El Salvador’s President Lashes Out at Media Critics
Bitcoin Hangs on to Gains but the Bulls Are Running Out of Steam
El Salvador’s ‘love affair’ with Bitcoin has been a polarizing issue, with some praising President Bukele’s bold vision and others condemning him for making BTC legal tender. In a recent series of tweets, El Salvador’s President made harsh remarks towards large media outlets and financial institutions for trying to discredit the country’s financial situation.
Soon after it became legal tender in El Salvador, Bitcoin’s value started to drop, putting the country in the red. Naysayers came out of the woodwork, saying that El Salvador will default on its debt responsibilities, namely a Euro bond with a deadline on January 24, 2023.
Bukele’s administration completed the said payment and it was time for the ‘I told you so!’. Bukele wrote on his Twitter: “In the past year, almost every legacy international news outlet said that because of our “Bitcoin bet”, El Salvador was going to default on its debt by January 2023 (since we had an 800-million-dollar bond maturing today). Literally, hundreds of articles,” He continued by adding ”Well, we just paid in full, 800 million dollars plus interest,”.
On a few occasions, the International Monetary Fund and the World Bank have pressed President Bukele to cut back on Bitcoin adoption, yet he remained unfazed. The latest Bitcoin surge is certainly helping El Salvador’s case but the rally could be in for a pullback; let’s take a closer look.
Chart Analysis – BTC/USD
The pair broke through the resistance zone located around $21,500 despite the fact that it was overbought even at that time. Right now, it is severely overbought and the RSI is showing a lower high, while the price is making a higher high. All this is happening above the 80 level, which shows an extreme condition.
The last time that Bitcoin was overbought, was in October 2021. The maximum RSI value at that time was 77. The maximum RSI value during the current rally was 88 and right now it is moving around 82. On top of these extreme RSI readings, the daily candles have started to show signs of weakness and even rejection. We have several doji candles (long wicks on both sides, small bodies) and several long-wicked candles which are indicative of increased bearish pressure and weakness on the bulls’ part.
All this suggests that a retracement is coming and the most probable destination is the bullish trend line seen on the chart, followed by $21,400 and the middle line of the Bollinger Bands. For the entire year thus far, the pair has been on a bullish path but for that to continue, the price needs to come down a bit first.
