BTC becomes legal tender in El Salvador: 5 things to watch in Bitcoin this week

Bitcoin (BTC), which has a new week at a price of $51,000, starts a new week. Has it overcome crucial resistance?

Bulls now target $54,000 or higher after the weekend’s surge in BTC price action.

It is difficult to keep $50,000 for longer than a month, let alone beating out the sellers at $51,000 or higher. Anything could happen in the next hours and days.

Cointelegraph looks at five things to consider when considering where Bitcoin might go next.

Are $51,000 sellers being beaten?

Analysts have referred to it as the “crucial” or “final hurdle”. Bitcoin now has $51,000.

It took a while for the move to happen. Multiple attempts to break $50,000, which is a psychological barrier, failed to turn it into support. Bulls who had previously struggled to sustain higher levels of momentum were unable to handle the volume of sellers in excess of the range.

However, the night of Sunday to Monday saw a shift in the paradigm. BTC/USD reached $51,000 for the first-time since May’s mid-May. Now the question is, “Can it hold?”

Some people find the answer obvious.

bitcoin crypto el salvador

Analyst William Clemente stated that he was targeting $54K. Just before the momentum really took hold, Michael van de Poppe, a Cointelegraph contributor, described a $51,000+ BTC “great”.

BTC/USD reached a high of $52,000 in the event before consolidating and cooling off.

BTC/USD buy-and-sell levels (Binance) as at Sep. 5. Source: Material Indictors/Twitter

This puts the pair at the top of the resistance wall with $52,000 remaining to be a significant hurdle before bulls return in much more favorable conditions.

“There is a vol gap, which is simply air. This could cause price to move quickly,” Pentoshi, excited, said after analyzing the spot price setup.

“Price is also higher than the PoC. Buyers are in control

Pentoshi had previously claimed that $50,000 was not a technical landmark. He stated that $48,700 was an important daily close to ensure further upside.

El Salvador adopts Bitcoin

Bitcoin will be legal tender for a sovereign state this week in a symbolic, but less technical, move.

El Salvador will use Bitcoin alongside the U.S. Dollar on September 7.

Despite repeated warnings from international organizations, including the International Monetary Fund (IMF), to stop the move, Nayib Bukele, the president of Pakistan, has not given up. Bitcoin adoption and a new major experiment will now begin.

In a series tweets, Alex Gladstein, chief strategist officer at the Human Rights Foundation stated that El Salvador is making a huge technological leap into the financial future.

Gladstein mentioned Bukele’s political actions as one of the problems that make Bitcoin adoption an interesting chapter of the country’s past. However, any El Salvadorean can still reap the personal benefits of Bitcoin adoption.

He said that Bitcoin could be a huge opportunity for Salvadorans who are open-minded, willing to work hard and willing to learn about it.

Brazil is the latest hot topic on social media. The Bitcoin community will each purchase $30 of BTC to support the law.

Last week, El Salavdor’s government approved a motion to establish a $150 million Bitcoin fund.

Bitcoin poised to record fourth consecutive difficulty gain

Bitcoin’s price action is supported by the fundamentals that refuse to relinquish their gains.

The next automatic readjustment, which will add 2.5% to Bitcoin’s difficulty in just two days, marks the fourth consecutive increase.

Cointelegraph reported last Wednesday that this would be the first such event since February, when Bitcoin reached $50,000.

The most important indicator of miner activity, and perhaps Bitcoin’s most important feature is difficulty adjustments. They show no signs of slowing down in an amazing return to form that set in after the Chinese miner rout of May.

The hash rate continues to rise, surpassing 130 exahashes per seconds (EH/s), this weekend, and is now only 37 EH/s lower than its all-time highs.

The hash rate has seen a significant boost from new hardware, relocating miners and active miners. At its lowest point, it was around half its 2021 peak.

Stock-to-flow points up to $100,000 by Christmas

The stock-to-flow family (S2F), one of Bitcoin’s most accurate price prediction tools, is updated every month.

Although BTC/USD remains well below the model’s technical daily target, PlanB, the creator of the model, accurately called August’s monthly close at $47,000.

The analyst said that September was due to close at $43,000 and that a $100,000 average price later in the year was possible.

He tweeted Sunday along with a chart, “Baseline S2F Forecast of $100K by Christmas Still Stands (or more precisely: $100K average during this halving period 2020-2024),”

“On-chain indicator (non S2F) shows no sign yet of a top (no red dots). This is consistent with the S2F forecast.

Bitcoin is now in the “orange” phase, the last time it experienced an upward price surge was in the second half 2017. PlanB said that the BTC price action is “like clockwork”.

He said, “I think that we go much higher than $100,000,” and added the prognosis on the current halving cycle, which will end in 2024.

Extreme greed is back

The concern that Bitcoin prices will rise too fast may be true.

The Crypto Fear & Greed Index sentiment gauge shows that traders are back to “extreme greed”.

Fear & Greed has a score of 79/100. This means that it is just 16 points from its historic top zone. This area has been a source of corrective actions in the past.

To avoid overspending, BTC price increases must be steady and slow. Impulsive moves could prove unsustainable.

However, the Index saw 79 in August and has remained between 70-80 for the past four week.

The expectation of funding rates is aided by lower rates than when BTC reached $50,000 in the early part of this year, and with less euphoria that April.

This means that traders are more cautious than usual, even if they do not feel bearish, as the price attempts to regain its $50K level. This could actually increase the likelihood of a short squeeze and more upside for Bitcoin’s price in the next days.

Read more: https://cointelegraph.com/news/