Crypto roundup: BTC chops about; El Salvador plans volcano-powered ‘Bitcoin City’
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Bitcoin didn’t have the most convincing weekly close, failing to hold perceived important lines of support. According to at least one prominent analyst, though, a lengthening bull-market cycle may be playing out.
Meanwhile, pushing concerns of “blow-off tops” aside, El Salvador’s BTC-mad president is planning to build “Bitcoin City” at the base of a volcano. More on that further below…
At the time of writing, the entire crypto market cap is down three per cent since this time yesterday, according to CoinGecko data, and hanging in around the US$2.7 trillion mark.
It’s mostly red up and down the market-cap charts, including the top 100 coins. Market-health barometers Bitcoin (BTC) and Ethereum (ETH) are both down about 4.5 per cent in the past 24 hours.
Avalanche (AVAX) has meanwhile hit the top 10 for the first time, sending Dogecoin (DOGE) back to the dog house (well, #11) for the moment. Avalanche seems unstoppable right now (although it will have to stop at some point), hitting another all-time high not that long ago – US$144.96. It’s up about three per cent over the past day.
According to the excellent American crypto YouTuber and quantitative data analyst Benjamin Cowen, Bitcoin needed to finish the week with a close of at least US$59.3k to see likely further short-term upside. That level represented the eight-week moving average.
Cowen points to the Bitcoin “bull market support band”, which is below current levels, as a possible area for the OG crypto to come down and retest as support. That band is formed by the combination of Bitcoin’s 20-week simple moving average and its 21-week exponential moving average (seen below – orange and green lines), and it’s currently forming a range between about US$51k to $53k.
He’s not predicting that it will come down that far, or has to, just that it’s a crucial area to hold.
Cowen thinks if the eight-week level isn’t reclaimed pretty quickly (which might be a little higher than $59.3k by the time you read this), then it’s more likely Bitcoin will be stuck for “at least a couple of weeks between the 20-week and eight-week moving averages”.
And that might mean some sideways action between US$53k and $59k or so.
This weekly close “is not the end of the world,” says the analyst, and “the overall structure of the market still looks relatively bullish”.
He’s a big believer in a lengthening bull cycle this time around, and doesn’t subscribe to the idea of another “blow-off top” peak and market capitulation come December or January, as per the 2017/18 bull market cycle.
— Benjamin Cowen (@intocryptoverse) November 22, 2021
Fellow analyst Rekt Capital, meanwhile, is looking ahead to the November monthly close for Bitcoin. About US$58,700 is the end-of-month level he believes BTC needs to hold in order for the market to retain its strength as we close out the year.
Just when you thought El Salvador president Nayib Bukele couldn’t get any more bullish about Bitcoin, he’s announced that his Central American nation, which introduced BTC as legal tender in September, will be building a city dedicated to the OG crypto… located right by a volcano.
Amid colourful, big-screen presentations and in front of a large crowd of phone-flashing fans, the backwards-cap-wearing president made the announcement at El Salvador’s Bitcoin Week 2021 celebration yesterday.
Bukele arrived on stage as a burst of fireworks lit up the sky and AC/DC’s Shook Me All Night Long pumped out to the excited throng. The only thing missing was lasers literally blasting from the president’s eyes.
What did I just witness? 😳
— Desiree Dickerson 𓆏 (@dickerson_des) November 21, 2021
They definitely didn’t skimp on the production budget for Bukele’s entrance — Metaverse avatar and all pic.twitter.com/VwspEggmLe
— Sarah Kinosian (@skinosian) November 21, 2021
“Bitcoin City will have its own residential and commercial areas, restaurants, and a plaza,” Bukele confirmed in a tweet. He also revealed that residents would not be subject to income tax, property tax, capital gains tax, or payroll tax, although they will be required to pay a 10 per cent value-added tax to fund construction and services.
The President of El Salvador announced last night his intention to build "Bitcoin City" that would rely on bitcoin-backed bonds.
Cities that realize they can fund themselves without relying on overreaching taxation will be unstoppable in the 21st century. pic.twitter.com/O13Mq1F8Dm
— Pomp 🌪 (@APompliano) November 22, 2021
The city will be initially funded by US$1 billion in Bitcoin-backed bonds, Bukele announced. And $500 million will go toward building energy and mining infrastructure, while the rest will be… yep, you might have guessed it… used to reinvest into Bitcoin.
“Bitcoin City” is being developed by El Salvador in partnership with Blockstream and Bitfinex and will be located near the Conchagua volcano. A power plant is set for construction nearby to provide geothermal energy for the city and for the mining of Bitcoin.