Bitcoin targets $53K on adoption boom in El Salvador and Germany

"Bitcoin Chain IMG_9197" by btckeychain (licensed under CC BY 2.0)
“Bitcoin Chain IMG_9197” by btckeychain (licensed under CC BY 2.0)

Key Takeaways:

  • Bitcoin prices broke above $52,000 on September 5, with the cryptocurrency now targeting $53,000.
  • El Salvador’s President Bukele announced his government purchases 200 Bitcoins (BTC).
  • Meanwhile, Germany’s Union Investment, plans to add Bitcoin to several investment funds for its institutional clients.

NEW DELHI (CoinChapter.com) — Bitcoin, the flagship cryptocurrency, built on recent momentum to reach just shy of $53,000 levels. As a result, BTC rose to its highest levels in 17 weeks. The cryptocurrency gained fundamentals from the news coming out of El Salvador and Germany.

President Nayib Bukele announced his government purchased its first 200 Bitcoin (BTC) ahead of the September 7 deadline when Bitcoin becomes legal tender. He also said that the country would be buying more Bitcoin.

Meanwhile, German asset manager Union Investment, a $500 billion firm, plans to add Bitcoin to several investment funds as part of a pilot program for its institutional clients. The move highlights cryptocurrency’s growing adoption in Europe’s mainstream economy.

Bitcoin’s Growing Fundamentals

After Bitcoin’s third halving, BTC prices have grown six-fold. In detail, halving is an event where the reward for mining new blocks is halved, meaning miners receive 50% fewer BTC for verifying transactions. There have been three halvings since Bitcoin’s launch in 2009, with the last halving in May 2020.

Twitter-based analyst Ecoinometrics highlighted Bitcoin’s price trends post halving. After the second halving in 2016, Bitcoin prices rose by 29.5%. However, in the same time frame, Ether prices rose by 120 times. Currently, Bitcoin prices are up by 600% since the halving in 2020. If history repeats, Bitcoin prices would likely reach $253,800 before the fourth halving.

Also Read: Bitcoin ticks above $50,000 as US labor market growth stalls amid Delta variant concerns.

Meanwhile, the El Salvadorian government bought its first 200 Bitcoin ahead of BTC becoming legal tender. The purchase is part of a new $150 million Bitcoin fund that the El Salvadorian Congress created last week. At current prices, the investment was worth just over $10.36 million.

While the country continues to face backlash for its decision from the World Bank, the IMF, and even its citizens, Bank of America recently highlighted at least four potential benefits to El Salvador’s decision to make BTC legal tender. According to the report, the benefits include streamlined worker remittances, progressive financial digitization, the potential to attract Bitcoin mining FDI, and greater consumer choice.

In addition, the country is building infrastructure to support a state-issued Bitcoin wallet, ‘Chivo.’.

In another update for Bitcoin, Union Investment, a Frankfurt-based $500 billion asset manager, revealed it is considering adding BTC to a small number of investment funds available only to private investors.

We are considering adding bitcoins in small amounts of 1% to 2% maximum to a handful of other funds for private investors.

Portfolio manager Daniel Bathe, in an interview.

The firm would likely implement its new investment strategy in the fourth quarter, though Mr. Bathe didn’t share a fixed timetable. Union Investment is a part of the DZ Bank Group, which owns over 800 cooperative banks. On August 2, Germany passed a law allowing institutional funds to hold cryptocurrencies, making Germany a favorite for institutional players.

However, according to a survey by financial website Finder, Germany doesn’t rank too high in retail crypto adoption. The survey estimates only 11% of Germans had exposure to digital assets. Hopefully, increased institutional interest might help bring in more retail investment as well.

Price Charts

Thanks to its recent 6-Day long bull run, BTC broke above the $52,000 mark. As such, the flagship crypto gained 13.5% from September 1’s low of $47,029.38 to September 7’s high of $53,393.15. However, BTC prices pulled back on Monday, testing support at $51,147.93.

Bitcoin prices broke above the $52,000 mark. Source: BTCUSD on Tradingview.com
Bitcoin prices broke above the $52,000 mark. Source: BTCUSD on Tradingview.com

Interestingly, BTC’s 50-Day (Green) and 200-Day (Yellow) may soon form a Golden Cross on the daily chart. In detail, a Golden cross is a longer-term bullish indicator that occurs when a faster-moving average crosses above a slower one.

Also Read: FTX announces Solana-enabled marketplace; SOL soars towards $200.

Bitcoin stays bullish across all time horizons, indicated by its prices trading above Moving Averages. Therefore, immediate support is strong for the moment. However, if prices decline below it, $50,180 would act as support for BTC. Also, BTC’s 26-Day (Red) Exponential MA acts as support at $48,623.89.

If bulls consolidate above the $52,000 level, immediate resistance for BTC lies at $53,835.89. In case of a continued uptrend, the next resistance at $55,852.62 would come into play.

Meanwhile, trend-based momentum oscillator MACD is bullish for Bitcoin, but barely. The MACD line (difference between 12-Day and 26-Day EMA) moved above the MACD signal line (9-Day EMA of MACD) on September 6, marking a bullish crossover.

Bitcoin's MACD is bullish, but barely so. Source:  BTCUSD on Tradingview.com
Bitcoin’s MACD is bullish, but barely so. Source: BTCUSD on Tradingview.com

Bars on the MACD histogram, which charts the difference between the MACD line and its signal line, are positive. In addition, the relative strength index for BTC is in the neutral region with a value of 68.52.

At the time of writing, Bitcoin was trading at $51,549, down 1.78% on the day.

How useful was this post?

Click on a star to rate it!

Related Articles

Our Partners

SwapCoin.com RapidCoin.com ChangeNOW.com Paybis.com