Last week, Square SQ -1.6%, surprise declared that they’d put 1 percent of the company’s assets to bitcoin. Ever since that time, bitcoin is up ~8 percent, currently trading around $11,400.
The announcement, albeit backward-looking, attracted the approval of this market as a possible signal that more corporations will follow Square’s lead, as Square seemingly followed MicroStrategy’s MSTR -1.1percent.
Furthermore, it was recently revealed that Stone Ridge Asset Management, an investment manager with $10 billion in assets under management, has built a $115 million position in bitcoin.
Stories like Square and Stone Ridge are very commonplace in 2020, which explains why bitcoin’s fundamentals have continued to shine bullish. For example, a Glassnode, blockchain analytics company, the quantity of bitcoin held on exchanges has continued to plummet because March while the percent of overall distribution dormant for more than 1 year is at all-time highs, now 63%.
Additionally, bitcoin is still aided by holders seeking to take advantage of yield opportunities on the Ethereum network.
Per Rekt Capital, cryptocurrency analyst,” a week’s candle was a significant first technical measure that started bitcoin up to testing higher immunity levels.”
“Bitcoin has managed to stay within or over the $10.300 – $10.800 demand area for four consecutive months: a historical feat, further solidifying the psychological price level of ~$10.000.
Over the years, this same place (green box) had figured as a point of rejection, together with the only exception being the ninth rally of late 2017.
“Moving forward, bitcoin will attempt to breach a currently 3-month diagonal resistance (black line) as cost rises towards the greater $11,000s. Breaking this trend line would likely be a bullish price development”
With the November elections around the corner, market volatility is unlikely to disappear. But a growing number of big buyers such as Square, strong principles, and technical analysis charts continue to support a more bullish thesis.