Bitcoin rose Tuesday as MicroStrategy allocated another $10 million to what now is one of the biggest BTC stockpiles held by a public-traded company.
Michael Saylor, the founder/CEO of the Nasdaq-listed software intelligence firm, announced Tuesday that they have purchased about 295 more BTC units at an average rate of $33,808. He further confirmed that MicroStrategy now holds about 71,079 BTC worth $1.145 billion — all purchased at an average price of $16,109 per unit.
The cost to purchase one Bitcoin surged to an intraday high of $35,649 ahead of Mr. Saylor’s announcement. It later corrected lower to $34,606 due to profit-taking sentiment.
Nonetheless, Bitcoin’s potential to reclaim $35,000 and levels above it rose after MicroStrategy’s BTC acquisition.
First, the fact that a corporate firm bought BTC at near $33,000 provided the cryptocurrency a psychological price floor to resume its uptrend. Second, it attested to the long-term benefits of holding Bitcoin, especially against a bearish US dollar outlook.
The pressure on the greenback would likely tick higher as US President Joe Biden plans to launch an additional stimulus package worth $1.9 trillion. Although the Democratic leader faces resistance from the Republican Senators, who want to roll out their own stimulus bill worth approximately $618 billion.
In either case, investors realize that a new stimulus package will prove bearish for the US dollar. That was visible during the first two days of this week as global stocks rallied. They surged after Mr. Biden and his Republican opponents met to reach a deal over the stimulus.
“There is still hope of arriving at something bipartisan,” Hani Redha, a multi-asset portfolio manager at PineBridge Investments, told WSJ.
“Passing a smaller bill than President Biden’s proposed $1.9 trillion-package along bipartisan lines could be positive for stocks by opening the way to more stimulus spending later in his term.”
On its 1-day chart, such as the one featured above, Bitcoin is trading inside a falling wedge pattern. Falling Wedges are bullish reversal channels that starts wide at the start but contracts as the price moves lower. Ultimately, the asset breaks out to the upside.
Bitcoin expects to undergo a similar bearish-to-bullish route. Halfway through the Wedge, the cryptocurrency risks getting lower before ultimately jumping upward. The technical upside target for Bitcoin’s Falling Wedge is near $50,000.