Bitcoin logged a $400 price rally shortly after Jack Dorsey’s Square announced its investment in the cryptocurrency.
The multinational payments company said in a press release that it has purchased $50 million worth of BTC. Excerpt from their announcement:
“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. The investment represents approximately one percent of Square’s total assets as of the end of the second quarter of 2020.”
That Ideal Bitcoin Buy Range
The BTC/USD exchange rate ascended to $10,940, its best level in almost two weeks. Traders showed little interest in profit-taking from the surprise price jump that allowed the pair to hold $10,900 as its interim support. It now has a likelihood of testing $10,950 for a breakout move towards $11,000.
“It is a major development that a global corporation is now putting BTC onto its balance sheet,” said veteran trader Peter Brandt. “The weekly and daily charts a poised to flash a big buy signal.”
It is a major development that a global corporation is now putting $BTC onto its balance sheet. The weekly and daily charts a poised to flash a big buy signal. https://t.co/p6652SfqVc pic.twitter.com/rCoKZCY5LB
— Peter Brandt (@PeterLBrandt) October 8, 2020
Market commentator Luke Martin also showed his bullish bias for Bitcoin after Square’s investment. He noted that like MicroStrategy – a public-traded firm that invested around $425 million in Bitcoin – Square also purchased the cryptocurrency when it was trading in the $10,000-11,000 range.
“They aren’t worried about timing the bottom, they’re worried about not being long,” the analyst added.
Skepticism
IncomeSharks, a Twitter-based crypto analysis page, meanwhile warned about potential setbacks.
The profile highlighted the possibility that Square was holding $50 million worth of Bitcoin already since it is the owner of CashApp, a crypto marketplace. It further stated that bulls should wait for companies with no prior ties to crypto as their cue to go long on Bitcoin.
“There always seems to be bullish news released for BTC right at resistance when it needs a breakout,” the IncomeSharks operator wrote. “If you remember the Paypal rumors it happened right at the breakout and crashed after. I’m still bullish midterm but not short term (until we see an actual bullish close).”
Bitcoin is waiting to close above $12,500 to eye a bull run towards its 2019 high near $14,000. Many analysts predict that the cryptocurrency would touch $20,000 by the end of this year. It is especially because of the ongoing dovish policies by global central banks that reduce the appeal of fiat money.