Bitcoin (BTCUSD) (BTC-USD)

VOLCANO BONDS OF EL SALVADOR

On September 07, 2021, El Salvador formalized BTC as its national currency. Since then, President Nayib Bukele has not stopped encouraging and announcing new and promising projects in the world of crypto-currencies.
One of these projects is the use of BTC to issue government bonds.

Indeed, in November 2021, the president announced the upcoming creation of a futuristic city, insisting that the financing of this structure should be done through the issuance of bonds: Volcano bonds.
According to local sources, El Salvador is almost ready to issue bonds. The Minister of Finance said that the preparation phase of the issue should be completed by March 20, 2022. When this phase is completed, the country will be fully ready to issue its bonds, which will be worth $1 billion.

It is important to point out that the big difference of these bonds is that they will be able to be purchased in BTC or other cryptocurrencies, democratizing access to all participants of the crypto ecosystem.
The bonds will also be listed on the stock exchange and accessible to anyone willing to invest a minimum of $100.

After making history as the first country in the world to nationalize BTC, El Salvador is taking another step forward by becoming the first country to issue debt via crypto-currency. Not missing thus to taunt the IMF which had tried to force the reversal of the president towards conventional currencies, but had only reinforced his desire for sovereignty for his country.

CRYPTO UPDATE

The battle between buyers and sellers is raging within the market, and currently, the sellers seem to have largely won. Indeed, against all odds, the market made a bullish jump today. Ether took +10%, SOL +9%, AVAX +11$ and BTC +9%.

BTC even had the luxury of breaking through its $40,000 resistance with a strong bullish candle, and could even close the day near $41,000. At the fundamental level, it is possible that the turnaround in Russia has reinforced asset buying.

Indeed, after the thunderous announcement by the Russian central bank to ban cryptocurrencies, many internal voices have risen up against this sanction by underlining the folly of such an action (some even see it as a new market manipulation in view of buying back the assets at lower cost). We can also underline the fact that El Salvador asserts its sovereignty and totally rejects the injunctions of the IMF warning it against its pro-Bitcoin policy.

CRYPTO UPDATE

For the past week, the crypto-currency market has been plunging continuously, almost in a straight line. Indeed, the total market capitalization is now valued at $1.647 trillion, after a 17% plunge since January 19. It is also worth noting that the NFT and Metaverse markets have also taken a beating, and for the time being are not uncorrelated with the rest of the market.

As for the main cryptocurrency, Bitcoin, after reaching the $33,000 area, the asset has breathed a sigh of relief today and is currently trading around $36,000. The oblique resistance zone has not been broken, however, so we are still in a bearish trend. The next downside targets are the recent low of $33,000, as well as the large support area of $31,000 - $28,000 which contains a lot of liquidity and should continue to attract the price. The major resistance in the case of an expected resumption of an upward movement, meanwhile, is still located at $40,000.

Finally, the FED has hinted that it will probably raise interest rates in March. The crypto market did not react to the news and remained rather stable following the news, however, the behavior of investors in the coming days should give us very interesting clues as to whether or not the downward movement will continue.

CRYPTO UPDATE

Sought after since the beginning of the year, BTC's $40,000 support finally gave out yesterday, under tremendous pressure from sellers.

On the fundamental side, the fear of the FED raising interest rates, the global geopolitical tensions around Mali and Ukraine, as well as the Russian central bank's proposal to ban cryptocurrencies and mining, got the better of buyers.
On the technical analysis side, the head and shoulders pattern that has been visible for some time has finally come to fruition, after a pullback to the neckline.

With our emotions put aside and the analysis being cold, the next support is at the $30,000 mark. Nevertheless, if the pattern turns out to be fully realized, $15,000 would even be possible. If it turns out that the bulls are taking over, the 1st key resistance to cross would be the old $40,000 support.

The market has completely turned around and Bitcoin has taken a lot of assets with it (BTC: -12%, ETH: -16%, BNB: -15%, AVAX: -18%, ...). Nevertheless, this test will be extremely interesting to see if the market will remain correlated to Bitcoin for long.

CRYPTO UPDATE

At the end of the week, the crypto market has been quite calm.

Indeed, apart from the announcement of the date of the transition of Ethereum to the Proof of Stake (which we will come back to), which should happen in June, no major news has impacted the market.

We can nevertheless note that some assets, such as the FTM token of the Fantom blockchain, have recorded interesting gains. Indeed, the token has taken 50% since Monday, going from $2 to $3.

Ether, on the other hand, has welcomed the announcement of the date of its new blockchain with a gain of 10%.

Bitcoin, which serves as a reference, is still searching for its price, which varies between $43,000 and $44,000. Remember that as long as we stay above $40,000, we keep an optimistic scenario in mind. Indeed, buyers can decide to take action at any time. The bullish target still remains the resistance at $46,000.

CRYPTO UPDATE

The cryptocurrency market has had a rather complicated start to the year. Bitcoin, which can be referred to understand (for now) a good part of the market, due to correlations, has indeed flirted dangerously with the $40,000 area, and even went below it for a few minutes on Monday morning. Nevertheless, buyers decided to take over, and this support (which, let's remember, has been holding since October 2020), served as a rebound zone, allowing the price to return to $44,000 today.

The next bullish target for Bitcoin is the $46,000 area (which would also invalidate the bearish head and shoulders that was dangerously threatening the asset). However, the $40,000 support area will be closely watched as it remains a key factor in the resumption of the uptrend.

CRYPTO UPDATE

Bitcoin (and the crypto market in general) has had a pretty rough week. At the beginning of the week, the computing power of the blockchain (hashrate) had reached a new record by passing over 200 exahashes/second.

However, a few days after this record, the hashrate of the network has been enormously shaken with a 12% drop, this being due to a huge power failure in Kazakhstan. The second-largest mining country after the United States, with 18% of the total Bitcoin network power, is currently under a state of emergency, declared by the president, due to rising fuel prices and angry protesters.

Currently, the price is trading at $42,000, which represents the long-awaited support zone, holding the price since October 2020 and could be an excellent opportunity to accumulate the asset.

Some whales have been accumulating millions of dollars worth of BTC since the beginning of the week.

Nevertheless, it should be noted that as a result of the decline seen since the beginning of the week, Bitcoin has made a deadly figure in technical analysis called head-and-shoulders, which in the traditional markets is extremely used by traders in order to go after targets far away from their entry price.

Indeed, although the pattern is not as strong as the triangle in which Bitcoin has been moving for over a year, if it were to occur, the theoretical target could take Bitcoin to $29,000 (which would then be the last low point of June 22, 2021), or even, if it were to occur in full, to $15,000 (predicted by billionaire HEX creator Richar Heart).

We will have to be extremely careful in the next few days, with these 2 exclusive figures, because the price has arrived in a really decisive area for the next few months.

CRYPTO UPDATE

In the new year of 2022, the crypto-currency market, following the explosion of DeFi in 2021, the craze around Nfts and the increased interest of institutional investors may well have some surprises in store for us, and behave in a way that has not been seen before in previous years.

If we look at the behavior of Bitcoin during the holiday season, we can see that after peaking at $52,000 on December 27, it entered a mini-bearish phase, until today hitting the $45,700 support, which held the price throughout December. It remains to be seen whether this support will also hold in January and allow the price to rebound. If so, based on technical analysis, we can conjecture that the former high at $52k could mean a double bottom pattern that would allow the asset to return to around $60,000. In the opposite case, the $44,000 - $40,000 area will be the last strong support (which has been holding the price since October 19, 2020).

Several whales seem to have opted for accumulation. The company MicroStrategy has indeed added to its wallet, on December 29, 2021 about 1,914 BTC, for a total of 124,391 BTC, or almost $6 billion.

THE BITCOIN CITY

After adopting the queen of cryptocurrencies, the Bitcoin, and making it a state currency since September 07, 2021, El Salvador amply wishes to continue its momentum and adopt even more cryptocurrencies. President Nayib Bukele has, in fact, announced the construction of a city entirely based on Bitcoin "Bitcoin City". The country will put $1 billion into the construction of this project.

The genius idea behind this project lies in the use of a totally green energy for the city's power supply, transportation, and especially for mining: geothermal energy. You all know that the earth's core and volcanoes produce heat. What would you say if we recovered this heat and used it (instead of using coal or uranium) to turn alternators and thus create electricity without any damage to the environment?

Many islands, including my home island, have volcanoes and geothermal power plants, which could lead to a real paradigm shift and unparalleled wealth creation for their inhabitants, if only they had competent people in charge.

CRYPTO ANALYSIS

The Bitcoin market is experiencing a bearish December for the moment. Indeed, correlations are still strong and present within the crypto-currency market, explaining the current market decline.

Nevertheless, the $40,000 - $44,000 area for Bitcoin, represents a strong support on which the price has already bounced several times (it was at this level that the bulls pushed back the bears during the flash crash on December 04). This area also coincides with the bottom of the triangle in which Bitcoin has been oscillating for over a year. It is certain that many buyers have placed their limit orders in these levels, which could represent excellent trading areas for scalping enthusiasts and trading bots.

Note, that in order to have any hope of a rise by the end of the year, the price of Bitcoin needs to break through the resistance zone that currently holds it at $49,000, and cross $52,000.

Some cryptos, meanwhile, have offered excellent returns this week, including the token erc20 HEX, known for being the initiator of certificates of deposit on the blockchain. It is currently trading at $0.22, with a weekly return of almost 100%.

THE GIANTS OF CRYPTO

If you browse the crypto news from time to time, you will often see a curious term: "whales". What are these mysterious entities that attract fascination in the crypto-currency ecosystem.

The term whale is used to refer to a person or organization that holds a huge amount of a certain crypto-currency, for Bitcoin for example, one can conjecture that a whale is an entity with more than 1000 BTC ($50M).

The largest known whale on Bitcoin to date has 178,000 BTC, or about $11.5B. Whales have the power to influence the markets by buying and selling their crypto-currencies.

In general, they tend to operate in dark pools or OTC trading, as the traditional order books of exchanges would not be able to handle the huge volumes they trade (imagine how empty the Binance order book would be if someone came to buy or sell 10,000 BTC at once).

However, you should keep in mind that whales are present in ALL crypto projects, not only in Bitcoin, or in the PoW consensus protocols. On the other hand, not all whales are bad actors, some are actually very beneficial to the health of projects. If you know the HEX project, there is a whale who has the majority of the supply (90%), but this wallet (Richard Heart in fact) can be seen as a central bank and limit the power of the other whales.

Whales are not a specificity of the crypto market, in the derivative market, for example, the BlackRock society manages approximately $9.5 trillion.

WHAT IS HALVING

In his initial paper founding the Bitcoin protocol, Satoshi Nakamoto determined that the number of Bitcoin issued in circulation would be finite: 21 million Bitcoin issued in total.

However, not all of them are in circulation, 90% of the total supply has been issued so far. New Bitcoins are coming into circulation through mining. Specific to Proof-of-Work, mining is the validation of blocks by agents (computers), who are then rewarded with a fixed supply of Bitcoin.

Initially, miners were rewarded with 50 BTC divided among them. In 2012, this offer was divided by 2, reducing the rewards from 50 to 25. In 2016, the offer was divided by 2 again, reducing the rewards to 12.5 BTC, and finally in 2020, the rewards decreased again to 6.25 BTC. The event behind the reduction of the offer is the halving.

This process was designed by Satoshi Nakamoto to be triggered every 210,000 blocks. We can see immediately that its purpose is to decrease the supply, thus exerting an upward pressure on the price (if the demand remains fixed or even better increases).

The latest example is the 2020 halving, after which Bitcoin soared from $4,000 to a maximum peak of $69,000.

The next halving will take place in 2024, and the last Bitcoin should be mined around 2140.