bitcoin (B T c) The price rose to $36,000 in the New York session on Wednesday as investors awaited the latest data on inflation in May and El Salvador. approved a bill Which has made cryptocurrency a legal tender in the country.
The benchmark cryptocurrency rose 9.86% to hit an intraday high of $36,696, erasing a portion of the losses incurred in the previous session. In retrospect, the BTC/USD exchange rate was fell to about $31,000 On Tuesday, fears that the pair has entered a 2018-like bearish phase after peaking near $65,000 in mid-April.
#bitcoin On the chart: Key levels to watch are at $30,000 and $47,000. Below $30,000 is likely to be a deep blow towards the previous record high of around $20,000 since late 2017. A move back above $47,000 will focus on the current all-time high. $BTCUSD #crypto pic.twitter.com/X6d23G0FiH
— LMAX Group (@LMAX) May 25, 2021
On the other hand, bulls continued to present bitcoin as the primary tool against inflation, with Mike McGlone, senior commodity strategist at Bloomberg Intelligence, Considering that the cryptocurrency has a potential of $40,000 . have to reach More than reaching $20,000 in the coming seasons. He said:
Dedication? $40,000 Likely to Cross $20,000 – There were many signs of extreme bearish sentiment in bitcoin’s decline on June 8 and a retest of lower-end-range support near $30,000, which were more permanent bull-market bottoms. “
great central american pump
Bitcoin gained further momentum from El Salvador. The Central American country, led by its president Nayib Bukele, became the first country to approve bitcoin as legal tender.
The law will go into effect in 90 days, allowing Salvadorans to use bitcoin to pay for and accept goods and services. They will also be able to pay taxes in cryptocurrency.
Bukele also announced that El Salvador would use the country’s “volcanic energy” to mine bitcoin. The announcement served as a response to Tesla CEO Elon Musk bitcoin payment suspension announced on environmental concerns. Musk’s decision led to a serious FUD among investors that led to a massive crash in the cryptocurrency market.
Elon never guessed him #bitcoin The energy FUD will be met with a volcanic energy hammer.
— vijay boyapati (@real_vijay) June 9, 2021
Key inflation data ahead
Bitcoin’s latest move also stemmed from technical support. At around $31,000, traders expressed a short-term bullish conviction due to the cryptocurrency’s ability to hold $30,000 as support in recent history.
For example, on May 19, bitcoin jumped over 40% overnight after testing $30,000 as a price level.
Yuri Mazur, the head of data analysis department of the CEX.IO broker, noted that despite the latest shock, BTC/USD is likely to hold the level around $30,000 as support. The senior analyst cited high inflation as the reason behind his bullish analogy. He told Cointelegraph:
“Given the current decline in bitcoin, analysts expect the US CPI to rise to 4.7%, which could be a serious factor driving up BTC/USD. […] Ultimately, it certainly seems like bitcoin could be a big winner in the event that inflation continues to rise.”
The statements came despite concerns that the Federal Reserve would eventually hike interest rates. Inflation to your preferred target of 2%. US Treasury Secretary Janet Yellen further clarified His interview with Bloomberg That higher interest rates would be a plus.
Higher rates reduce the appetite of investors for hedging assets such as bitcoin and gold.
But, according to Yuri, the rate hike will not hurt the demand for bitcoin among investors, noting that the costly lending will reverse gains in the US stock market index. she added:
“If the Fed takes a tighter stance on rate hikes, it will slow inflation, but carry a substantial risk of stock market collapse as loans to trade will quickly increase in value. In this scenario, bitcoin will also be more attractive.” Money as a last resort of value in times of high economic risks, as more investors will be looking for a safe haven to put their money in.”
US CPI data will be released on Thursday.