Following the announcement of the acquisition of Square, the price of Bitcoin rose to almost USD 11,000, and investors expect a further upward movement.
The number of institutional investors joining Bitcoin continues to rise, and this appears to be inspiring new confidence in Bitcoin’s price. Just today, Square announced the purchase of 4,709 Bitcoin (BTC) for a total of $50 million.
Square is not the only major company to have taken this action. Recently, MicroStrategy also announced a significant purchase of Bitcoin.
These events could be a signal to investors that a new cycle is beginning and the larger parties are showing significant interest in Bitcoin. However, will this also affect the short term, as Bitcoin still remains below the crucial $11,000 resistance?
Volatility is at its lowest point since halving
Bitcoin volatility is showing signs of boredom, as the index returned to the levels seen in July. That was the aftermath of the halving, which caused a lot of sideways stock movement in the Bitcoin price for weeks.
However, as bullish news enters the markets, some short-term expectation can be established in the Bitcoin price share. A break in 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 for Bitcoin holds, an upward break occurred. This caused the price of Bitcoin to break the crucial triangle; however, that’s not the most crucial pivot to consider.
Traders should be watching to see if the previous support area between $11,100- $11,300 can be broken. If that area breaks and turns for support, then further upward momentum is warranted.
Such a break would cause the altcoins to also show strength as they have fallen sharply in recent weeks. The best climate for altcoins is a Bitcoin Revival that moves upwards, as this gives investors a calm market environment to trade altcoins.
A significant indicator for altcoins is Ethereum (ETH), which is currently at a significant support level.
Ether’s chart shows signs of possible support construction, but the crucial green area must be maintained for further momentum.
If the $290-$320 area breaks for support, it is likely that a further downward fall will reach the 200 week moving average, which is currently close to $220.
However if Ether’s price maintains support around the $290-$320 area, a potential range building could be established between $300-$450.
This is a bullish signal as Ether’s price would consolidate at a higher level than the previous two years.
A potential scenario for Bitcoin
The chart may seem like a potential case of ‚price will go up or down‘, but it is surrounded by some critical levels to be aware of.
Essentially, if the Bitcoin price crosses the $11,100- $11,300 resistance zone, more optimism can be expected towards $12,000. This makes the $11,100- $11,300 area a critical zone for continuation.
If this level cannot be broken and the trend line is lost, a further test of $10,000 is likely.
Until then, a hint of short term optimism is all market participants can expect.