Can the US Marshals’ Silk Road Bitcoin Auctions Affect Bitcoin Price?

Just a couple of days back, the United Stated Marshals Service (USMS) announced selling away another large stash of Ross Ulbricht’s Bitcoins (50,000 BTC). The statement came amid a 4% value surge on Coin Market Cap, subjecting Bitcoin once again to traders’ guesstimates, so can this auction affect bitcoin price?
An auction might be the most fundamentally accurate event for Bitcoin trading market – especially in the ways it drives the value. As we see the last two auctions held by USMS, you will notice similar price movements that took place before and after the events. For instance, let’s look at this chart below. [Credits: Trading View] We have created two rectangular blocks, each representing the period of auction hypes. Despite their varying lengths, you can notice a pattern here. There are always speculative buyings before or around the auction (the large green candles), followed by an almost corresponding sell-off (the near-term bearish flags). There is indeed a conflict between demand before, and after the auction.

This post was published at NewsBTC on February 20, 2015.