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Crypto Writer
Arslan Butt
Crypto Writer
Arslan Butt
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Bitcoin price slips below $100,000 as El Salvador has struck a $1.4 billion deal with the International Monetary Fund (IMF), forcing adjustments to its Bitcoin policy while maintaining its commitment to the cryptocurrency.
Despite restrictions outlined in the agreement, the country remains steadfast in its Bitcoin strategy, holding nearly 6,000 bitcoins valued at approximately $596 million.
Adjustments to Bitcoin Policies
The IMF agreement requires El Salvador to limit public sector involvement in Bitcoin. Taxes will now be payable only in US dollars, and the government’s role in the Chivo e-wallet, previously central to Bitcoin adoption, will be scaled back. Additionally, Bitcoin usage by private businesses will remain voluntary.
These changes aim to address international concerns over fiscal management and market volatility. However, the El Salvadoran government has reiterated its commitment to purchasing more Bitcoin for strategic reserves, signaling continued confidence in its long-term value.
El Salvador’s Strategic Bitcoin Initiatives
Despite the IMF restrictions, El Salvador continues to expand Bitcoin-related initiatives:
- Educational Programs: The government has introduced “Little HODLer Workbooks” for elementary students and continues developer training through the CUBO+ program, with over 20 graduates expected in January 2025.
- Capital Market Development: El Salvador recently issued tokenized US Treasuries on Liquid through NexBridgeSV, further integrating Bitcoin into its financial system.
- High School Programs: Initiatives like Mi Primer Bitcoin and Node Nation are being integrated into high school curricula to foster crypto literacy among younger generations.
Broader Implications for Bitcoin Price
El Salvador’s policies showcase the balancing act between adhering to IMF conditions and preserving its Bitcoin vision. The government’s commitment to increasing reserves contrasts with the IMF’s caution about the risks posed by Bitcoin’s volatility.
These tensions come at a time when Bitcoin’s global price has dropped from over $108,000 to $105,000 due to broader economic factors, including Federal Reserve rate adjustments.
Key Takeaways:
- IMF Conditions: El Salvador will limit public sector Bitcoin involvement but maintain voluntary use for private businesses.
- Bitcoin Reserves: Nearly 6,000 bitcoins, worth $596 million, remain in El Salvador’s strategic reserve.
- Educational Investments: Programs like CUBO+ and Mi Primer Bitcoin aim to build crypto literacy.
While the IMF deal imposes new restrictions, El Salvador’s unwavering commitment to Bitcoin positions it as a unique case study in national cryptocurrency adoption. The evolving policy landscape will likely influence Bitcoin’s role on the global stage.
Bitcoin Price Technical Outlook – Dec 20, 2024
Bitcoin has slipped below critical support levels, currently trading near $96,220. The failure to hold the $99,549 pivot point reflects bearish sentiment, driven by a breakdown from an ascending trendline. Immediate resistance lies at $99,549, followed by $102,704 and $105,714.
On the downside, $94,340 serves as the next support, with additional levels at $92,712 and $90,874.
The RSI at 20 indicates oversold conditions, suggesting a potential relief bounce. However, the 50 EMA, now at $102,704, continues to slope downward, reinforcing a bearish bias. Bulls must reclaim the $99,549 level to regain momentum, while a sustained break below $94,340 could accelerate selling pressure.
Key Insights:
- Immediate Resistance: $99,549; Immediate Support: $94,340.
- RSI at 20.62 signals oversold conditions, but bearish momentum prevails.
- Breakdown below $99,549 confirms a short-term bearish trend.
Conclusion:
Bitcoin’s outlook remains bearish, with sellers firmly in control. Monitoring the RSI and $94,340 support level will be key to anticipating potential rebounds.
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