The Crypto Market Turns Green. Breakout or Breakdown?
BTC/USD: It’s All About the Trend Lines
The recent days have been quite fruitful for the apex cryptocurrency Bitcoin, as we saw it climb back up close to $100K from a low of $93,300. It is currently changing hands at $98,600, with a 1.6% increase over the last 7 days, and is challenging the 50-day Moving Average. A break of this barrier could spark additional upside, possibly above the key $100K level.
The entire month of February has been bearish for Bitcoin, or at least that was the case until now as the last week has been mostly bullish, particularly the last 3 days. The slowdown period can be attributed to accumulation, which is normal after a period of gains and usually precedes a new leg of an uptrend.
MicroStrategy Pushes for U.S. Bitcoin Reserve
Speaking of accumulation, Michael Saylor, founder of MicroStrategy, which just rebranded to Strategy, recently expressed his support for a U.S. Bitcoin reserve, saying that the U.S. should own 20% of the entire Bitcoin supply.
This opinion is not so outlandish if we take into consideration that Strategy is the biggest owner of Bitcoin, currently holding 478,740 coins, worth roughly $47 billion. To put things into perspective, the U.S. Petroleum Reserve is estimated to be worth $29 billion. If somehow the U.S. would decide to follow Saylor’s advice and buy 20% of the entire circulating BTC supply, that would be about 4 million coins and would cost around $392 billion.
MicroStrategy’s portfolio profit is around 51% and its main investment vehicle is Bitcoin. The company constantly buys Bitcoin, and currently, their average purchase price is $65,000. Their shares are up 360% over the last 12 months, so considering all this, it’s almost normal for the founder of the biggest BTC whale company in the world to urge the U.S. to spend almost $400 billion on Bitcoin.
Chart Analysis – BTC/USD
Bitcoin is showing bullish signs but it is also facing major hurdles to the upside. We could be at a turning point that may drive the next medium-term move, deciding whether it will be bullish or bearish.
The bullish trend line that connects all the lows starting from last December, provided great support and triggered a bounce this Tuesday. All the next days closed higher and now the bulls are challenging a key confluence zone.
There is strong resistance here and that’s why a break would open the door for the ATH. We have the 50-day MA, which is basically touching the price, there is a very important bearish trend line in very close vicinity and of course, the key $100K level.
Failure to break this cluster of resistances will most likely bring the price back towards the bullish trend line and a break would open the door for a deeper retracement, possibly into the $90K zone.
