Market Analysis

Bitcoin, Ethereum Collapse on Biden Tax Plan

Key points of discussion:

  • The tax increase planned for Biden sees the unloading of profitable assets by investors
  • Bitcoin increases losses, falls below $ 50,000

President Biden’s proposed increase in capital gains seems to make investors nervous about digital coins, causing Bitcoin to fall below $ 50,000 for the first time since March, while other crypts like EOS, Stellar and Bitcoin’s cash will fall more than 13% this morning.

The rationale for this move is likely to be related to investors who want to unload the assets with the highest returns that would allow them to obtain a higher tax rate. All the more so as the IRS is now asking taxpayers to disclose all digital currency transactions in their tax returns, leading to a decline in the position of investors. It comes after the news that cryptocurrencies already have a higher capital gains tax if they hold assets for more than a year.

While this feeling is unlikely to last long and the proposal is likely to face some opposition, the initial market reaction will cause some damage in the cryptocurrency world, which has traded in one direction since last week’s Coinbase listing.

Bitcoin levels

Bitcoin struggled two weeks ago to hit a new all-time high, but less than $ 50,000 is likely to be a convincing sales factor in itself. This means that the recent moves are not unique to Bitcoin, as the previous two setbacks in 2021 fell between 17% and 26%.

The current price is a 100-day moving average (49,280), which seems to provide short-term support. Momentum figures show oversold conditions, so the ability to re-buyers into the market, 45,965 area seems a good entry point.

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BTC /USD Everyday diagram

The collapse of Bitcoin, Ethereum in Biden's tax plan

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Ethereum, which is at its highest level against Bitcoin in almost three years, performed relatively well in recent sessions compared to other cryptocurrencies, marking yesterday ‘s session at 2644 new all – time highs. But sellers have taken control this morning and the coin will fall about 10% toward the $ 2,000 mark where it can find buyer support.

Ethereum / Bitcoin weekly schedule

The collapse of Bitcoin, Ethereum in Biden's tax plan

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– Written by market analyst Daniela Sabin Hathorn

Follow Daniela on Twitter @HathornSabin

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