Bitcoin price has rallied +2.19% over the last 24 hours, fueled by developments around Square announcing the deployment of $50 million into Bitcoin. Based on the current technicals, is this a scenario that should propel Bitcoin price higher, or are traders getting ready to “sell the news?”
During the last 24 hours, Bitcoin price has jumped +2.19%. At the time of this reporting, BTC is currently trading at $10,895, which is about +$356 dollars higher than this morning. The uptrend has fueled altcoins, with many of the top altcoins rallying harder than Bitcoin. Here is how Bitcoin stacks up against altcoins over the last 24 hours:
- Bitcoin +2.19%
- Ethereum: +3.13%
- XRP: +1.30%
- Chainlink: +7.15%
- Bitcoin Cash: +4.74%
- Polkadot: +8.11%
Square Purchases Bitcoin
Payments company Square ignited bullish momentum this morning when the company announced that they were buying $50 million into Bitcoin with corporate cash. An investment of this magnitude means that Square is putting about 1% of their total assets into Bitcoin. Jack Dorsey, the CEO of both Twitter and Square has been a longtime digital asset advocate. Regarding the move, Square stated in a release that:
“Square believes that cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with the company’s purpose.”
With Square soaking up 4,709 Bitcoins from the market, many believe other companies could follow suit. Despite this being bullish news for Bitcoin in the long-term, what do short-term technicals tell us right now?
Bitcoin Technical Analysis
In recent Bitcoin analysis, it was explained that $10,600 has been an important level for a while now. Bitcoin price has essentially been in consolidation mode since the 25th of September.
The announcement by Square this morning had Bitcoin price rallying above the strong $10,600 resistance. This could very well be the push that Bitcoin needed to power its way to $12,500 resistance.
It is important to play this cautiously though. The $10,600 level will be important to watch. If Bitcoins price falls back below this level, there could be strong selling. This would be a scenario where traders/investors digest the Square developments and “sell the news.” For people familiar with Bitcoin, this would not be the first time such thing has happened.
Traders will be managing risk and making sure Bitcoin price does not reject $10,600. As stated above, as long as this happens, Bitcoin could build some strong upward momentum in the short term. The rally today has BTC flirting with the 50 day moving average. It is extremely close to inching above the 50 day MA, which powered the previous 2 rallies ( outlined on the 1 year chart above ).
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