Bitcoin price rebounds to $103k due to MicroStrategy $1.1 billion BTC purchase
Bitcoin hits $103K after dip below $100K support
This week kicked off with Bitcoin experiencing a significant price dip below $100,000, only to rebound sharply, driven by strategic market moves and technical support levels. Here's a closer look at the factors influencing Bitcoin's price trajectory.
On Monday, Bitcoin broke out of its 10-day consolidation phase, with the price falling below the $100,000 mark. However, the cryptocurrency found robust support near the 50-day Exponential Moving Average (EMA) at approximately $98,300, which sparked a quick recovery. This resurgence might have been bolstered by a notable market player, MicroStrategy, known for its aggressive Bitcoin acquisition strategy.
BTC price dynamics (November 2023-January 2025). Source: Tradingview
MicroStrategy, an enterprise software company, made headlines by purchasing Bitcoin for the twelfth consecutive week. Between January 21 and January 26, they invested about $1.1 billion, acquiring an additional 10,107 BTC. This brought their total holdings to around 471,107 BTC, which now represents over 2% of the entire Bitcoin supply, valued at approximately $30.4 billion. Their consistent buying could have been a catalyst for Bitcoin's price recovery, showcasing confidence in Bitcoin as a long-term investment.
Bitcoin recovers 1.7% as key technical indicators suggest bullish momentum
Following the dip, Bitcoin not only regained its footing but also added gains. By Tuesday, it had increased by 1.7%, trading at $103,000. This recovery was mirrored on technical charts, with the Relative Strength Index (RSI) on the 4-hour chart moving from an oversold condition back to neutral, indicating a potential stabilization of the price momentum.
The technical indicators provide a clear narrative of market sentiment. The recovery from the 50-day EMA suggests that despite short-term volatility, there's substantial buying interest at lower levels, potentially driven by entities like MicroStrategy. This scenario not only supports a bullish outlook but also highlights the resilience of Bitcoin against price drops.
Bitcoin's drop below the $100,000 level caused over $600 million in liquidated positions. The 3.5% price decline erased Bitcoin's earlier gains, reducing its year-to-date increase to 6.7%.
