El Salvador: All Adult Citizens Eligible to $30 Worth of Bitcoin – Analysis, 28 June
On June 24th, Citigroup, the third-largest banking institution in the United States, officially launched a digital asset unit within its wealth management division, according to The Block. The new unit called Digital Assets Group aims at helping Citigroup’s clients invest in cryptocurrencies, stablecoins, non-fungible tokens (NFTs), and central bank digital currencies (CBDCs).
On the same day, Andreessen Horowitz, one of the leading venture capital firms in Silicon Valley, California, announced ‘Crypto Fund III’ - a new $2.2 billion fund for investing in crypto networks and blockchain projects and teams. That is the biggest crypto fund the investment company has launched since 2018.
However, the positive news related to crypto adoption from this past week is not only on institutional investors’ level. On June 25th, President of El Salvador Nayib Bukele announced that in an attempt to promote Bitcoin as a means of payment, each adult citizen would be eligible to receive $30 in free Bitcoin if they download and register a government-developed crypto wallet.
The crypto community praised the news from El Salvador. Binance’s CEO Changpeng Zhao (CZ) highlighted that this is another step towards mass adoption of Bitcoin:
Moreover, CZ underlined that this is hard money and not printed out of thin air.
As the mass adoption of Bitcoin is on the way, former New York Stock Exchange president Thomas Farley said in an interview with CNBC that “in order for Bitcoin to one day exceed gold, it’ll have to be more of an accepted form of currency.”
“I have no doubt [Bitcoin] it’ll go up, it’ll go down over the long term — I still think it’s a lower left to upper right trend, and I think we’re going to see that play out over five years,” he added.
After a week of consolidation, the Monday market starts with a solid intraday price increase reflecting the positive news. According to Coin360.com, one Bitcoin costs €29,277.89 (+5.60%), one Ethereum – €1,712.49 (+10.20%), one DOGE – €0.2165 (+5.28%), and one UNI – €14.70 (+7.47%):
Source: Coin360.com (Daily crypto market performance)
Now let us analyze the price charts of the leading cryptocurrencies against the euro in the most noteworthy time frames.
In the weekly chart (1W), BTC/EUR has formed another Hammer candlestick formation:
The Hammer is a typical candlestick pattern at the end of a correction and indicates a potential trend reversal.
In the daily chart (1D), BTC/EUR continues to consolidate within the broad range:
However, as can be seen from the chart, the 360-day Moving Average (MA 360) has already entered the range and is currently in its lower bound. Theoretically, the MA 360 should provide solid support for the price of Bitcoin.
If we consider both the weekly and daily time frames, it looks like the chances for a price rebound are increasing.
In the weekly chart (1W), ETH/EUR has formed Three Black Crows candlestick formation:
That is a common bearish pattern indicating that more people are selling the asset than buying it for three consecutive weeks. That’s why the bulls should be very cautious.
Moreover, in the daily time frame (1D), ETH/EUR has dropped below the trend line of the Ascending channel – another bearish signal:
Nevertheless, we think that if the price of Bitcoin starts to increase, then Ethereum will return to the Ascending channel because of the high correlation between the prices of the major cryptocurrencies.
Similar to the weekly chart (1W) of Bitcoin, DOGE/EUR has formed a Hammer candlestick formation as well:
We consider this Hammer as an initial signal pointing to a potential price rebound. In our view, if in the 4-hour chart (4H), DOGE/EUR breaks through the resistance line, some aggressive traders will start opening long positions to try to catch this potential rebound:
In the 4-hour chart (4H), UNI/EUR is taking a break from the current price decline, receiving support at the level of the local low from the end of May:
Theoretically, if the prices of the other top cryptocurrencies start to rebound, then Uniswap will try to break through the resistance line; moreover, some very aggressive traders may enter the market by opening long positions. However, we consider this trade to be risky.
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The analysis is purely informational and does not constitute investment, financial, trading, or any other sort of advice and you should not treat any of Bitvalex's content as such. Bitvalex does not recommend that any cryptocurrency should be bought, sold, or held by you. You are solely responsible to conduct your own due diligence and consult an advisor before making any investment decisions.