Bitcoin Dives As IRS Moves to Block Crypto Tax Evasion

It has been a bloody Monday as Bitcoin (BTCUSD) and other major cryptocurrencies are all in the red. This follows the news of the collaboration between the US Internal Revenue Service (IRS) and other tax agencies in the UK, Canada, Netherlands and Australia to block evasion of taxes on cryptocurrencies.

The task force to be known as the Joint Chiefs of Global Tax Enforcement or J5 for short, will share information as to the cryptocurrency traders from each of these countries who are evading the payment of tax on profits from cryptocurrency trades. The countries mentioned above have classified cryptocurrencies as assets, leaving them subject to taxation.

The IRS will also specifically look at those who are channeling payments into cryptocurrencies so as to use this avenue to avoid paying due taxes.

Ryan Korner, a senior agent with the LA office of the IRS’s Criminal Investigations office recently indicated to reporters that the agency now has the tools to track the movements of such money and is now in a position to identify and track such tax evasion attempts.

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Technical Outlook on BTCUSD

Bitcoin has hit support at 8700. This support price corresponds to the low of the weekly candle that ended November 3, as well as previous price highs of the weekly candles of October 6 and October 20. The last three weekly candles are on the way to forming the three black soldiers candle formation. At the moment, the 3rd candle is still active and so it is too early to determine how it will end up.

If price is able to close below 8700, then BTCUSD may push lower to target the next long term support at 7707. If the 8700 support is able to hold, BTCUSD may be able to find some upside momentum to retest the 38.2% Fibonacci level at just under 9400.More content