InstaForex

August 16, 2021

Argentina can legalize bitcoin and issue its own digital currency

 Bitcoin resumed growth during the end of last week and again worked out the level of $47,500, which is currently a very important level. At the moment, bitcoin has not managed to overcome this mark, so there is a possibility of a downward reversal and a fall at least to the level of $43,852 and an ascending trend line, which continues to keep the mood of traders "bullish". We still expect a new fall in the bitcoin exchange rate, because we do not see any significant reasons for an increase of more than $18,000 in recent weeks. As we said earlier, bitcoin grew almost out of the blue and it seems that the main reason for this growth was the rush of American investors to buy as many coins as possible until the US tightened the legislation that regulates the circulation and taxation of cryptocurrencies. We don't see any other reasons. However, we also remind you that whatever the fundamental background is, bitcoin can grow without it, because, probably, the most significant factor for it is the faith or lack thereof among market participants. Simply put, bitcoin remains an investment tool, and most of the market participants do not buy it to use it as payment for pizza or Tesla electric cars. Thus, if the markets again believe that bitcoin can grow to $100,000 or more, then the bullish trend will continue.


Meanwhile, in Argentina, where there has been a problem of high inflation for many years, they said that they could legalize bitcoin. According to the president of the country, Alberto Fernandez, bitcoin can help the Argentine economy cope with the problem regarding inflation that has amounted to 80% over the past year and a half. Also, the president of Argentina did not rule out the possibility of creating his own digital currency, the digital peso. Fernandez said that he has no reason to hinder the development of the cryptocurrency sphere. "The advantage is that the inflationary effect is largely nullified," the president of Argentina said. At the same time, Fernandez noted that he personally does not yet know too much about cryptocurrencies and approaches this tool with caution. It should be noted that the opinion of the head of the Central Bank of Argentina, Miguel Pesce, is radically different from the opinion of the president. Recently, an official said that cryptocurrencies are not a financial asset, since they do not have their own value, and can also be very harmful to the state's economy.


Technically, bitcoin continues to move upward on the 4-hour timeframe, it reached the level of $47,500 for the second time. This level is important because it is the minimum of April 26, as well as 50% of the movement from the absolute maximum of the value to the minimum of 2021. At the moment, bitcoin cannot overcome this level, so again there are expectations of a new drop in quotes to the level of $29,700, which we are counting on. However, the ascending trend line remains relevant, so we remind you that whatever the fundamental background, if there is a clear technical trend for the instrument, then you need to trade according to it.