Does Bitcoin price care about El Salvador?5 things to watch for Bitcoin this week

Bitcoin (Bitcoin) Another week starts below $40,000, but there are two major new landmarks.

After falling from China’s continued FUD over the weekend, Bitcoin adoption also appeared unexpectedly for the first time-from El Salvador and Paraguay.

As the world may be about to usher in the first two “Bitcoin countries” in history, there are many things to look forward to, but can the price trend of BTC catch up?

Cointelegraph studied five things that may change the status quo of BTC/USD in the next few days.

Yellen says high interest rates are “good”

A cursory look at the broader macro environment provides an interesting combination for Bitcoin traders and coin holders.

Inflation is still a hot topic in the United States, and Treasury Secretary Janet Yellen revealed that she would support higher interest rates.

Speaking Last weekend, Yellen expressed to Bloomberg News that he supports President Joe Biden’s latest huge spending plan and believes that even if it will lead to inflation, he should be trusted.

“If we end up with a slightly higher interest rate environment, it will actually be beneficial to the views of society and the Federal Reserve,” she told the publication.

Higher interest rates tend to increase the attractiveness of Bitcoin as a deflationary asset, but alongside them is the surge in the U.S. dollar this month-which has traditionally put pressure on BTC/USD.

After rebounding from 90, the U.S. Dollar Currency Index (DXY) is now busy making up for losses and reversing the downward trend that began in mid-March.

The dollar currency index (DXY) 1-day candlestick chart. Source: TradingView

El Salvador, Paraguay fail to reverse the Bitcoin bull market

In Bitcoin, everyone will say “El Salvador”.

After the payment gateway Strike began to make significant progress in the country, President Nayib Bukele officially announced that he would submit a bill to Parliament to make Bitcoin legal tender.

If it succeeds, El Salvador will become the first country on earth to do so, effectively adopting something similar to the “Bitcoin Standard”.

Bukele confirmed his plans in a video speech at the 2021 Bitcoin Conference in Miami last week, and Strike CEO Jack Marles outlined these plans at the meeting.

However, the market was almost indifferent to the news-this situation continued when Paraguayan MPs hinted at plans to integrate Bitcoin into the second world economy on social media.

“As I said a long time ago, our country needs to go hand in hand with the new generation. The time has come, our time,” Carlitos Rejala Tweet on Monday.

“This week we started with an important project to innovate Paraguay in front of the world! The real moon.”

Rejala also thanked Bukele for his “example”.

As Cointelegraph ReportHowever, El Salvador’s acceptance of Bitcoin may come at a price. In response, the commentator talked about Booker’s authoritarian leadership and the potential problems that could arise from the use of US dollar economies in doing so.

For Caitlin Long, founder and CEO of Avanti Bank, there may be greater forces at work.

“Bitcoin is attacking dictatorships, just as it is attacking large technologies,” she said wrote In one of the many tweets about this move.

“Bitcoin doesn’t care why the President of El Salvador made BTC a legal tender-it doesn’t matter.”

The shorts are installed in the classic bear signal

Looking at the immediate price movements, anyone can forgive Monday’s indifference to Bitcoin.

Despite the excitement of the meeting, BTC/USD is a firm range fluctuation, minus the highs and lows that may herald a breakthrough.

Recent attempts to do this-by evading the shrinking “compression” wedge where volatility tends to be almost zero-have stalled.

At the time of writing, Bitcoin is trading at slightly higher than $36,000.

Interest rate Alleviate, Almost positive signs can be seen in some areas of the market, but alarm bells have been sounded in other areas.

What attracted attention was short trades on the major exchange Bitfinex. As the popular Twitter account Fomocap pointed out on Monday, increases in short positions have historically coincided with major volatility—usually downsides.

“Bitfinex’s sudden short position always means something. From a drop on November 25 to a rise on May 19,” he warned.

“It’s up again.”

Bitfinex short position and BTC/USD annotated chart.Source: Fomocap/Twitter

This will reinforce existing concerns that Bitcoin has not yet completed a bearish retracement. Cointelegraph disagrees Report — Some people are waiting to return to $20,000, while others believe that such a level will never be reached.

The “parabolic” trend in the eyes of Ethereum and BTC

Bitcoin’s pain may still be the gain of altcoins.

Despite the decline in the market value of cryptocurrencies, people still hope that the “alternative season” of opportunism can still occur due to the continuous increase in the scores of some cryptocurrencies.

Of particular interest this week is the ether (Ethereum), its exchange rate against Bitcoin has been close to the recent local high of 0.081 since last month.

Currently at 0.076, ETH/BTC can prepare for further breakthroughs.Kyle Davies, CEO of Three Arrows Capital, even description The upcoming trend is “parabolic”.

Cobie, the host of Blockfolio’s UpOnly chat show, said: “If we reach 0.2 without setting a record high on both assets, I won’t care about encryption anymore.” Replied, To capture traders’ general frustration with current price behavior.

ETH/BTC reached a record high of 0.123 at the beginning of 2018, and has not been able to approach that level again since then.

ETH/BTC 1-week candlestick chart (Bitstamp). Source: TradingView

On Monday, most of the top 50 cryptocurrencies by market capitalization rose slightly in response to Bitcoin’s volatility, and some performed well, including Solana (Sol) 10% return and Tezos (XTZ) 12%.

Trader Josh Rager said: “Especially in the case of Eth/BTC holdings, you may see more room for upside forecast On Sunday’s prospects for SOL.

Miners reach the highest outflow in 2021

Bitcoin’s hash rate is showing signs of recovery, Moderate rise In recent days, it has increased from 125 exahashes per second (EH/s) to 134 EH/s.

In the next automatic adjustment after 5 days, the difficulty will still drop by about 8% to compensate for the reorganization of the mining machine caused by recent fluctuations.

Nevertheless, miners who once held confidence in the decline reduced their holdings a lot of Last week, the data showed.

As the analyst pointed out William Clement, Compared to a week ago, the miner’s balance has decreased by 5,000 BTC-a major shift.

On June 3, 3,012 BTC left Poolin, the largest mining pool, which was the largest single outflow in 2021. A day later, another 2,501 BTC was moved.

However, analyst comments Lex Moskovsky Acknowledge that these funds may not have been sold in the end.

“Even if there is a 3 times outflow of funds today, it is not for selling,” he said Tweet.

Graph of miner BTC balance.Source: William Clement/Twitter