El Salvador buys Bitcoin dip, accumulating an additional $25 million BTC

El Salvador’s president, Nayib Bukele, announced that the country’s government bought an additional 420 Bitcoin, accumulating around $25 million more BTC. The country passed legislation earlier this year, allowing the leading cryptocurrency to become legal tender.

El Salvador increases Bitcoin reserve

The president of El Salvador took advantage of the recent dip in the flagship cryptocurrency’s price, increasing the country’s Bitcoin reserves. The bellwether digital asset rose to an all-time high at $67,000 last week but dropped toward $58,000 on October 27. 

Bitcoin was adopted as legal tender on September 7. President Bukele has made four purchases of the leading cryptocurrency so far, with the total amount bought to date at 1,120 BTC.

The latest purchase comes after more than a month since the last acquisition of 150 BTC. The country’s previous purchases of Bitcoin were at prices at or lower than $52,000. El Salvador stated that its reserve of 1,120 BTC was purchased at an average price of $53,327.29.

Bukele has proclaimed that BItcoin would enable the cost of remittances to be lower for Salvadoran migrants living overseas to send money back to the country. The Latin American country’s economy heavily relies on $6 billion in remittances sent home each year. Traditional financial institutions typically charge hefty fees for money transfers.

Bitcoin price faces minor correction

Bitcoin price is currently trending lower, as it moves within a descending parallel channel pattern on the 12-hour chart. BTC is holding onto the nearest support at the 50 twelve-hour Simple Moving Average (SMA) at $58,092.

The Arms Index (TRIN), which gauges overall market sentiment, is flashing a reading of 1.70, suggesting that there are significantly more sellers than buyers in the market. This indicates that investors could be engaging in a period of profit-taking. 

If selling pressure continues to increase, Bitcoin price could fall lower toward the 23.6% Fibonacci retracement level at $56,942, which coincides with the lower boundary of the governing technical pattern. 

BTC/USDT 12-hour chart

Further losses could be on the radar if Bitcoin price fails to escape the downtrend by slicing above the resistance at the 38.2% Fibonacci retracement level at $58,867.

Additional obstacles may emerge at the middle boundary of the chart pattern at $59,264, then at the 50% Fibonacci retracement level at $60,424, then at the 78.6% Fibonacci retracement level at $61,981, which corresponds to the 21 twelve-hour SMA.