Cryptos are rallying after El Salvador adopted Bitcoin as a legal currency in a historic vote yesterday evening – – then said it could run on volcano power.

BTC had gained 12.2 per cent in the 24 hours to 10.50am AEST, trading at US$37,165, while Ethereum was changing hands at US$2,587, up 4.6 per cent.

All but four of the top 100 coins had gained ground in the past 24 hours, with Bitcoin Gold up the most, by 58 per cent. Kusama was the second-best, trading up 28.4 per cent.

LEO Token and Theta Fuel, yesterday’s top gainer, were both down around five per cent.

Bitcoin Diamond, the No. 117 crypto, was up 34.4 per cent.


Volcano-backed Bitcoin

El Salvador President Nayib Bukele, who spearheaded the country’s quick vote on Bitcoin adoption, followed that up by announcing that El Salvador would use geothermal energy from volcanos to mine Bitcoin.


‘Death cross’ all but unavoidable

Despite the pump, there was still danger lurking on the horizon.

Unless BTC stages an incredible rally in the next few days, it appears likely the original cryptocurrency will suffer a “death cross” moment soon, perhaps early next week. It’s a bearish signal that occurs when the 50-day moving average crosses under the 200-day moving average.

death cross
A “death cross” will occur when Bitcoin’s 50-day exponential moving average (the yellow line) crosses under the 200-day moving average (the blue line). This chart shows Bitcoin price movements for the last three weeks, with the May 19 crash visible on the left. (Stockhead/Tradingview)

A death cross usually — but not always — indicates further downside. Many traders have warned that if Bitcoin falls under US$30,000, it would likely plunge all the way to US$20,000, the top of the 2017 bull run.

There’s also a couple of other catalysts on the horizon for Bitcoin in the next week, including the US Securities and Exchange Commission’s long-awaited decision on VanEck’s Bitcoin ETF, due by June 17 (US time). Approval would likely be massive for BTC, but it’s far from guaranteed.

The SEC could also push back a ruling again, but must give VanEck a decision by the fourth quarter.

Also, Bitcoin’s Taproot upgrade will likely “lock in” on Saturday, increasing privacy and cutting fees on the network once it takes effect in November.

El Salvador’s adoption of Bitcoin has also spurred interest in other Latin American nations, with some politicians announcing they would introduce similar bills.