Bitcoin Price Breaks Higher as Square Invests $50 Million

Summary:

Bitcoin price breaks higher as Square invests millions. However, it still remains between support and resistance areas difficult to break yet.

Bitcoin price got an unexpected boost yesterday. Square, another company where Jack Dorsey, Twitter’s CEO and founder has a stake, just announced an investment of $50 million into Bitcoin.

Jack is a long-term fan of Bitcoin. After all, his Twitter description states only one word: Bitcoin.

Therefore, the more comes as no real surprise, but the dimensions of it matter. Here is how.

Square Invests 1% of Total Assets in Bitcoin

By investing $50 million in Bitcoin, Square says that the project aligns with the company’s long-term mission of empowerment. Effectively, Square dedicated 1% of its total assets to the move and bought 4,709 Bitcoin recently.

Today, @Square announced that it has purchased $50M in bitcoin. Square believes cryptocurrency is an instrument of economic empowerment and provides a way to participate in a global monetary system, which aligns with the company’s purpose. For more, visit https://t.co/HPhSMfVgac.
— Square IR (@SquareIR) October 8, 2020

The move spurred a lot of frenzy in the market, otherwise a lull one recently. Bitcoin supporters from all over the world celebrated the move. As one put it, what is the next public company that puts 1% of its total assets in Bitcoin?

Another thing that stimulated the imagination of Bitcoin hodlers is that the Square decision came after MicroStrategy invested $450 million only recently. What if this is the start of a true Bitcoin adoption among public companies?

Therefore, Bitcoin price caught a bid on the news. People that do not want to be left outside when the train leaves the station, hurried and bought some coins.

But one can also argue the opposite. If MicroStrategy and Square bought $500 million worth of Bitcoin in the last months – who was selling?

Bitcoin Price Support and Resistance Areas

The recent breakout shows the Bitcoin price breaking out of triangular pattern. However, it still finds itself between support and resistance, and this is nothing but a move inside of a range.

In other words, bulls may truly consider a breakout only on a move above $12,000. Also, bears should consider more downside only a move below $9,200. Until then, Bitcoin will likely consolidate and follow the lead of risk-on/risk-off markets.