President Bukele announces Bitcoin City, BTC still struggling to break $60k barrier

El Salvador to build Bitcoin City, backed by $1 billion BTC bonds. Image from Twitter.
El Salvador to build Bitcoin City, backed by $1 billion BTC bonds. Image from Twitter.

Key Takeaways:

  • El Salvador’s President Nayib Bukele announced plans to build a Bitcoin-backed city.
  • BTC prices still stuggling to break above $60,000.

NEW DELHI (CoinChapter.com) — El Salvador, the world’s first country to recognize Bitcoin as legal tender, seems to be leading the drive for Bitcoin adoption. President Nayib Bukele announced the launch of Bitcoin City, with funds coming from $1 billion Bitcoin bonds.

President Bukele announced the initiative at the Bitcoin Week conference. El Salvador plans to build the city along the Gulf of Fonseca to draw power from a nearby volcano. The volcano would provide energy for the city as well as for Bitcoin mining operations.

The President further said that the city would have residential and commercial areas and amenities like airports, restaurants, etc. Additionally, President Bukele said that Bitcoin City would attract crypto investors and companies.

Meanwhile, Bitcoin prices are still trying to move above $60,000 after falling over 10% since Nov 15. BTC failed to maintain its bull run after charting a new record high on Nov 10. The flagship crypto even failed to react to the Bitcoin news coming out of El Salvador.

Bitcoin City

President Bukele revealed the plans for the upcoming city, which would be in a circular layout. The city would also have a central plaza with a Bitcoin symbol, making the whole city look like a giant BTC logo. Moreover, the city would not levy any income, property, payroll, or capital gains taxes.

The Salvadorian President also claimed that the city would have zero CO2 emissions, thanks to his plans of harnessing geothermal energy.

The layout of the proposed city. Source: Twitter
The layout of the proposed city. Source: Twitter

President Nayib Bukele also shared the country’s plans to issue $1 billion in tokenized USD denominated bonds. The bonds, called Bitcoin bonds, would pay 6.5% annual rewards through the Liquidity Network.

Recommended: SEC Rejects The VanEck Spot Bitcoin ETF Application.

Major crypto firms, such as Bitfinex and Blockstream, would actively participate in the project’s development. In a tweet, Bitfinex CTO Paolo Ardoino shared his firm will launch a securities platform, especially for the Bitcoin bonds. Moreover, the platform would be home to several local and foreign digital assets as well.

Leading blockchain technology firm, Blockstream’s Chief Strategy Officer Samson Mow also spoke at the conference. He clarified that with Bitfinex’s participation, the Bitcoin Bonds would be accessible to many crypto whales, and thus, filling up a $1 billion bond should not be difficult.

It will have a holistic urban planning approach that uses renewable energy FULLY powered by the volcano. […] Bitcoin City will provide the infrastructure for a better quality of life and the potential for economic growth and prosperity.

President Bukele at the Bitcoin Week conference,

Out of the $1 billion raised, $500 million would help create energy and Bitcoin mining infrastructure. The remaining funds would go towards buying more Bitcoin. Moreover, $500 million worth of BTC bonds would have a five-year lock-in period, taking the invested Bitcoin out of circulation.

Such a move would squeeze BTC’s active supply, theoretically leading to a price rise.

Bitcoin Price Charts

After an Oct that witnessed a historic Bitcoin bull run, BTC is having a disappointing Nov. However, as per the Bitcoin price chart, BTC prices have not broken below the July-Nov ascending channel, indicating the token’s recent dip to $55,000 levels may have been a local Bitcoin bottom.

Currently, BTC prices are bearish in the short-term range, trading below their 50-day MA line. However, if investors react to the news coming out of El Salvador, BTC prices could move above immediate resistance at $61,012, near its 50-day MA line.

Also Read: Bitcoin price will close 2021 at $70K-75K, says portfolio strategist as BTC drops below $60K.

Further upside movement would see BTC move to $62,648. Finally, sustained buying pressure could set the BTC price target to $64,770 before prices pull back.

BTC price struggles to move above $60,000. Source: BTCUSD on Tradingview.com
BTC price struggles to move above $60,000. Source: BTCUSD on Tradingview.com

If the uptrend fails, BTC prices could move down to $58,290. As prices fall, panic might set in, leading to sell-offs that could further pull down prices, bringing support at $56,597 into play. A move below $56,597 would lead to prices last seen on Oct 13, and traders might start selling to preserve profits.

As such, BTC prices could move to $54,390 before recovering. Meanwhile, BTC’s MACD continues to be bearish. Bars on the MACD histogram that plots 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.

The MACD line might be moving upwards on the Bitcoin price charts.  Source: BTCUSD on Tradingview.com
The MACD line might be moving upwards on the Bitcoin price charts. Source: BTCUSD on Tradingview.com

However, the histogram bars are moving upwards, suggesting the bearish momentum of BTC might be decreasing.

The relative strength index is neutral for BTC, with a value of 44.72. The RSI trendline seems to be moving down towards the oversold regions. If the RSI goes below 30, it indicates the asset’s prices might be ready for a trend reversal.

At the time of writing, BTC was trading at $59,033, down 1.48% on the day.

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