© Reuters
Investing.com – It has now been a year since El Salvador decided to be the first country in the world to adopt the as legal tender. President Nayib Bukele was criticized for this decision not only by his own people, but also by the IMF and the World Bank.
Bitcoin has lost some of its value over the last twelve months and so it seems the critics are right. The new means of payment should enable more than 60 percent of people without a bank account to have access to the financial market.
The Chivo wallet, developed especially for the occasion, has been downloaded more than 4 million times, according to statements by the president. With this platform, we wanted to replace transactions in dollars, so that banks lose less money. But this approach seems to have failed.
According to former central bank president Carlos Acevedo, less than two percent of transfers are still made through the wallet. The sharp fall in the price led to a decline in the interest of the population for this new means of payment.
Bukele explained to the people this summer that they should not constantly watch the price development, because in the long term, BTC will undoubtedly be a good investment.
This statement is shared by many specialists, but the question is whether El Salvador is still going through this. Since the introduction of bitcoin as a means of payment, the IMF has blocked a promised credit amounting to 1.3 billion dollars. Public debt has exceeded 80 percent of GDP and the country is therefore threatened with insolvency.
Rating agency Moody’s has calculated that the bitcoin experiment has already cost El Salvador $375 million. And the situation could get even worse.
Michael Burry is convinced that an economic crisis at the level of 2008 threatens, because the strong world will force central banks to take extreme measures. It is not for nothing that the president of the , Jerome Powell, said at the Jackson Hole symposium that households and the economy must prepare for a period of deprivation.
This does not bode well for risky investments like cryptocurrencies.
Bitcoin price technical benchmarks
The currently loses -5.71% at a price of 18,772 dollars, while the weekly loss reaches -7.49%.
The cryptocurrency seems to have ended its consolidation phase around the psychological threshold of $20,000. An exit from the range from below occurred and the support at the 78.6 percent Fibo retracement of $19,251 gave way on the close. The door is therefore open to a test of the bottom of the cycle of 17,630 dollars.
With the RSI on the edge of oversold conditions, a temporary lull in momentum could occur at the current level. But only if the bulls manage to reclaim the 78.6 percent Fibo retracement sustainably can further short-term losses be avoided for the time being.
Above the 78.6 percent Fibo retracement, focus would shift to the resistance at the psychological mark of $20,000 and the 61.8 percent Fibo retracement of $20,523.
By Marco Oehrl