Bitcoin continued to hold key levels above $11,000 on October 14 as traders anticipated an increasingly likely breakout towards $12,000.
Data from price trackers including CoinMarketCap showed light fluctuation for BTC/USD on the day, with the past 24 hours seeing a narrow trading corridor of $160.
$11,500 provided the upper bound, with the level proving to be de facto resistance throughout the week as Bitcoin tackled the path higher.
The largest cryptocurrency initially shot through $11,000 last week, defying expectations from traders in the face of multiple external pressures. $11,500 came on Tuesday this week, with BTC/USD reaching $11,700 before a reversal sent markets back below the $11,500 boundary.
Bitcoin surprises with $11,000 surge
The impetus for the move upwards, which ended a consolidation period focused on $10,500, was not immediately obvious.
The arrest of senior executives at derivatives giant BitMEX generated huge outflows from its wallets in early October, and commentators feared for Bitcoin’s reputation as a result of the charges from U.S. regulators.
Also under legal scrutiny is John McAfee, a vocal Bitcoin proponent who has been arrested on charges of tax evasion.
Added to that were concerns over the outcome of November’s U.S. election, which increasingly points to a Democrat win and associated market uncertainty.
Gains coming now therefore caused many to stop and pause for thought.
“Bitcoin holding strong after: – BitMEX crackdown by US govt – Crypto derivatives banned by UK govt – McAfee arrest by US govt,” quant analyst PlanB summarized on Twitter.
PlanB noted that the latest monthly update on his popular stock-to-flow Bitcoin price forecasting model was following historical trends, and indicated room for further upside.
Trader Josh Rager agreed that as it stands, with bad news behind it, there was little to prevent Bitcoin testing higher resistance levels.
“Heck of a weekly close for Bitcoin,” he concluded on Monday.
“Price is back up in previous range prior to breakdown and personally, I don’t see why we can’t see $12k this week. Take it day by day, level by level.”
Big business buys more BTC
It’s not just Bitcoiners betting on a brighter future. As Modern Consensus reported, 2020 has become the year of corporate Bitcoin uptake, with several publicly registered companies making conspicuous buys.
Chief among these is MicroStrategy, the CEO of which, Michael Saylor, has since become a vocal Bitcoin promoter in the media.
MicroStrategy was joined this week by asset manager Stone Ridge, which like Saylor called its $114 million Bitcoin investment its “primary treasury reserve asset.”
Payment network Square, which shares Jack Dorsey as its CEO with Twitter, bought $50 million in Bitcoin on October 8.
While short-term price gains matter less to such buyers, Saylor had previously said that it was necessary to stop the company’s reserves, held in cash, from being inflated away. In an August interview with Saifedean Ammous, author of “The Bitcoin Standard,” he compared the situation to a slowly-melting iceberg.
“Our asset purchasing power was deteriorating as fast as we were generating income, and we weren’t going to get ahead no matter how hard we worked,” he explained.