Oddly enough, Bitcoin has continued to grow in price over the past few days. The main cryptocurrency in the world overcame the level of $40,700, which we called the key one in recent weeks. This seemed to indirectly indicate the continuation of the upward movement. But at the same time, the fundamental background for bitcoin has not become better. The fact that bitcoin has risen in price by $10,000 is not too fair and reasonable. And this unfair growth should alert traders and investors. The fact is that "digital gold" has completed the bullish trend and never before has a new trend started in six months. Thus, we still believe that the downward movement will be resumed within the corrective scenario. First, the cryptocurrency will have to fall to the level of $29,700 and try to overcome it again, and then fall in price again. This is the most logical scenario for us. It is also worth recalling that in the past, when the next trend ended, the cryptocurrency could also quite calmly show growth during the consolidation period. Thus, nothing that could be interpreted as a resumption of the bullish trend has happened. The price only slightly exceeded the upper limit of the side channel of $29,700 - $40,700.
In the United States, the congress passed a $1 trillion infrastructure upgrade bill. And this bill will be financed, in particular, due to more stringent taxation of cryptocurrencies. The States are considering the possibility of tightening the regulation of the circulation of cryptocurrencies. In particular, there was information that data on any transaction over $10,000 would have to be transmitted to the Tax Administration by all agents of the cryptocurrency market. In particular, the bill explains that almost all legal entities of the industry and even miners fall under the concept of "broker". In other words, if you are dealing with bitcoin or other cryptocurrencies, you live in the United States, and your transactions amount to more than $10,000 at a time, then you should get ready to report on each such transaction and pay taxes. Naturally, many investors may not like this, but the law will not come into force right now, so all market players still have some time. However, the prospects for bitcoin are really getting worse day by day. First, it was kicked out of China, and now it seems that the repression has reached the United States. The government is going to stop the development of competitors to the "digital dollar", as well as collect up to $29 billion in taxes with the help of new legislation. Thus, experts expect that an outflow of miners and mining capacities will begin from the United States in the near future, and many companies in the industry will close. However, it is still possible that everything is not hopeless, since lawyers will demand certain amendments to the bill.
Technically, bitcoin has worked out the target level of $40,700 with a margin, and got to the $42,300 mark. However, Bitcoin rushed down last night. We have already noticed that bitcoin really likes to get cheaper on Monday nights. Anyway, we still expect a decline in the quotes of the main cryptocurrency to the level of $29,700. So far, the fundamental background remains clearly not on the side of bitcoin. Therefore, it is now possible to sell the cryptocurrency instrument.The material has been provided by InstaForex Company - www.instaforex.com