Crypto Analysis

Bitcoin Breaches $52,000, Becomes Legal Tender in El Salvador

Ethereum trades with 0.1 per cent gain; Solana continues as top contender for decentralised finance

Bitcoin Breaches $52,000, Becomes Legal Tender in El Salvador
Bitcoin Breaches $52,000, Becomes Legal Tender in El Salvador

The broader crypto market climbed to new local highs riding on the bullish event of Bitcoin (BTC) becoming a legal tender in El Salvador from today. The global crypto market cap stood at $2.38 billion, up by 1.6 per cent as of 9 am IST. Investors rushed in to capitalise on the market euphoria as trade volumes across exchanges soared by 18 per cent to $141 billion.

BTC, after getting rejected once at the $52,000 level yesterday, bounced back from support at $50,970 to successfully breach the psychological resistance today. BTC is currently trading at $52,850 with a 2.2 per cent overall gain. BTC trade volumes surged by a massive 27 per cent due to active buying triggered by euphoria around El Salvador’s move. BTC’s support levels are forming at $52,150 and $51,900 while its next major resistance will be at $53,000.

Ethereum (ETH) continues to remain in a consolidation phase just below the critical resistance at $4,000. ETH is currently trading at $3,930 with a modest 0.1 per cent gain in the past 24 hours. Its support levels are expected to come at $3,830 and $3,700.

Among the top 20 cryptocurrencies, Solana (SOL) rallied the most by 20 per cent continuing to emerge as a top contender for decentralised finance (DeFi) and NFT applications. SOL’s price has increased by 6x in the last 2 months while the price of Cardano (ADA), its key competitor, dropped by 1.8 per cent today ahead of its smart contracts launch on Sep 12. Ripple (XRP), Polkadot (DOT) and Bitcoin cash (BCH) posted a little over 3 per cent gains while the rest of the pack were either in consolidation or on a downtrend.

With BTC fundamentals such as the mining hashrate recovering back from its July lows, El Salvador’s adoption and exchange balances dropping to levels seen in late 2018, analysts expect a supply squeeze that could possibly push BTC further towards $55,000 in the upcoming days lending momentum to the market.

Top Gainers today:

  1. FTX Token (FTT) : 29.4%
  2. Solana (SOL) : 20.0%
  3. Theta (THETA) : 13.7%

Top Losers today:

  1. Internet Computer (ICP): -8.6%
  2. Audius (AUDIO): -7.9%
  3. Filecoin (FIL): -6.3%

Analysis includes the top 100 cryptocurrencies only as of 9 am IST

Source: CoinMarketCap

Crypto News at a Glance:

  1. Bitcoin officially became a legal tender in El Salvador today making it the first country in the world to put a cryptocurrency on their balance sheet and hold it in their reserves.
  2. Global crypto exchange FTX exchange has launched a NFT marketplace that allows US-based customers to mint, buy and sell NFT’s that are traded across Ethereum and Solana blockchains.
  3. Mexican financial and retail giant Grupo Elektra is planning to enable support for the Bitcoin Lightning network. Bitcoin’s Lightning Network is a layer 2 payment solution that enables secure and quick transactions on the Bitcoin network.
  4. Layer-2 Ethereum scaling solution Optimism has integrated decentralized oracle network Chainlink (LINK) to provide decentralized apps (dApps) with high-quality, tamper-proof data feeds on-chain for various assets.
  5. Former Huobi Executive has launched a $25 million fund aiming to bridge centralised finance (CeFi), decentralised finance (DeFi) and the Metaverse. Metaverse is a virtual shared space created by the convergence of virtually enhanced physical reality, augmented reality and the internet.

DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.

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Outlook Money
October 2021

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