On September 14, Bitcoin surprised the market by breaking through the $60,000 mark. This was the second time Bitcoin broke through this price range, after falling below $65,500 on August 26. Although the largest cryptocurrency is now able to break through $60,000, it is trapped between the previous price and $60,800, which it broke below on August 29. Investors will be happy to see such a move, but there are some concerns. Let's explore what caused it and what will happen next.
Microstrategy buys more Bitcoin
On September 13, Microstrategy purchased another 18,300 Bitcoins, increasing the company’s holdings to 244,800 BTC. Microstrategy is the largest publicly traded Bitcoin holder. The entire cryptocurrency market is worried about a price crash, as September is the most bearish month in BTC history.
When the market panics, it’s an opportunity for whales, and that’s exactly what MicroStrategy did. With this latest purchase, the company’s average purchase price per Bitcoin reached $38,585. This massive Bitcoin purchase provided the necessary boost to the market and it started to rise.
Trends on the chart
Last week, the price of Bitcoin was around $52,000, rising more than 15% in just seven days and currently trading at $60,384. Earlier, the price was hovering between various moving averages. Although historically, there has not been much support for Bitcoin this month, it has been pushing the limits.
One of the biggest challenges was to break above the 200-day moving average as this would have surely sent the price down. However, MicroStrategy came to the rescue. They bought 18,300 Bitcoins, let the dice roll, and the asset not only broke above the 200-day moving average but also the $60,000 barrier. Currently, the price is struggling to bypass the $60,800 area as it had previously served as a huge resistance. The possibility of a rejection from this point onwards cannot be denied.
Investor fears
"IntoTheBlock" data shows that at the current price, 84% of investors have made a profit, and 13% of investors are still in a loss. This means that the proportion of investors who bought in the current price range is 3%. A total of 75,305 bitcoins were purchased between the lowest price of US$59,130 and the highest price of US$61,281.88. There are still 1.65 million Bitcoin addresses that are in a profit. They bought at the current price, so they neither lost money nor made a profit.
Although investors are happy that Bitcoin rose today and broke through the $60,000 range, there are still huge risks in the future. In the price range of $61,281 to $82,500, there are 6.88 million Bitcoin addresses with a total holding of 3.1 million BTC. These data show that Bitcoin faces huge resistance to further rise.
Trader's Position
Talking about traders, a total of 34,678 traders were liquidated in the last 24 hours with a total liquidation value of $126.4 million. The rise in Bitcoin price caused short traders to lose $101.56 million worth of assets.
The open interest-weighted funding rate has dropped to -0.0061%, indicating a short squeeze. This means short traders must buy back their trades to avoid further losses.
Looking to the future!
Although Bitcoin managed to climb to $60,000, the road ahead is not so smooth. Retail investors who bought above this level may try to take profits when the price reaches this level, which may lead Bitcoin to support. The current market sentiment is neutral as the Fear and Greed Index recorded 50 points. At present, it will be interesting to see whether Bitcoin will break through the $60,800 area to fight against the next resistance level or it will fail and return to $57,000.
