By Samuel Indyk
Investing.com – The price of Bitcoin briefly broke above $35,000 in the early hours of Friday morning before paring back slightly as traders continue to question whether the next move in cryptocurrencies will be up or down.
News from the Americas
Supporting prices was news that El Salvador’s Bitcoin Law would become effective from 7th September, meaning will become legal tender in the country from that date.
Reports in the country suggested that the government would use the Chivo e-wallet and all citizens who download the app would receive $30 worth of Bitcoin ice their identity had been verified.
Separately, a member of Paraguay’s parliament has also proposed a bill to make the cryptocurrency legal tender in the South American country. Whether the bill will gain any traction among members of parliament is yet to be seen but the reading is likely to occur on 14th July, potentially making Paraguay the second nation to adopt Bitcoin as legal tender.
JPMorgan (NYSE:) note – Bitcoin fair value $23,000?
On the other hand, a recent research note from JPMorgan suggested that the medium-term fair value for Bitcoin was between $23,000 and $35,000.
The team of analysts, led by Nikolaos Panigirtzoglou, said the anticipated selling of shares in the Grayscale Bitcoin Trust (OTC:) between June and July will likely be a headwind for Bitcoin, as a six-month lock-up period expires.
“Despite this week’s correction we are reluctant to abandon our negative outlook for Bitcoin and crypto markets more generally,” JPMorgan analysts said. “Despite some improvement, our signals remain overall bearish.”
Support levels come in at $32,500 and the key psychological $30,000 level which was briefly breached earlier in the week before a rebound to the current price. If a sustained break below $30,000 is maintained then the door is opened towards $25,000.
On the upside, a sustained break above $35,000 could see $40,000 come back into play before the 50DMA moving average at $40,100.
As a reminder, the 50DMA crossed below the 200DMA earlier this week, forming what is known as a ‘Death cross’ which is typically seen as a bearish signal. The 200DMA is currently around $43,400.
At 10:52BST, Bitcoin was trading around $33,900, up around 1,7% in the last 24 hours.
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