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El Salvador accepting bitcoin as legal tender was one of the historic moments for Bitcoin. It turned into a Bitcoin bloodbath as BTC fell by $10000 per coin. Does this mean that it was just a “buy the rumor, sell the news” event?
Yesterday, was a most important and historic day for Bitcoin. Bitcoin started its journey from being worthless then it was bootstrapped by the Dark web. The last two years have been crazy for BTC and it gave motivation to people under financial restriction. So, finally, Bitcoin is being adopted by the whole country as a national currency.
El Salvador government bought 400 BTC to divide among the people using the government’s Chivo wallet. The whole crypto community was hoping that such a big event will provide a boom to the price but instead, it turned into a Bitcoin bloodbath. The price of BTC fall by almost 20 % at a time when it was supposed to shine like a star.
The reason behind Bitcoin bloodbath:
We all have heard finance saying” Buy the rumor, sell the news”. The case of El Salvador adopting BTC wasn’t a rumor rather than a build-up of a historic debut. The profit-taking might have had an unintended effect of liquidating over-leveraged long traders, which caused a cascade effect of stop losses being hit and causing the price per BTC to tank more than $10,000 as a result.
source: Tradingview
El Salvador providing legal tender to BTC was a historic buildup of big debut. Big debuts have not been good for Bitcoin. For example, the debut of Coinbase Global on the stock market, Bakkt debut, and CME BTC Futures in 2017 all turned into a Bitcoin bloodbath.
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