Bitcoin market sentiment dim despite El Salvador news — what’s next?

Jaipur (CoinChapter.com) — El Salvador has officially become the first country in the world to assign legal tender status to bitcoin. Amidst all the FUD that has engulfed the cryptocurrency market, this is a refreshing piece of news. But data suggests that it hasn’t done much to revive bullish sentiment in cryptocurrencies. So will the situation improve shortly?

Bitcoin Is Legal Tender In El Salvador But Price Still Shaky

El Salvador President Nayib Bukele became the first national leader to assign legal tender status to bitcoin in his country. Undoubtedly this is a first for the flagship cryptocurrency and something that pundits predicted eons earlier.

Read More: Bitcoin Close to Becoming Legal Tender Under An Authoritarian Regime

The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress.

62 out of 84 votes!

History! #Btc🇸🇻

— Nayib Bukele 🇸🇻 (@nayibbukele) June 9, 2021

But a deep research report from analysts at Stack Funds shows that the effect of this development on the bitcoin market is net insipid. First, however, BTC bulls tried to push the benchmark crypto-asset from the weekly low near $30,000 to above the $37,000 price mark. However, the excitement died soon after a bout of swift profit-taking.

Read More: JPMorgan jeopardizes Bitcoin breakout above $37K with a bearish report

Bitcoin is currently trading within a consolidated price range of $30,000 – $41,000.

CME Futures BTC Short Positions Supersede Long Positions

Chicago Mercantile Exchange (CME) started offering bitcoin futures contracts to investors during 2017’s bull market apogee. Since then, they have become a decisive market indicator to assess bitcoin price trends. Unfortunately, from the data that the Stack Funds report offers, it doesn’t look so good.

Overall, traders don’t have faith in the flagship cryptocurrency achieving higher prices anytime soon. As a result, the number of traders who have short positions opened for BTC is higher than their long counterparts. According to the report:

Albeit a 9% price recovery, the response for Bitcoin remains muted. Sentiments are still weak – Fear & Greed Index points towards extreme fear, contracts of Bitcoin derivatives from smart money are net short, and trading activity remains weak.

It’s Not All Gloomy Afterall

The doom and gloom scenario is all how it looks now.

According to analysts at Stack Funds, El Salvador has started a trend that might pick up other Latin American nations. Thus it would make sense to see if countries such as Mexico, Paraguay, Brazil, Argentina, and others go the bitcoin route ditching the US Dollar for good. Russia has already decided to drop the greenback from its wealth fund.

Also, adopting bitcoin would help El Salvador boost its “GDP per Capita” numbers. Which, according to the report, “could translate into an imminent wealth transfer, creating the next generation of economic growth” for the nation.