An Imminent BTC Rally?
Over the festive weekend, BTC surged above the $52k level, giving investors all over the world a flicker of hope that this extremely eventful year for crypto will end on a high note for BTC.
However, the largest cryptocurrency by market cap soon lost its rallying steam, and ended up falling below the key $50k psychological barrier in the early hours of Tuesday. As a result, BTC is currently trading precariously in the lower region of $49k, where a dip below that level could trigger a further decline that would force BTC to test its support near the $47.5k zone. BTC’s dip has had a ripple effect on several other major large caps.
For example, ETH saw its price take a 6% plunge in a mere matter of hours. Many other top performing L1 tokens also had their prices slashed by more than 5% in the last 24 hours. Even NEAR, a mid-cap token that saw an unstoppable 92% surge in the past week, has also seen its price rally take a hit.
Despite this post-holiday setback for the crypto market, on-chain metrics do point toward an imminent reversal of fortunes. BTC miners, who are the main stakeholders when it comes to releasing new bitcoins into the market, can be observed to be HODL-ing said bitcoins instead.
When viewed in tandem with the fact that BTC has a finite supply, it is highly likely that a supply squeeze will be on the cards for BTC in the near future.
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El Salvador’s Bitcoin Experiment
The president of El Salvador, Nayib Bukele, has been extremely outspoken with regard to his huge support for BTC. Recently, he even unabashedly shared a screenshot of his personal dabbling in BTC on Twitter.
Based on official records, Bukele has so far already purchased over 1,000 BTC with public monies, proving without a doubt his conviction in the Central American country’s national Bitcoin conviction.
However, a matter of concern remains, as the manner in which El Salvador’s BTC holdings are added to the national Treasury remains fully opaque to this date, going against the very ideals and principles on which cryptocurrencies were formed on in the first place.