The price of Bitcoin almost passed US$11,000 after Square announced the purchase of US$50 million in BTC.
The number of institutional investors betting on Bitcoin continues to rise and this seems to be inspiring new confidence in the price of Bitcoin. Just today Square announced that it has purchased 4,709 Bitcoin (BTC) for US$50 million.
Square is not the only big company to do this. Recently, MicroStrategy made headlines for also announcing a massive purchase of Bitcoin.
This news may be a signal to investors that a new cycle is beginning and that larger parts are showing significant interest in Bitcoin. However, this will also affect the short term, as Bitcoin is still hovering below the crucial $11,000 resistance?
Volatility is at its lowest point since halving
The volatility of Bitcoin is showing signs of stability, with the metric back to the levels seen in July. This was the period after halving, which brought much lateral movement in the price of Bitcoin System for weeks.
However, as the bullish news enters the markets, some short-term hype may occur in the price of the Bitcoin. An escape from the current triangle would be optimistic for Bitcoin, but investors should be cautious.
The crucial breakthrough is the $11,000 resistance
As the trend line is holding for Bitcoin, an upward break has occurred. This has caused the price of Bitcoin to exceed the crucial triangle; however, this is not the most important pivot to watch.
Investors should be watching to see if the previous support area between US$11,100-11,300 can break. If that area breaks and turns to support, one shot is certain.
Such a break would also show strength in the altcoins, as they were hammered hard in the previous weeks. The best climate for altcoins is a Bitcoin of upward movement, as this gives investors a calm market environment to trade altcoins.
An important indicator for altcoins is the Ethereum (ETH), which is currently at a significant support level.
The Ether chart shows signs of potential background construction, but the crucial green area has to hold out for more momentum.
If the $290-320 area is broken for support, a further drop is likely to go to the moving average of 200 weeks, which currently stands at close to $220.
However, if Ether’s price supports support around the $290-320 area, a limited zone between $300 and $450 can be established.
This is a sign of a rise, as the price of Ether would consolidate at a higher level than in the previous two years.
Potential scenario for Bitcoin
The graph may make it seem simple to define whether „the price will go up or down“, but it is still surrounded by some critical levels to be observed.
Essentially, if the price of Bitcoin exceeds the $11,100-11,300 resistance zone, the higher can be expected to be $12,000. This makes the US$ 11,100 to US$ 11,300 area a critical zone for the high sequence.
If this level cannot be broken and the trend line is lost, a likely new $10,000 test is on the cards again.
Until then, a short term spike high is all that market players can expect.