By Harry Smith
On September 7, Bitcoin officially became the fiat currency of El Salvador. However, it soon experienced a sudden plunge to $42,777, resulting in nearly $4.2 billion in futures evaporated in 24 hours. It then rebounded before starting to adjust in volatility. With various favorable speculations becoming reality, Bitcoin needs another shot in the arm to keep growing. Amid uncertain market trends, short-sellers took advantage of the situation to sell off, leading to extreme panic in the market sentiment.
With bitcoin being accepted as the fiat currency in El Salvador as expected, the market lacks new stimulus for further growth in the short term. Meanwhile, the Russian President’s Press Secretary publicly stated that the country is not prepared to recognize Bitcoin and argued that fiatizing this cryptocurrency would only harm the existing financial and economic system. Given the huge divergence, short-sellers made their moves.
Bloomberg posted that the price of SOL tokens has remained firm in contrast to the sudden plunge in Bitcoin. Some analysts believe that the sharp drop in ETH was also triggered by the shift of the NFT craze to Solana. This in part highlights investors’ recognition of Solana being a potential long-term competitor to ETH. In addition, the SEC’s lawsuit against Coinbase has led to some signs of holdings reduction by some institutions, further adding to the uncertainty of the market sentiment.
BTC: The plunge of Bitcoin this time broke the MA5, MA13, MA30 average support at once and fell near to MA200. It will probably fluctuate around $46000 in the short term. However, given that too many traders are now trapped with BTC holdings, added by the strong momentum of short-selling, the price will likely to drop even further. If Bitcoin fell below the MA200, then the support level and resistance level would be around $40,000 and $53,000 respectively.
ETH: After touching the low point of $3000, ETH rose by $500 on the hourly chart. Now we are watching closely whether it can break the $3515 suppression level. If successful, the price is expected to go up to $3590 or further around $3650. If failed, it will go down and retreat to its support levels, first to around $3450 and then around $3340.
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