El Salvador Holds 7,677 BTC at 5-Year Mark as Charts Warn of $50K Bitcoin Drop

Bitcoin News

Five years after El Salvador's Congress approved the world's first Bitcoin Law in a 62-22 vote on June 8, 2021, the Central American nation continues to expand its treasury. Government records show the country now holds 7,677 BTC, valued at roughly $480 million, and remains an active buyer. Since President Nayib Bukele launched a one-coin-per-day accumulation policy in November 2022, the state has steadily averaged into its position. Over the twelve months through June 2026, El Salvador added more than 1,600 BTC, including a tactical purchase exceeding 1,000 coins during a single week of November market weakness.

That conviction has held through a significant policy retreat. In January 2025, Bukele's administration removed Bitcoin's mandatory legal tender status as a condition of a $1.4 billion International Monetary Fund loan package. Merchants are no longer obligated to accept the asset, and the government-issued Chivo wallet that anchored the original rollout is being wound down. Despite the reversal, authorities have not sold a single coin from the national stack, and Bitcoin remains usable as currency for those who choose it. At the start of 2026, the country's Bitcoin Office declared it was going all in on both Bitcoin and artificial intelligence.

El Salvador continues to position itself as a magnet for digital-asset capital. The government imposes no capital gains tax on Bitcoin or cryptocurrency transactions, a stance it reinforced in early 2026 to court foreign investors. Officials are also advancing plans for a Bitcoin-backed Volcano Bond and a proposed Bitcoin City powered by geothermal energy. The remittance use case that Bukele leaned on to sell the law, however, has yet to scale. Personal transfers from abroad equal roughly 24 percent of GDP, among the highest globally, with first-quarter 2026 inflows reaching $2.43 billion, still dominated by traditional channels rather than crypto rails.

Market technicians, meanwhile, warn that a deeper correction may still be ahead. Buyers defended the $60,000 psychological level during last week's 13 percent drawdown, but several valuation models keep a $50,000 target firmly in play. The Bitcoin production-cost model places the average mining cost near $62,650, meaning miners are roughly breaking even at current prices. That zone has historically marked long-term value during prior corrections. A decisive break below it would expose the lower electrical-cost estimate around $50,120, a level that has previously absorbed heavy selling pressure when sentiment deteriorates.

Additional on-chain metrics reinforce the cautious outlook. MVRV valuation bands show Bitcoin trading beneath its lower zone, with the next deep-value magnet sitting near $50,437. The realized price, or the aggregate cost basis of all holders, currently rests around $53,600. That figure carries weight because Bitcoin has rarely confirmed a major cycle bottom in past bear market phases without first dipping below realized price. The clustering of these signals near the $50,000 region suggests that, should support fail, a swift move toward five figures could attract long-term accumulators who view such drops as generational entry points.

Historical precedent underscores how far drawdowns can extend. In prior cycles, Bitcoin fell roughly 58 percent below realized price in 2011, 49 percent in 2015, 47 percent in 2018, and 34 percent in 2022, with each successive trough growing shallower. Macro headwinds are compounding the technical caution: escalating US-Iran tensions and fading expectations for near-term interest-rate cuts are draining appetite for risk assets. Traders note that thinning liquidity heading into summer could amplify volatility in either direction, leaving the asset vulnerable to sharp swings as conflicting fundamental and on-chain narratives compete for control of price.

Bitcoin trades near $61,385, down close to 4 percent on the day, with momentum firmly in a downtrend. The RSI at 23.86 sits deep in oversold territory, hinting at a possible relief bounce, yet the bearish MACD signal confirms sellers retain control. Immediate support clusters at $61,056, followed by $59,100 and a critical $52,679 shelf. On the upside, reclaiming $62,890 is the first hurdle, with $64,728 and $68,191 as stretch targets. A daily candlestick close below $59,100 would validate the $50K thesis, while a sustained bullish reclaim above $64,728 would invalidate the bearish structure.