Bitcoin stabilized at $ 46,400 after falling by more than 9%, which is one of its worst sell-offs since May.

It happened when El Salvador adopted the token as its official currency, becoming the first country to make Bitcoin (BTC) legal tender. Such was supposed to be a milestone for the crypto industry because it represents financial legitimacy, but it went wrong and was met with protest as the citizens fear that they will be forced to accept an extremely volatile currency.

Early signs have shown that people are not willing to exchange their dollars for bitcoins and on Tuesday, more than 1,000 people protested in San Salvador. One of their captions say Bitcoin will bring more corruption and poverty.

Part of the concern stems from the fact that bitcoin is not a stable currency, but a few other government-backed fiat currencies also lose 9% in 24 hours. Those who do this are in war-torn or poorly governed countries, many of which are "dollarized" like El Salvador.

As such, some crypto proponents see the adoption of Bitcoin by El Salvador as a turning point. Bitwise CIO Matt Hougan even said that before, there were no countries that thought of Bitcoin as legal tender. But now there is one and it seems that other points have not changed at all. Hougan added that the token is still in its "infancy" to become one of the main currencies, but looking over the past five years, this event can be considered as a turning point.

However, there is an immediate concern for investors, which is the leverage built into Bitcoin and other cryptocurrencies. Traders who buy bitcoin futures or use small amounts of collateral to get large bets may be forced to sell their positions or be automatically liquidated by exchanges as the price falls.

Bybt exchange reported that long positions worth $ 3.7 billion have been liquidated in the market over the past 24 hours, including $ 1.3 billion in Bitcoin and $ 928 million in Ethereum. This accounts to more than 150,000 traders.

Nevertheless, demand for bitcoin futures has been growing for several months, reaching nearly $ 20 billion in early September. It's still below the $ 28 billion peak in April 2021, but that's enough to trigger a cascading price movement.

None of this stops some bulls from predicting higher bitcoin prices. For example, analysts at Standard Chartered released a forecast on Tuesday, saying that its price will hit $ 100,000 in late 2021 or early 2022. Bank analysts also structurally value bitcoin around $ 50,000 - $ 175,000.

"As a medium of exchange, bitcoin may become the dominant peer-to-peer payment method for the global unbanked in a future cashless world," they said. In estimate, Bitcoin could value $ 120,000 in 2040, based on the slowdown in its supply compared to the growth of the M2 US dollar money supply. If institutional portfolio managers allocate only 2% of global portfolios to cryptocurrency, demand could push prices up to $ 175,000.

But of course, Bitcoin and other cryptocurrencies have no intrinsic value, so valuation models are uncertain. Analysts can only guess what the next move of cryptocurrencies will take. For the people of El Salvador, they can only hope that it will not fall again.