Key Takeaways:
- El Salvador’s President Nayib Bukele announced the country bought 100 Bitcoins during the recent price dip.
- Meanwhile, Bitcoin prices are trying to recover from Firday’s 8.27% downtrend.
NEW DELHI (CoinChapter.com) — As Bitcoin prices fell in tandem with the global financial markets, El Salvador used the opportunity to grab 100 Bitcoins at a “discounted” price.
President Nayib Bukele continued to add Bitcoins to the country’s coffers, spending more than $5 million to buy 100 BTC when prices reached $54,000 on Friday. Bitcoin, and the wider crypto market, declined with the global market sell-off as reports of a new, possibly vaccine-resistant strain of the Coronavirus.
Bitcoin fell nearly 20% from its recent record high of $69,275 to trade near the $54,000 price level.
In detail, a heavily mutated coronavirus strain has scientists worried about the effectiveness of existing vaccines and cures. South Africa reported the first cases of the new strain. Later, another case came up in Hong Kong.
President Bukele first announced the country’s plans to buy Bitcoins when the country’s Bitcoin Law came into effect on Sept 7. At present, the country holds 1,220 BTC, including the latest purchase. El Salvador’s recent purchase increased the country’s BTC worth to roughly $66.9 million.
Also Read: El Salvador’s $1B Bitcoin experiment dents its U.S. dollar-based bonds market.
El Salvador’s president recently announced several Bitcoin-related initiatives, including a $1 billion digitized dollar-denominated bond, which the government calls “Bitcoin bonds.” President Bukele also announced plans to build a Bitcoin-centric city with infrastructural support for mining activities and almost zero taxes.
Although the Bitcoin community welcomed El Salvador’s decisions, many of its citizens have repeatedly voiced their dissent over the decisions. A major protest against the Bitcoin Law happened in Sept. The protests come from citizens of different ages and professions, as they worry about Bitcoin’s volatility and its effect on their savings.
Meanwhile, Bitcoin’s latest crash has caused markets to reenter ‘extreme fear’ on the fear and greed index. The tool is used to measure market sentiments and gives a score between 1-100. Though BTC stabilized near $55,000, the market sentiment is yet to improve.
Bitcoin Price Charts
Bitcoin’s decline tested support from the ascending channel and the 100-day MA line. BTC prices broke below the support confluence before recovering on Saturday. Further uptrend would place the pioneer crypto back in the ascending channel.
Also Read: Bitcoin week ahead Ep18: Hawkish Fed policy expectations keep BTC under pressure.
At present, BTC faces immediate resistance at $57,282. As buying pressure increases, Bitcoin would likely move above immediate resistance to challenge $59,011, near its 26-day EMA trendline. After that, BTC would try to flip the resistance at $61,572, near its 50-day MA line, into support if the uptrend continues.
However, if BTC fails to launch an uptrend, the support confluence would fail, and BTC would likely fall to support at $53,137. If the market sentiment takes hold, it could spark a sell-off that could pull prices down to $51,426. Sustained selling pressure could see prices fall to sub-$50,000 levels before regrouping near $49,629.
Despite the extreme fear forecast of the fear and greed indicator, veteran investors believe $54,000 is hardly a price level for such a reaction from the market. The last time market sentiment reached extreme fear region occurred when BTC was trading near $43,0000.
Meanwhile, BTC’s MACD continues to be bearish. Bars on the MACD histogram that plot the difference between the MACD line (12-day and 26-day EMA difference) and the MACD signal line (9-day EMA of MACD) are still negative.
On the other hand, the histogram bars seem to be contracting, indicating the MACD line is trying to move upwards towards its signal line. The relative strength index is neutral, clocking 39.92 on the daily charts.
At the time of writing, BTC was trading at $55,170, up 2.27% on the day.
