Bitcoin has shrugged off a drop to $11,300 for the third day running.
- The cryptocurrency dipped to $11,287 at 09:10 UTC Thursday, only to chart a quick recovery to levels around $11,500, according to CoinDesk's Bitcoin Price Index.
- Bitcoin is possibly being buoyed by the uptick in gold prices.
- At press time, the precious metal is trading at $1,935 per ounce, having risen back above $1,900 on Wednesday.
- The one-month positive correlation between bitcoin and gold recently reached record highs, supporting the store-of-value narrative surrounding the cryptocurrency.
- As such, the cryptocurrency may be less affected by losses in the European stock markets.
- Major European equity indices like Germany’s DAX and U.K.’s FTSE are down 0.30% and 1%, respectively., and the pan-European Stoxx 600 index has shed 0.4%, according to data source Investing.com.
- Seemingly, the appetite for risk has weakened over fears that the current stalemate between the U.S. Republicans and Democrats over additional fiscal stimulus could drag on for weeks.
- Bitcoin still remains vulnerable to a pullback in equities, according to Joel Kruger, a currency strategist at LMAX Digital.
- While the repeated rebound from sub-$11,300 levels is encouraging, the cryptocurrency is still trapped in an ascending triangle.
- A breakout would imply a continuation of the rally from lows near $9,000 observed in July.
- A move below the lower end would confirm a short-term bearish reversal.
- “Bitcoin has to break $12,000 and then $14,000 to get to new highs," Alex Mashinsky, CEO and founder of crypto lender Celsius, told CoinDesk.
- Upside has recently been capped by short-sellers and hedging by profitable miners, Mashinisky added.
Whale population rises
- While bitcoin is consolidating below $12,000, the number of entities (clusters of addresses controlled by the same network entity) holding at least 1,000 BTC continues to grow.
- The metric jumped to 1,874 earlier this week, the highest since August 2017, according to data source Glassnode.
- The continued rise in the so-called whale entities could be taken as a sign of investor confidence in bitcoin's long-term price prospects.