- Square buys $50M in Bitcoin, believes that this is the currency of the future
Square is a giant American financial services, merchant services aggregator, and mobile payment company with more than $4.7 billion in revenue just in 2019. It was founded by Jack Dorsey, the current CEO and co-founder of Twitter. Dorsey has been a big fan of Bitcoin for quite some time, even calling it the 'best Internet currency' once.
According to the official announcement, the company has invested $50 million, purchasing approximately 4,709 Bitcoins.
We believe that bitcoin has the potential to be a more ubiquitous currency in the future, said Square’s Chief Financial Officer, Amrita Ahuja. As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey
This is not the first crypto investment from Square. Previously, the company launched a Bitcoin trading App in 2018 and formed Square Crypto in 2019, a team focused on contributing to the Bitcoin open-source development.
Bitcoin jumps 2.5% following the announcement
Bitcoin had a massively positive reaction to the news from Square and it's already trading at $10,886 from a low of $10,535.
BTC/USD daily chart
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This recent move has the potential to change the dynamic of Bitcoin in the short and medium terms. On the daily chart, Bitcoin has established the 100-SMA as a strong support level and it's fighting to crack the 50-SMA and turn it into support, something that hasn't happened since July. A bullish breakout above $10,890 has the potential to push Bitcoin up to $12,000 to re-test this psychological level.
BTC IOMAP Chart
The In/Out of the Money Around Price chart by IntoTheBlock shows very little resistance ahead compared to the support below. There is a massive support area between $10,563 and $10,871 where 1.5 million BTC was purchased. In comparison, from $10,891 to $11,547, only around 840,000 BTC was bought.
BTC/USD 4-hour chart
-637377656969263821.png)
At $10,920, Bitcoin is trading right around a significant resistance level tested twice on September 28 and October 1. The MACD has turned bullish for the first time since October 4 and the 50-SMA and 100-SMA are now support levels.
A rejection from $10,900 could still pose a threat for the bulls in the short-term, with the potential to drop Bitcoin down to $10,800, the last resistance level.
If bears see continuation after a rejection from the daily 50-SMA, Bitcoin could still slip towards $10,600 again.
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