El Salvador President Nayib Bukele said the country bought 80 bitcoin on Friday amid a broader drop in token prices.
The South American country bought 80 bitcoins at around $19,000 each, valuing the total transaction at $152,000. The purchase appeared to have pushed bitcoin prices slightly higher, helping them briefly reclaim $20,000.
The buy comes after the world’s largest cryptocurrency fell below $19,000 on Thursday, falling as low as $18,763 amid a broader slide in risk-driven markets. The token is now trading around $19,430.
Stock markets also tumbled during the US session, with the Nasdaq Composite – Bitcoin’s closest parallel – losing 1.3%. Concerns about rising inflation, a possible recession and interest rate hikes by the US Federal Reserve have eroded the markets in recent months.
Bitcoin prices see slight support after buying El Salvador
The purchase of El Salvador briefly supported prices and helped the token revisit the $20,000 level for a few hours.
El Salvador today bought 80 #BTC
at $19,000 each! #Bitcoin is the future! Thank you for the cheap sale
-Nayib Bukele said in a tweet
But this boost appeared to be short-lived as the token is now trading below $20,000 again.
Friday’s purchase is also not the first time Bukele, and by extension El Salvador, has attempted to buy a bitcoin dip. Earlier this year, Bukele had bought 300 tokens at an average price of $30,744. Bukele no longer has that investment.
El Salvador is also holding bitcoin at significant losses, although the country’s finance minister said the loss had little impact on the country’s economy.
Is this the bottom or is there more work to be done?
Given El Salvador’s somewhat unsuccessful track record of timing a Bitcoin dip, it seems likely that more weakness is due for the token. With the stock market slump showing no sign of an end, Bitcoin is also likely to weaken further.
A recent forecast sees the token dropping to $13,000 – its lowest since mid-2020, but that could also precede a recovery to around $28,000 by the end of 2022.
In the short term, Bitcoin has to deal with a possible US recession, which will severely affect any capital flows into the token.
With more than five years of experience in global financial markets, Ambar intends to apply this knowledge to the fast-growing world of crypto and DeFi. His main interest lies in finding out how geopolitical developments can affect the crypto markets and what this could mean for your Bitcoin holdings. When he’s not scouring the internet for the latest breaking news, he’s playing video games or watching Seinfeld reruns. You can reach him at [email protected]
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication assumes no responsibility for your personal financial loss.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.