Bitcoin broke $11,000 earlier this morning. Unfortunately for all of us, it didn’t last. The currency rose beyond the $11K level only to fall back to $10,800 – a $200 fall within just a few hours. This is exactly what happened when bitcoin first struck $12,000 in August. The behavior suggests that perhaps $11,000 is the new resistance station that bitcoin will have to overcome.
Bitcoin Shoots Beyond the $11K Level
Having said that, many analysts are pleased that the currency did manage to shoot beyond $11K, a line it hasn’t even come close to in the past few weeks. Joe DiPasquale – the head honcho behind Bit Bull Capital – explained in an interview:
For now, $11K remains a ceiling until bitcoin crosses it, closes a daily candle above it and then successfully tests it for support the next day. Meanwhile, the 20-day moving average support at $10.7K remains valid. Finally, the fact that bitcoin did not drop below $10,000 in the past two weeks should inspire confidence in the level’s strength as an established support.
Meanwhile, Tim Enneking – managing director of Digital Capital Management – said that $10,000 is proving to be a hardcore support level, and that he doesn’t see the world’s number one cryptocurrency by market cap dropping below this line anytime soon. He states:
$10K has now been established as a strong support level (even if the futures gap at $9.7K is filled, the price will only dip down to that level briefly. There is major, long-term resistance at $12K. Assuming that resistance turns into support (probably in early Q4), then the $14K wall looms – although it may prove to be less of a barrier than $10K was and $12K looks to be and simply be a step on the run to the ATH. Given the currency macro environment and all of the fiat institutions and writers who now recommend that BTC be a part of every portfolio, the odds are clearly stacked in favor of BTC continuing upwards.
Bitcoin’s behavior as of late is considered unique in that often, whatever bitcoin does, many other altcoins will typically follow in its path. This time, however, bitcoin stands alone in its recent cross beyond the $11,000 mark. Several other cryptocurrencies did not take advantage of bitcoin’s bullish patterns to ride the wave into higher price territory.
A Solid Strategy Comes Forth
Analyst Willy Woo claims that the big reason behind bitcoin’s sudden leap is the fact that MicroStrategy just added another $175 million in BTC to its wealth stash. He claims that this was not necessarily an attempt to hedge the company against inflation or harsh economic conditions, but rather a strategy specifically set out by the company to “adopt a bitcoin strategy.”
If that’s the case, it suggests MicroStrategy and companies like it are looking at bitcoin as a potential replacement for products such as cash and credit.