Bitcoin (BTC) has added to yesterday’s gains, chalking up another 5% today. It is now trading near $650 on BTC-e and is within striking distance of the peak of its previous rally.
Over the past two days, total gains are over 10%. The relatively sharp rise in so short a period has sent BTC back over its 200-day moving average. It had not accomplished this feat since the beginning of June. It then straddled the level for several days before quickly retreating. At the time, it was the first time BTC exceeded this threshold since late March. Today, however, BTC has padded its distance from its moving average, now at about $610. At today’s price, this represents a 6.5% premium.
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The $650-$670 plateau, however, represents a formidable resistance point. It has not been broken since immediately after the MtGox collapse.
It is believed that the jump has been triggered by the recent auction of Silk Road’s bitcoins by the US Marshals Service. It is argued that the auction has opened the eyes of potential investors, which may increase demand on markets outside of the auction. There has also been speculation on how much the bidders are willing to pay, which has spilled over into the liquid markets.
If the auction is indeed the sole cause for the price action, it is likely to wear off. Even if winning bids were to be revealed and happen to be higher than those in liquid markets, it is still unlikely that the latter will conform. CitiFX had actually assessed that the auction will have a negative impact on Bitcoin prices as excess quantities flood the market, though there’s room to argue otherwise.