BlackRock has acquired $34.4 million of Bitcoin to be included in its balance sheet. The new buy is accompanied by a remarkable surge in technical momentum and on-chain liquidity of Bitcoin (BTC). This gives a number of markets the possibility to be held in discussions about a potential breakout.
The new allocation further extols the constant interest that BlackRock has shown the crypto industry by also making recent buoyant moves in Ethereum through its iShares Ethereum Trust (ETHA).
Although there has been some decline in Ethereum in the last two weeks, it is clear that Bitcoin has been the foundation of BlackRock’s crypto strategy. This is particularly through its IBIT spot ETF, which has thus far been regarded as one of the prototypical products available to traditional investors looking to approach cryptocurrencies.
Bitcoin Trading Above $118,000 as Technical Patterns Align
The Bitcoin price stood at $118,019.87 as of press time, with a day-to-day gain of barely 0.02% based on CoinMarketCap data.
Intra-day trading exhibits a slight correction of up to $117,000 during the evening in the U.S. trading activity, followed by a rebound by the Asian and European markets.
After reaching a price of over $118.5k, briefly breaking the local high of more than a week, Bitcoin went back down a bit, which indicates a cautious degree of optimism.
Technically speaking, in a wider view, Bitcoin has shown over the last several years what is now considered a textbook example of a Cup and Handle pattern. This is a bullish formation that has historically indicated a breakout has occurred following a consolidation phase. The cup is created during a long-term bottoming process and is followed by the shorter handle that acts as a shakeout before breakout.
As the chart provided by market analyst Merlijn The Trader shows, Bitcoin has already passed the retest stage. It now attempts to go back to the neckline after the first breakout, and is now gathering forces in order to make another bullish leg.
This arrangement has additional credibility since the recent allocation of BlackRock occurred at a time when they had confidence levels in the current price levels.
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Blackrock Going Big on Crypto
Despite BlackRock considerably exposing itself to Ethereum, buying BTC remains the most important crypto ETF asset. The company has bought more than 1.2 billion ETH in the last week in the form of an ETHA.
The share of assets under management (AUM) in crypto ETFs, which Ethereum ETFs now comprise about 13% of. This is an increase of up to 5% in the last two months alone. On the contrary, Bitcoins have lost up to 8% of market share, which is measured at 82, with a huge advantage.
Remarkably, the recent approval of in-kind redemptions by both Bitcoin and Ethereum ETFs by the U.S SEC eliminates the sell pressure on redemptions. This will also allow more stability in the market.
Such a regulatory change has the potential to attract more institutions to the space, particularly in the case of Bitcoin, due to its deeper market thickness and precedent in the case of a macro hedge.
As long as Ethereum develops its story, the structure of market structure of Bitcoin is quite healthy. The merging of a squeaky clean technical formation, the influx of institutions into the equation, and a healthy underpinning above 117K all give reason that things are looking up.
But in spite of this bullish narrative, there continue to be short-term resistance levels between 119,500 and 120,000 dollars. The price action over the next few sessions will be crucial in establishing whether or not Bitcoin can break firmly out to new all-time highs.
The Bitcoin price could gain the possibility to even retest or exceed the $130000 level in case of a full-blown play out of the pattern.
