower from here. Further price movement is now depending on two factors: 1) how many Bitcoins the feds are able to auction and 2) will we reach the oversold market condition before our $320 support or not.