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BTCUSD Stays Above $7,300 As Regulators Ramp Up Crypto Taxation

Bitcoin price BTCUSD
Bitcoin – BTCUSD

Bitcoin Continues to trade above $7,300 in muted trading. The pair had inched up to 7,500 on Monday, but the attempts to force prices to the north failed once more, causing the pair to dip down towards 7,300.

Much of the attention on Bitcoin has shifted towards tax authorities across the world. Ad regulators of the banking and financial sectors in various countries seem to be having a hard time reigning in on crypto trading, some governments have simply decided that increasing revenue from crypto trading instead of trying to control it, seems to be a better option.

Only recently, Her Majesty’s Revenue and Customs (HMRC) updated its guidelines on crypto taxation for individuals and businesses. The US Internal Revenue Services (IRS) seems to be taking a more serious look at those who are using cryptos to evade taxes, and the South African Revenue Service has also issued new taxation guidelines that have introduced taxes on cryptocurrency trading. The Ministry of Economy and Finance in South Korea is also pushing for a capital gains tax on crypto trading, with 2020 looking set to be the year that taxes on digital currencies could be introduced, according to a report by the Korea Times.

What Do Crypto Taxes Mean for Bitcoin Prices?

It is paradoxical for any government to put a tax on something it considers illegal. My view is that the recent taxation regimes being put in place for cryptocurrency trading are a form of discreet approval and acceptance of Bitcoin and other cryptocurrencies by governments. However, it is still necessary for governments to produce policy guidelines on crypto assets so as to encourage widespread adoption and participation in the crypto markets. Perhaps 2020 could be the year that we start to see some of this being done so that market participants can have clarity on what their crypto trading activity means in terms of what they can retain as gains and what they are liable to pay as tax.

Technical Outlook for BTCUSD

I bring attention to the daily chart, where recent price action seems to be forming a symmetrical triangle. This triangle is deemed to be a continuation pattern. With Bitcoin still in the resumption phase of its long-term downtrend, it is possible that this triangle may be a consolidation before a renewed push to the south occurs.

Given the presence of technical levels of support/resistance that are very close to the borders of the triangle, a break of the lower border of the triangle will immediately target the 23.6% Fibonacci retracement level of 6873. There must be a definitive close below this price level for price to target the downside targets at 6127 and the support zone that starts from 5400 up to 5750.

On the flip side, a break of the triangle to the upside negates the pattern and targets the immediate resistance zone of 7500 to 7700. Further upside momentum will then approach the next resistance at 8843 and possibly 9430 (where the 38.2% Fibonacci price level is found).