Cryptos are gaining with Bitcoin hitting a four-day high after US politicians reached an agreement on a massive US$1.2 trillion infrastructure bill and reports that Paraguay might follow El Salvador’s lead and legalise Bitcoin as legal tender.

At 11.30am AEST, BTC was up 3.9 per cent to US$34,422, its highest level since Monday, and the overall crypto market was up 2.8 per cent to US$1.43 trillion.

“Look, I think Bitcoin’s still in trouble, not out of the woods, but the last three trading sessions have given some of the hodlers a little bit of hope,” Carl Capolingua, a Perth-based analyst with Think Markets, told Ausbiz TV this morning.

“Even if we did rally into the high 30s, that doesn’t mean we’re out of the woods,” Capolingua added.

The cryptocurrency can’t be considered a buy until it is closing consistently above US$42,000, he said. It might take or week or two, but if Bitcoin reaches US$42,000 it’ll likely push through US$50,000.

“But then we could see US$20,000 — there’s so much going on in the space at the moment,” he said.

Pepperstone head of research Chris Weston agreed that Bitcoin remained on a knife’s edge.

“It could really go either way,” he told Ausbiz. “I’m not one to sit on the fence and getting splinters, but you are in a situation where if it were to break US$31,600 and close under there, then you could see a material drop in Bitcoin.”

Retail traders might try to buy that pullback, but institutions will be selling, he said. “That downside, it could be quite explosive.”

On the other hand, if Bitcoin reaches US$34,500 or US$35,000, there might be a bit of a move up, Weston said.

“You’re basically waiting as a trader, just for the price to tell you and give you the conviction that the flow of capital is going one way,” he said.

But Weston said smaller altcoins like Chainlink “look really interesting,” though.

Link, a cryptocurrency that powers a network of oracles (data feeds), was up 7.7 per cent this morning to US$18.97, although is still down 19 per cent for the week.

Safemoon and Internet Computer were the only top 100 cryptocurrencies in the red this morning, with Safemoon down 2.0 per cent and Dfinity’s Internet Computer token down 3.6 per cent to US$34.39.

Since its launch May 10 at US$700, the ICP token has lost 95 per cent of its value.



Infrastructure bill, Paraguay

In the United States, President Joe Biden and a group of centrist senators announced agreement on an infrastructure spending bill that would cost US$1.2 trillion over eight years, with more than US$500 billion in new spending.

Passage of the bill isn’t assured, but Bitcoiners see the spending as boosting the original cryptocurrency. Money printer goes BRRR, Bitcoin goes up, the theory goes.

Meanwhile, Paraguayan member of parliament Carlitos Rejala was moving forward on a bill that would make the South American country the second to adopt the Bitcoin standard, after El Salvador. A vote could come in July, he tweeted.

American University of Paraguay tweeted this week that it would accept tuition payments in Bitcoin as of August 1, and leading entertainment group Grupo Cinco said it would allow customers to pay with Bitcoin at its 24 restaurants, nightclubs and pubs.

Join our Cryptohead Facebook group to discuss all things cryptocurrency.