Bitcoin struggled to stay above $50,000 just a few days ago but fast forward to the present and it is well above that resistance level by more than $1,000. That kind of price increment is often caused by a potential catalyst event which happens to be El Salvador’s BTC adoption.
Bitcoin is currently trading at $51,344 which represents a 2.49% gain in the last 24 hours and 7.69% in the last 7 days. This bullish momentum has allowed it to push beyond the resistance it experienced around the $50,000 price range, confirming that it is on its way towards the previous all-time high. Its gains in the last 2 days have sent it back on the bullish trajectory that it has been on since July.
Source: Binance
The moving average confirms Bitcoin’s bullish trajectory while the RSI indicates that there might be room for some more gains since it is yet to be overbought. The next major resistance level is expected at around $57,000 which means we might witness another substantial rally if there is enough demand and as long there is no black swan event in the next few weeks.
Bitcoin owes its rally today to reports that El Salvador is about to turn Bitcoin into legal tender, a move that is expected to take place on September 7. The event might be one of the most anticipated Bitcoin catalyst events in recent times because it can potentially result in a massive wave of buying pressure that will significantly push up the price of Bitcoin.
El Salvador’s decision to adopt Bitcoin as legal tender is a big deal for the crypto market because it might trigger a chain reaction that will lead to massive global adoption. Many other countries especially those whose economies have not been doing well might decide to go down that road too, pushing BTC on the fast track to mass adoption.
Many crypto traders will likely buy Bitcoin or add some more BTC to their existing portfolio in anticipation of the buying pressure that will happen tomorrow. More than 700 million transactions have so far been registered on the Bitcoin network ahead of the major event tomorrow and buying is expected to take place due to FOMO. On top of that, there is an ongoing movement calling on people to stand with El Salvador’s decision by buying just $30 worth of Bitcoin. If this movement can attract enough people, then it might contribute significantly to the demand for the cryptocurrency.
This event will likely result in enough demand to push Bitcoin closer to its previous highs and many analysts are more optimistic than ever before about BTC’s potential to reach $100,000. However, it will likely not be a straight path all the way. For example, numerous events may suppress Bitcoin’s price action and potentially trigger another massive selloff. For example, the U.S Senate will vote on the Infrastructure bill later this month, which could potentially impose strict regulatory requirements on the crypto market. The FED is also slated to announce its plans for bond purchases in the next few weeks and the outcome might also trigger a selloff.
Sydney has 20+ years commercial experience and has spent the last 10 years working in the online marketing arena and was the CMO for a large FX brokerage.
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