El Salvador President: Bitcoin to Become Legal Tender in the Country – Analysis, 7 June
The crypto market recorded another week of consolidation. Although it is clear that sooner or later, this consolidation will end, the big question is in which direction the market will continue its journey after that. According to Bloomberg, it is more likely that Bitcoin will resume the uptrend and reach $100,000 than start a downtrend and drop below $20,000:
The big news came on Saturday, June 5, when President of El Salvador Nayib Bukele announced at the Bitcoin 2021 conference in Miami that he would submit a bill to recognize Bitcoin as legal tender in the country to boost job growth.
Bukele even added the Bitcoin ‘laser eyes’ to his Twitter profile picture:
The crypto community welcomed the news. Hashcash inventor Adam Back said that it was inevitable:
Prominent Bitcoin bull Anthony Pompliano thinks that this is just the beginning of crypto mass adoption on a national level and expects other countries to follow the example of El Salvador.
The positive news from this past week helped relieve the pressure on cryptocurrency prices. The Monday market starts with price consolidation. According to Coin360.com, one Bitcoin costs €29,694.41 (+0.86%), one Ethereum – €2,274.13 (+3.93%), one DOGE – €0.3073 (+0.23%), and one UNI – €21.78 (+1.37%):
Source: Coin360.com (Daily crypto market performance)
Let us look at the price charts of the leading cryptocurrencies against the euro in the noteworthy time frames.
In the weekly chart (1W), this past week BTC/EUR formed a small Doji:
That is just another candlestick indicating that the market is consolidating and is trying to find direction.
However, in the 30-minute chart (30M), BTC/EUR continues its journey within the Ascending channel:
If the price chart remains within the channel for one more week or so, then this will put an end to the recent correction and even the uptrend may resume.
In the daily chart (1D), ETH/EUR has been able to remain in the Ascending channel (uptrend) for the last one week:
We think that the 90-day Moving Average (MA 90) and lower line of the channel (trend line) will continue to support the price of Ethereum. That is why the most likely scenario for ETH/EUR is a slow price increase.
However, we would like to outline that in the 4-hour chart (4H), ETH/EUR has formed an Inverted Descending Triangle:
Since triangles are viewed as trend continuation patterns, and this one has formed after the correction, theoretically, the price chart is supposed to exit the triangle in the downward direction. That is why the bulls that rely on the Ascending channel in the daily chart have to be very cautious.
The price of Dogecoin formed something similar to a Falling Wedge in the 4-hour chart (4H) – a trend continuation pattern:
As can be seen from the chart, DOGE/EUR has already exited the wedge and is trying to resume the uptrend. Nevertheless, we think that, in general, the crypto market still lacks a solid bullish sentiment that will push the price of Dogecoin further up. That’s why probably DOGE/EUR will move sideways in the next couple of days until it merges with the 90-day Moving Average.
In the daily chart (1D) of UNI/EUR, the 30-day Moving Average (MA 30) has already dropped below the 90-day Moving Average (MA 90), and a Moving Average Crossover has taken place:
As we already mentioned in our previous analysis, most traders consider Moving Average Crossover as a typical trend reversal signal. In the current case, it is a bearish signal. That is why we will continue to stay away from this cryptocurrency until the situation becomes clearer.
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