During the Bitcoin 2021 Conference, Nayib Bukele, El Salvador’s President, decided to announce that the country would accept Bitcoin as a legal currency. Therefore, El Salvador would become the first world to use Bitcoin as a circulating currency, all of this in the middle of a chaotic scenario for Bitcoin and alt coins.
However, will this event affect the price of Bitcoin? What kind of effect will it have on the market? Is it enough to pump Bitcoin back to the $60,000 range and beyond? This analysis will bring some light on this important event, to let you make better decisions.
The current state of the market
Nowadays, the cryptocurrency market is chaotic to say the least. Even though BTC has managed to break through $40,000 once again, it still has to beat several levels of resistance, meaning that there will be a pullback sooner or later. BTC is still in a danger zone, and the same goes for alt coins, including ETH.
Therefore, you can see more shorts and sell options opening at platforms like Bitlevex, because the majority of traders are keen on the market diving down again, perhaps touching the $30,000 level or even breaking it, to reach the next range of $20,000 – $25,0000.
El Salvador case
Having said this, El Salvador news didn’t do much to it. It has finally pumped a bit, showing a clear Sign of Strength (SoS), even though many important events have taken place in the country:
- The country accepted Bitcoin as a legal tender
- Mr. President Nayib Bukele announced that El Salvador will start using volcanic energy to mine Bitcoin
- The country will start using BTC to send and receive remittances – to allow people to send and receive without paying fees that were as high as 50%
Even with all the good news, it has not been enough to pump the market. However, we believe this is due to the actual state of the market. Bitcoin is in a zone where it’s clearly dominated by bears, and hence, bulls are having a hard time getting it back to the uptrend channel.
Not even El Salvador and Nayib Bukele can do enough to fix the current state of the market. However, let’s see how this will help Bitcoin and the entire cryptocurrency market in the future.
There’s hope in the future
Once Bitcoin and the entire market resume the uptrend channel, we can say with confidence that the news from El Salvador will start to pay off, especially when they develop and show to the world their facilities for mining BTC with volcanic energy.
Elon Musk recently announced that Telsa would start accepting Bitcoin as a payment when 50% of the mining operations start using clean energy.
Let’s think about this scenario again: what would this do to the market if El Salvador manages to create an efficient system for bitcoin mining powered by volcanic energy? Imagine Tesla accepting BTC again and investing even more money into it – that would be enough to pump the price to new heights.
However, these are all possible scenarios, but not a reality. El Salvador news will pay off in the long run, but for now, the current state of the market will keep driving the price. We need the bulls to play off for these events to influence the price.
We only have to be patient. El Salvador will help the BTC price, but that moment is yet to come. Only patience will reward us. After all, this market transfers wealth from the impatient to the patient. Let that sink in