El Salvador Getting Ready to Adopt Bitcoin in Sep – Analysis, 30 Aug
On Monday, August 23rd, the President of El Salvador Nayib Bukele announced that the country is getting ready to adopt Bitcoin as a legal tender later in September. The preparation process includes the roll-out of 200 Bitcoin ATMs and the arrangement of 50 banks across the country to integrate the cryptocurrency:
Interestingly, Cuba, another country from this region, announced that it was considering Bitcoin adoption too. On Thursday, the Cuban government said that it would recognize and start to regulate the use of cryptocurrencies within the country, according to a resolution published in the Official Gazette.
As the adoption of cryptocurrency continues to grow, Cuy Sheffield, head of the crypto department at VISA, said that he envisions ‘a future where your crypto address becomes as important as your mailing address.’
The number of retail investors adopting cryptocurrency is growing, and what is more, institutional investors are also accumulating crypto. Morgan Stanley, one of the largest investment banks in the U.S., continues to increase its investments in Grayscale Bitcoin Trust (GBTC). According to recent SEC filings, it bought approximately 6.5 million shares of GBTC, worth around $240 million.
During this past week, the crypto market took a short break – most of the major cryptocurrencies started to consolidate. The Monday market starts with a sideways movement as well. According to Coin360.com, one Bitcoin costs €40,633.53 (-1.06%), one Ethereum – €2,694.69 (-0.69%), one DOGE – €0.2363 (+0.97%), and one UNI – €22.37 (-0.05%):
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 small bearish candlestick. Therefore, the sequence of bullish candlestick has been interrupted, and the traders should be very cautious:
Nevertheless, this small bearish candlestick sill has a local low above the previous one and a local high above the previous one. That means that the bulls are probably just taking a short break, but the dominant sentiment remains bullish. That’s why if, in the daily chart (1D), BTC/EUR bounces off the lower line of the Ascending channel (uptrend), an opportunity to open a long position will appear:
In the weekly chart (1W), ETH/EUR has formed a Doji after the Hanging Man candlestick formation:
Although the Hanging Man is a typical trend reversal candlestick formation that usually occurs at the top of an uptrend, the Doji doesn’t confirm this bearish signal. That’s why we think that the combination of the Hanging Man and the recent Doji indicates that the market is entering a period of indecision (consolidation).
Also, we would like to mention once again that, as long as the sentiment in the weekly time frame remains bullish or neutral then, in the daily time frame (1D), we will wait for the right moment to open a long position:
As can be seen from the chart, if the price drops to the lower line of the channel, we will wait for a rebound to enter the market and catch the next wave of price hikes within the channel.
In the weekly chart (1W), DOGE/EUR has formed a couple of bearish candlesticks with descending local highs and descending local lows:
This sequence of small bearish candlesticks indicates that the bulls are temporarily losing control over the market. That’s why traders should be very cautious.
Interestingly, in the daily chart (1D), DOGE/EUR is just slightly above the 30-day Moving Average (MA 30) and the 90-day Moving Average (MA 90):
We expect the moving averages to support the price. Hence, the most likely scenario soon is a continuation of the sideways movement.
In the 4-hour chart (4H), UNI/EUR has formed a Bullish Flag:
Because the Bullish Flag is a common trend continuation pattern, we will wait for the price to exit the flag upwards (buy signal) to open a long position. An additional bullish signal (buy signal) will be if the UNI price drops down to the neckline of the Double Bottom and then starts to increase.
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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.