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Bitcoin is now legally legal money in a sovereign state for the first time, but will it be able to recover from its adverse price trend?
Bitcoin (BTC) surged beyond $35,000 on Wednesday, bolstered by historic news that El Salvador had legalised it.
Trader “not sure” whether Bitcoin has bottomed
Data from TradingView showed a swift uptick in BTC/USD on Wednesday as Bitcoin saw its first adoption move by an official state.
The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress.
62 out of 84 votes!
— Nayib Bukele 🇸🇻 (@nayibbukele) June 9, 2021
While some hailed El Salvador’s parliament’s decision, merchants remained wary. As previously reported by Cointelegraph, predictions are expecting a short-term rebound to $35,000 before a reversal and deeper BTC price drop takes hold.
“Bitcoin printing a higher low, expecting some more bounce today,” popular trader Crypto Ed summarized on Twitter.
“Not sure yet if bottom is in, will update later today.”
A starker warning had come from trader Crypto Cobra, who this week repeated forecasts of a significant write-down across cryptocurrency. This, he said, could cost tokens 20%, meaning that Bitcoin would target $25,000.
Nonetheless, Crypto Ed said that a falling US dollar, which was on the rise as recently as Monday, might provide the circumstances for a “miracle” growth spurt in Bitcoin.
“All we need for a bullish BTC,” he said in response to the recent US dollar currency index readings (DXY).
“DXY breaking down here and it will happen.”
Altcoins enjoy respite from losses
Meanwhile, Bitcoin’s resumption of its upward trend has had a generally favourable spillover impact on altcoins.
A study at the top 50 cryptocurrencies by market capitalisation revealed that gains on the day averaged 3 percent, with notable exceptions up or down.
Ether (ETH) was trading above $2,500, although it was still more than 5% down than a week earlier.
The total crypto market worth was slightly under $1.54 trillion, with Bitcoin commanding 41.6 percent of the market.