El Salvador Becomes First Country to Use BTC as National Currency – Analysis, 13 Sep
On Tuesday, September 7th, Bitcoin became an official legal tender in El Salvador. Therefore, El Salvador has become the first country in the world to introduce a cryptocurrency as a national currency:
The crypto community loudly applauded this event and marked this day as “Bitcoin Day” – a day that will remain forever in human history:
A bit later, on the same day, Panama introduced a bill to recognize Bitcoin and Ethereum as payment methods – an example that the other countries in the region are keeping a close eye on El Salvador:
On the next day, September 8th, the Parliament of Ukraine adopted a draft law on “virtual assets” – a step forward in the legalization of cryptocurrency within the country:
This sequence of positive events intensified the optimism in the crypto community. Now, many crypto activists expect other countries to follow the example of El Salvador. However, cryptocurrency is a long-term game, and the positive effects of introducing Bitcoin on a country level do not appear immediately. For example, during this past week, most of the top cryptocurrencies recorded a price decline.
On Monday, the bearish pressure on the crypto market continues. According to Coin360.com, one Bitcoin costs €37,665.50 (-2.11%), one Ethereum – €2,715.46 (-3.76%), one DOGE – €0.1989 (-3.06%), and one UNI – €18.71 (-5.94%):
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 time frame (1W), BTC/EUR has formed a Bearish Engulfing (common trend reversal pattern):
Although it is too early to say that a deeper correction will start after the Bearish Engulfing, the traders should be very cautious because this formation indicates that the bears are becoming more aggressive at the current level; it will not be easy for the bulls to continue the uptrend.
Also, it is worth highlighting that, in the daily chart (1D), BTC/EUR has dropped below the 30-day Moving Average (MA 30) – another small bearish signal:
Theoretically, the price of Bitcoin should receive support from the 90-day Moving Average (MA 90), currently at the level of €34,096, and rebound.
However, for the traders, it will be less risky to open long positions only if, in the 4-hour chart (4H), BTC/EUR returns to the Ascending channel (uptrend):
In the weekly chart (1W), ETH/EUR has faced resistance from the previous local high and has pulled back:
Nevertheless, the opening and closing price of the candlesticks from the current local high is higher than this of the candlesticks from the previous local high. We consider this a bullish signal indicating that it is just a matter of time for the bulls to resume the uptrend.
That is why, as we already mentioned a couple of times, in our previous three analyses, if, in the daily chart (1D), ETH/EUR receives support from the lower line (trend line) of the Ascending channel (uptrend), we will wait for a rebound to open a long position:
In the weekly chart (1W), DOGE/EUR has formed a Bearish Engulfing, similar to the price chart of Bitcoin:
Because the Bearish Engulfing candlestick formation is a typical bearish pattern, we will refrain from opening a long position in the next few days.
Moreover, in the 4-hour chart (4H), DOGE/EUR was not able to break through the upper line of the Bullish Flag last week:
As can be seen from the chart, the price of Dogecoin continues to slide down within the flag. That’s why, for now, we will remain in a wait-and-see mode until a clear bullish signal appears.
In the weekly chart (1W), UNI/EUR has formed a Bearish Engulfing as well:
Taking into account that this is a bearish formation, for now, we will stay away from this cryptocurrency pair as well.
Interestingly, in the 4-hour chart (4H), UNI/EUR has dropped to the neckline of the Double Bottom:
As can be seen from the chart, right now, the price of UNI is consolidating at the neckline. In an attempt to catch the potential uptrend renewal, we may open a small long position only if the price rebounds from the neckline.
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