Bitcoin is currently caught within another bout of sideways trading as its price hovers within the upper-$11,000 region.
This trend comes close on the heels of the strong multi-week upswing that allowed it to climb from lows of $9,000 to highs of $12,100 that were set yesterday evening.
The lower-$12,000 region has been established as a strong resistance zone for the benchmark digital asset.
Last Saturday, BTC faced a harsh rejection at this level that led it to lows of $11,000. Yesterday, it faced yet another rejection at this level, although its price only dipped as low as $11,700.
One occurrence within the options market shows that the cryptocurrency’s mid-term outlook remains incredibly bright despite its inability to break $12,000.
If Bitcoin can push higher and eventually surmount $14,000, it’s open skies until it reaches its all-time highs of $20,000.
Options market places an 11% chance on Bitcoin reaching $20k by December of 2020
Bitcoin has been climbing higher ever since its price bottomed out at $3,800 in mid-March.
After rallying as high as $10,500 in May, it entered into a multi-month consolidation phase that would ultimately result in a breakout rally that led it up to its recent highs of $12,100 that were set yesterday evening.
Despite not being able to break above $12,000, the strength of Bitcoin’s multi-month uptrend doesn’t appear to be faltering.
The options market, however, still thinks the benchmark cryptocurrency will end the year below its all-time highs of $20,000.
According to data from analytics platform Skew, the current probability of BTC trading at, or above, $20,000 by the end of December is 11%.
While looking towards March of 2021, this probability jumps to nearly 15% but remains rather low.
Here’s the key level BTC needs to break to push significantly higher
While looking towards Bitcoin’s options market’s open interest by strike price, there is a significant gap between $14,000 and $20,000.
This suggests that the crypto may not face too much resistance within this price region, making a clean break above $14,000 vital for BTC to have a chance at setting fresh all-time highs in the coming few months.
Kyle Davies – co-founder of Three Arrows Capital – spoke about this in a recent tweet, saying:
“BTC air above $14k up to $20k.”
Watching Bitcoin’s reaction to $12,000 should provide some significant insights into the cryptocurrency’s macro trend.
Bitcoin, currently ranked #1 by market cap, is down 1.66% over the past 24 hours. BTC has a market cap of $217.59B with a 24 hour volume of $23.91B.
Bitcoin Price Chart
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Venture capital helps ‘buy now, pay later’ fintech business Affirm to $500m investment round
Affirm, a buy-now-pay-later tech startup, has closed its Series G round on $500m.
The investment was led by GIC and Dura
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Here’s how Nasdaq-listed MicroStrategy went about buying $175m in Bitcoin
MicroStrategy has become the poster child of mainstream Bitcoin adoption amongst corporations. It is the only publicly listed company to turn towards BTC as a reserve asset to store their capital in.
Their announcement last month regarding their decision to ditch the US Dollar in favor of BTC to store their capital was a big one, because it showed that the benchmark digital asset is gaining utility as a store of value.
For a company with hundreds of millions of dollars in cash, the decision makes sense, as the crypto’s scarcity allows them to avoid the massive losses that would otherwise be incurred due to inflation.
Acquiring this much BTC without going through over the counter (OTC) venues is no easy task, however, and the company’s CEO explained in a recent tweet how they went about doing this.
MicroStrategy now holds 38,250 Bitcoin
Earlier this week, Microstrategy CEO Michael Saylor announced that his company had doubled down on their Bitcoin bet, adding $175m worth of the digital asset to their holdings.
This massive purchase came about just weeks after the company had revealed its plans to switch to an alternative Bitcoin-focused financial strategy. They now intend to hold their entire capital reserves in BTC to avoid inflation and devaluation of the US Dollar, which is being printed at unprecedented rates.
This strategy is unprecedented and was kicked off by the purchase of a whopping $250m worth of the digital asset.
The company revealed on September 15th that they were buying even more BTC, conducting a $175 million purchase via the spot retail markets. This may have caused Bitcoin’s price to rally to $10,900 while the rest of the market trended lower.
Their total holdings now stack up to 38,250 Bitcoin, with an aggregated purchase price of $425 million.
Here’s how MicroStrategy market-bought 16,796 BTC
During their latest bout of purchasing, MicroStrategy used the retail market to acquire their crypto, with the company’s CEO explaining that they purchased 16,796 BTC throughout 74 hours of continuous trading.
“To acquire 16,796 BTC (disclosed 9/14/20), we traded continuously 74 hours, executing 88,617 trades ~0.19 BTC each 3 seconds. ~$39,414 in BTC per minute, but at all times we were ready to purchase $30-50 million in a few seconds if we got lucky with a 1-2% downward spike.”
The massive amount of capital that was introduced into the market as a result of these 74 hours of continuous trading likely had lasting impacts that may still be influencing Bitcoin.
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EU to see comprehensive crypto regulation by 2024
The European Union, or EU, plans to incorporate crypto and blockchain technology into its main processes by 2024.
Over the next four years, the economic union aims to firm up fresh regulations that will promote blockchain and digital asset usage for international money transfers, according to internal documents that Reuters reported on Friday.
The documents detailed:
“By 2024, the EU should put in place a comprehensive framework enabling the uptake of distributed ledger technology (DLT) and crypto-assets in the financial sector […] It should also address the risks associated with these technologies.”
Finding that almost 80% of its population transacts in paper money, the European Commission, the union’s governing entity, wants to see digital payments become more common, while aiming for immediate transaction times, Reuters explained.
The commission’s reported aims include a desire for increased data access, financial activities availability — all while aiming for increased efficiency. “By 2024, the principle of passporting and a one-stop shop licensing should apply in all areas which hold strong potential for digital finance,” the documents noted. Over the next year, fast transaction avenues will likely take over, Reuters added.
Although the COVID-19 pandemic may have expedited the desire for digital payments across the globe, blockchain and crypto assets have been the talk of the regulatory town, with many countries looking toward central bank digital currencies to streamline their payments infrastructures.
UPDATE Sept. 18, 21:00 UTC: This article has been updated.
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