El Salvador, the first country to accept Bitcoin as legal tender, has steadily accumulated 1 BTC daily since mid-March.
A cold wallet controlled by the Salvadoran government now holds 5,800 BTC, valued at more than $540 million at the current prices.
Despite broader market volatility, the country has been buying Bitcoin consistently for the past three months.
The king of cryptocurrencies hit an all-time high of $73,000 in March when the Salvadoran President, Nayib Bukele, transferred the country’s Bitcoin holdings to the cold wallet. Bitcoin has since shed around 20% of its value.
BTC is down 3.2% in the last 24 hours to trade at $58,923 at 01:36 a.m. EST.
El Salvador Bitcoin Bet
El Salvador has been constantly buying Bitcoin as part of a strategy by President Bukele. The President initially announced plans to buy one BTC daily in November 2022. He later made the cold wallet used to make these purchases public earlier this year.
The Bitcoin purchases came after El Salvador became the first country to pass a Bitcoin law allowing the use of this digital asset as legal tender.
Besides buying, the country is also involved in Bitcoin mining activities that rely on the geothermal power from the Tecapa volcano.
The country has also been promoting Bitcoin education in schools for several years. According to reports, some issues students are now learning about include application-specific integrated circuits (ASICs) used in Bitcoin mining activities.
Nevertheless, despite the strides made by Bukele and the Salvadoran government to achieve economic freedom through Bitcoin, several global institutions have voiced concerns.
The International Monetary Fund (IMF) has issued several warnings against the continued use of Bitcoin in the country, given the volatile price of the coin.
Bitcoin Drops To A Two-Month Low
On July 4, Bitcoin dropped briefly below $58K, marking the lowest price in two months. The recent price dip comes amid concerns that the Mt.Gox Rehabilitation Trust will start reimbursements this month. These reimbursements are expected to increase Bitcoin’s selling pressure.
The recent price drop has seen more than $230 million worth of longs liquidated in the last 24 hours, according to data from Coinglass.
According to one analyst on X, the liquidations are smaller than expected. Therefore, the dip might not yet be over, or a price uptrend could be around the corner, which could obliterate shorts.
A similar take was also shared by Santiment, who said that the market appears to be taking the recent drop as an opportunity to buy the dip.
Bitcoin’s Relative Strength Index (RSI) at 34 is leaning toward the oversold region. This trend indicates that Bitcoin is witnessing high selling pressure. However, a rebound could happen if buyers take advantage of the low prices.
Nevertheless, the overall market sentiment is still in a state of fear. This could affect the willingness of buyers to take advantage of the dip. The Bitcoin Fear & Greed Index at 42 shows that the market is in a state of fear.
