In my last update i’ve talked about a mandatory condition to move above $500 soon but XBT/USD failed to do so and instead drifted further down towards the $455-$465 support area. At this point the odds are for a drop down to the $420-$430 price zone, below the recent bottom done at ~$440 because the averages i’m using on the 3 days chart and weekly chart are bearish and pushing down the price.

For the next few hours because of a low reading of the RSI there could be a rebounce to $480 where there is the fast VWAP (7 days), notice how the second negative deviation line provided temporary support to the price action at around $465.

In my previous update I hypothesized that the drop of last 31 August could have been a true breakout but at the same time i was leaning towards the shakeout theory, at this point considering what happened yesterday i have to remain moderately bullish for the upcoming days but there is a condition that must be met in order to move up to the first decent resistance, the VWAP at around $550.
This condition is to move above $500 soon, better this week, because with the weekend ahead i’m worried that there could be a new stall with a subsequent drop. Where will bitcoin found support in case of a furhter drop from here? Well the support for the second part of the month could be in the $420-$430 price zone, below the recent bottom done at ~$440; this possible scenario scary me a bit because moving below the previous bottom would have very bearish implications and i prefer to avoid complications.

I dunno why, but i’m not surprised to see an heavy selling activity on Sunday, probably too much bored traders at Bitstamp and/or Bitfinex; jokes apart i’m starting to be annoyed by the short term behaviour of this market, totally disconnected from the news with sudden heavy selling activities typical of an immature and unstable market and for unstable i mean the volatility level with its high variance or unpredictability as main characteristic.
Aniway $495 has been broken and now it will work as resistance in case of a rebounce, in the meantime the VWAP is quicly readjusting itself below the $500 mark. 
Support for next week should be in the $430-$440 price zone, resistance at around $495-$500.

The question now is whether this is a high volume breakout that portends much lower prices, or a high volume shakeout that will quickly be reversed by a strong reaction with good volumes and the price coming back above $500. Considering the low level nature of the investor community at the biggest bitcoin exchanges, personally I am leaning towards the shakeout theory rather than toward the breakout theory, it’ll be important to see how it’ll start the next week, the first 2-3 days.
 

Trading sideways is when a security doesn’t make higher highs or lower lows. It just stays within the same trading range over any period of time, it’s a lull in between a bull market, when a security trade higher, or a bear market, when they are on a downward trend. Again XBT/USD is entering a congestion because it’s not too far from a period of ten days inside a specific range, the price zone from 480 to 540 dollars. 
The short term VWAP is now perfectly in the middle of the trading range, at 510 dollars. The volatility of the last seven days dropped further more and so the range defined by the deviation lines, as i indicated in the chart the last tops has been made on the first and second deviation lines with the last $522 top done on a RSI divergence.
Now the rsi is forming a new divergence with an higher bottom and bitcoin price doing a lower low, it could be a buying opportunity if today or tomorrow XBT/USD drops down to $490-$495. If someone want to try to go long there because this is short term operativity the stop loss must be very tight 5 or 10 dollars at max with a target around $515-$520.

Here’s a 60 min chart of the last 7 days, after an initial breakout of the short term VWAP notice that it stopped and found perfect resistance at the first positive deviation line of the volume average. Now it is very important to stay above the first negative deviation line at $480; any weakness below this level is a good indication that the selling pressure is increasing with the possible outcome of a new bottom below the previous one did at $440.
For now, watch out the 480$ level.