Bitcoin (CRYPTO: BTC) breached the $52,000 mark on Monday ahead of the cryptocurrency becoming legal tender in El Salvador. Every Salvadorian who downloads and registers for the government’s cryptocurrency app will receive $30 worth of Bitcoin on Tuesday at 3:00 p.m. local time/5:00 p.m. ET.
Reddit community r/Bitcoin, with its 3.3 million members, plans to support El Salvador’s adoption of the apex cryptocurrency with one user u/thadiusb calling for each member of the community to purchase $30 worth of Bitcoin at the same time Salvadorians will receive their government payment. The user proposed that if all members of the community were to follow through and complete the task the member calculated it would amount to approximately $99,505,860 worth of Bitcoin being converted from local currencies by the Reddit community alone.
Even if the fete doesn’t reach the levels anticipated by the Reddit poster, it could create massive upwards pressure on the cryptocurrency and push it up over its next resistance level at $52,666 although technically Bitcoin looks in need of further consolidation.
The Daily Bitcoin Chart: Bitcoin broke up bullishly from a falling channel on Sept. 2 and soared up about 7% between that day and Monday. After hitting the $52,219 level at 7:15 a.m., sellers came in and dropped the cryptocurrency into consolidation. On the four-hour chart, the consolidation has formed Bitcoin into a bull flag formation with the pole created on Sunday and the flag on Monday.
The rise up over the $52,000 level caused Bitcoin’s relative strength index (RSI) to reach about 72%. When a stock or cryptocurrency’s RSI measures in at over 70%, it is in oversold territory, which is a sell signal for technical traders. The low trading volume on the pull-back indicates consolidation rather than selling pressure, however, which means most Bitcoin investors are holding their positions.
Bitcoin is trading above the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The crypto is also trading about 12% above the 200-day simple moving average, which indicates overall sentiment in Bitcoin is bullish.
- Bulls want to see continued consolidation going into Tuesday for Bitcoin to lower its RSI and then for big bullish volume to come in and break the crypto up over its higher resistance level. If Bitcoin can regain the level as support, it has room to soar up toward the $55,400 area.
- Bears want to see big bearish volume come in and drop Bitcoin down below $50,505. If the crypto loses the area as support it could fall toward a psychological support level at $50,000, which aligns with the support of the eight-day EMA.
- See Also: How To Buy Bitcoin With Cash Near You: Bitcoin ATM Guide