Tuesday was an unexpected day as the market took sudden drops when only a small, healthy pullback was expected after a very positive 30 days. The bullish sentiment had increased after the Labor Day weekend in the United States and when it was officially recognized as legal tender in El Salvador, but the celebration quickly died out with the correction of 16% of the. Other major altcoins joined the sale with price drops ranging from 15-20%. In addition, many leveraged positions were liquidated, further amplifying the price movement. Despite the drop, the market remains bullish on a longer time frame and in the next few days we will see if the market has bottomed out in these ranges.
In a completely unexpected turn of events and in a matter of minutes, the price of Bitcoin fell from more than € 44,800 to less than € 37,000 in a sell-off. This caused major changes in the derivatives markets, with more than 3,200 million euros being settled, according to market statistics. These developments have been seen more frequently in recent months as more and more investors appear to have been resorting to excessive leverage in their portfolios.
From a technical point of view, Bitcoin briefly fell below the 200-day moving average on the daily chart and found support just above the € 37,400 level. it followed Bitcoin and fell from the € 3,400 level to below € 2,600, but remained above the support level of the 200-day moving average. The selloff hurt the lower time frame chart a bit, but remains the same on the upper time frame where market sentiment is still bullish. It is worth mentioning that the market often recovers very quickly after such events, as we saw in March and May.
Bitcoin is already legal tender in El Salvador
Bitcoin is now officially legal tender in El Salvador, three months after the country’s legislation passed the Bitcoin Law on June 9 by a considerable majority, with 62 members voting in favor of the project, while 19 opposed. and three did not vote. The cryptocurrency officially became legal tender on Tuesday, when the law went into effect. This means that Bitcoin is now a payment currency equal to the US dollar in the country, which has been in circulation in El Salvador since 2001. Goods, services, and even taxes can now be paid for with BTC. Every economic agent or service must accept the use of Bitcoin as a legal form of payment. A day before the law came into force, El Salvador bought its first 200 BTC and acquired 150 more BTC after the recent drop in its price.
Litecoin introduced OmniLite, a second layer protocol that would allow the creation of stablecoins and smart contracts on its blockchain. The launch would also allow the creation of non-fungible tokens (NFTs). OmniLite is based on the previous Omni protocol, which acted as a secondary layer in the Bitcoin blockchain. The price of Litecoin skyrocketed after the announcement, but fell back during the recent market crash. The price shot up to almost € 200 before the crash. At the time of writing, LTC has hit a support line at € 140 and is trying to stabilize around € 150.
IOTA made its Hornet update
The price of IOTA spiked more than 100% in the first 3 days of September to reach an intraday high of € 1.72, before falling back around € 1. The price is now trying to find support around € 1.25, which is still 50% higher than at the end of August. The increased interest in the project comes after the protocol integrated the Hornet update and other enhancements that streamline and improve execution processes. The network is also developing the proposed update alongside a new wallet option known as Firefly.
A very important Sunday for Cardano
The altcoin space has only gone one way with ADA as one of the best performing assets. Cardano’s “Alonzo” update and the arrival of smart contracts on the grid are just around the corner, which is driving the price higher. According to Cardano, on Sunday, September 12, the main network update occurs to enable smart contracts. IOHK, the developers behind Cardano, officially submitted an upgrade proposal to the Cardano mainnet to trigger a hard fork combinatorial event. Once the proposal is submitted, any ADA token holder can vote to accept or reject it. As for ADA, the price of the native Cardano token reached its all-time high of € 2.6.