Bitcoin prices are in another bullish run, gaining 11.19% as of the time of writing. This comes as Grayscale’s parent company announced it was using part of its cash balance to purchase $250 million worth of Bitcoin.
The Digital Currency Group (DCG) is the parent company of Grayscale LLC, and it is investing this sum using the Bitcoin Trust shares of Grayscale. Due to the discounted nature of the Grayscale Bitcoin Trust (GBTC) shares, the transaction will be done at a price approximately 3.22% cheaper than on an exchange.
Bitcoin prices are reacting to this news positively, with fresh demand sending the BTCUSD pair towards an intraday high of 57,184.80. This is just short of the most recent high that was seen at 58,200.
Technical Levels to Watch
Traders need to see if the price will surpass 58,200 or not. If BTCUSD closes above the 58,200 mark with a 3% penetration, then we could see a run towards 60,221.29 (127.2% Fibonacci extension from 9 December 2020 low to the 8 January 2021 high. Above this mark, we see other potential targets at 63,713.22 (141.4% Fibonacci extension) and 68729.79 (161.8% Fibonacci extension).
On the other hand, a retreat at or just below the 58,200 mark sets up a potential double top on the daily chart, with the neckline situated at 43569.83. A decline below this neckline confirms the pattern and targets a potential move to the projected level at 32239.66 (38.2% Fibo retracement). Support levels that would have to be taken out along the way are 52,672, 50,006.75, 46203.12, 43569.83 and 40,981.89.
BTC/USD Daily Chart