Bitcoin Is Bottoming And Ready To Rally Again

Bitcoin – Legal Tender in El Salvador!

At the Bitcoin 2021 Conference that took place last weekend, El Salvador’s President Nayib Bukele announced in a pre-recorded video message that he would propose a bill aiming to make Bitcoin legal tender in El Salvador. Tuesday the bill passed with a vast majority (62 votes out of 84 possible) in the country’s Legislative Assembly.

El Salvador is now the first and only country to make Bitcoin legal tender and although the US Dollar will continue to be the main currency, all businesses will have to accept Bitcoin as means of payment, unless they are lacking the technology to do so. According to the new legislation, nobody will be forced to pay using Bitcoin and according to President Bukele, “every restaurant, every barber shop, every bank — everything can be paid in U.S. dollars or Bitcoin and nobody can refuse payment”.

Going a step further, President Bukele said in a tweet that he instructed the president of the country’s state-owned geothermal electric company to “to put up a plan to offer facilities for mining Bitcoin with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos”. It seems like El Salvador is “all in” when it comes to Bitcoin.

Currently, Bitcoin is the only cryptocurrency in the Top 10 that’s in the green, trading at $37,200 with a timid 1.33% increase over the last 7 days. Uniswap (10th place) lost 12.33% during the same period, making it the biggest loser, while Dogecoin follows closely with an 11.39% loss, now trading at $0.3237. Ethereum is lingering near the $2.500 S/R level, moving mostly sideways but with a 6.69% loss for the last 7 days.

Technical Outlook – BTC/USD

After dipping very close to the support at $30,000, Bitcoin rebounded higher, probably with some help from El Salvador’s new legislation and bullish stance of the President. In January the pair spent quite a while on $30K support, which became a springboard for massive gains and this increases the possibility of a similar move, especially now that we saw 3 spikes in close vicinity of $30K, all rejected higher.

However, there’s heavy resistance above the current price: the bearish trend line seen on the daily chart below, followed by $40,000 (technical and psychological level), $42,000 (which was a significant peak back in January 2021), and the 50 days Moving Average.

Considering that one man’s tweet made Bitcoin lose almost half of its value, isn’t it normal to think that a country making it its official currency would send it flying to the Moon? We’ll just have to wait and see but maybe El Salvador’s volcano-generated electricity is the answer to Musk’s environmental concerns.