We have repeatedly said that the last round of bitcoin's growth looks unreasonable. The cryptocurrency has grown by almost $21,000 in total over the past few weeks, despite the fact that there were no good reasons and fundamental factors for this. We also said that perhaps this strengthening of bitcoin is due to a certain rush of traders and investors. In the United States, an "infrastructure package" worth $3.5 trillion may be adopted in the coming months, and US lawmakers assign one of the sources of financing for infrastructure investments to the cryptocurrency segment. Simply put, tax rates will be introduced for many market participants. This will especially apply to transactions over $10,000. Since bitcoin currently costs about $50,000 per coin, it is easy to guess that the absolute majority of transactions will be over $10,000. Thus, many investors and traders may not like the fact that their operations will immediately come to the attention of the Tax Administration, and they will have to pay tax on transactions. That is why in recent months, bitcoin has been bought by everyone in a row. However, yesterday it became known that the US Treasury Department is not going to interpret the concept of "broker" to all participants of the cryptocurrency industry. This, firstly, means that miners or developers will not have to provide any reporting. Secondly, it means that the tax legislation will not be as tough as it was originally thought. Of course, taxes will still be collected from transactions, but many players of the cryptocurrency market will be exempted from them. In general, at this point, bitcoin clearly should have felt relieved, however, it hadn't felt any tension in the last few weeks. On the contrary, it has been actively growing in price and now, the markets may begin to get rid of bitcoin. This often happens when an asset grows due to certain expectations or fears, and then, when these expectations are met and the asset can continue moving in the same direction, a reverse reaction begins. In general, we still believe that Bitcoin will tend to fall. There is still an ascending trend line on the 4-hour timeframe, which will help determine when the current bullish trend will come to an end. At the moment, the bitcoin course is located very close to it.
Technically, bitcoin continues to be in an upward trend on the 4-hour timeframe, but for the second time it has returned to the level of $47,500 and to the trend line. Thus, in the next hour or two, these obstacles can be overcome, which will allow us to expect a further drop in bitcoin with the first target of $43,852. In the case of another rebound from $47,500, bitcoin may try to make another round of upward movement, but even from a purely technical point of view, a downward correction is already overdue.The material has been provided by InstaForex Company - www.instaforex.com