Bitcoin’s Spot Price Treads Water Despite Massive Argentina Premium
Bitcoin’s price was little changed on major exchanges Tuesday, as technical traders continued to eye movements in and around the $10K mark.
Meanwhile, in Argentina, bitcoin’s premium skyrocketed to $2,250 after the government imposed strict capital controls amid the debt crisis.
The bitcoin price traded within a narrower range on Tuesday, fluctuating between $10,186 and $10,390 on Bitstamp. At the time of writing, the BTC/USD exchange rate was down 0.7% to $10,221.
Bitcoin is once again testing the 30-day exponential moving average (EMA), a level that provided key support throughout the 2019 bull rally. Momentum has softened since the week began, with the relative strength index (RSI) swinging back below 50.
The RSI tumbled below 40 last month before another recovery attempted kicked in, dragging bitcoin back toward $11,000. The rally stopped just short of that key level.
At current values, bitcoin has a total market capitalization of $184.3 billion, accounting for 69.7% of the overall cryptocurrency pie. The broader cryptocurrency market was little changed on Tuesday.
Trading volumes remain subdued, a sign that the consolidation trend will continue. In the last 24 hours, verified spot exchanges processed more than $700 million worth of bitcoin trades, according to Bitwise.
Argentina Premium Skyrockets
As bitcoin’s trading range continued to narrow on global exchanges, its premium skyrocketed in Argentina, a country battling a new debt crisis.
According to Cryptoslate, bitcoin’s premium in the Latin American country hit $2,250 after President Mauricio Macri said he would reinstate controls on foreign currency purchases. The Buenos Aires-based Buenbit exchange printed a high price of $12,750 per bitcoin, which is well above the normal premium of around $1,200.
Macri’s administration is trying to reschedule the country’s long-term debt after rating agencies said Argentina had defaulted on its short-term bonds. As the Financial Times reported, Argentina’s central bank is working to shore up foreign reserves after the government failed to attract new investors to buy its bonds.
Although default is nothing new to Argentina, citizens have more options this time around to safeguard against further currency depreciation and capital controls. For some, bitcoin has become a form of ‘digital gold’ that can help investors protect their wealth against the very conditions present in Argentina today. If that’s the case, bitcoin’s premium in the Latin American country could remain elevated for some time.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock. Chart via TradingView.