As Bitcoin continues to stay muted this week, regulators all over the world are fashioning ways to deal with crypto trading and bring it under effective regulation. Some have decided not to outlaw Bitcoin trading and instead, have seen it as a tool to improve government revenues. The latest comes out of South Africa where it appears that the South African Revenue Service (SARS) has introduced a cryptocurrency tax.
SARS, which is the tax administration agency in that country and the equivalent of the UK’s Her Majesty’s Revenue and Customs (HMRC), has indicated that all digital assets are taxable and this also applies to cryptocurrency assets such as Bitcoin. Consequently, all South African taxpayers who are engaged in Bitcoin trading as well as trading of other cryptocurrencies will be expected to start declaring any profits and losses from crypto trading activity. SARS has also warned that non-compliance will attract penalties and interest.
South African Bitcoin traders will not only have to worry about paying taxes on their trading activities, but will also find Bitcoin’s struggle for bullish momentum a bit worrying. In Tuesday’s trading session, Bitcoin has remained confined below $7,300 in its pairing with the US Dollar. BTCUSD is presently trading at 7,259 as it continues to oscillate in a tight range, within the confines of a non-descript bearish pennant. This bearish pennant is better visualized on the daily chart.
A look at the weekly chart for BTCUSD shows that the price candles of last week and this week presently display an inside candle formation, which is resting comfortably on the key support level formed by the 23.6% Fibonacci retracement line. The retracement levels traced from the swing high of November 2017 to the swing lows of December 2018 continue to provide the long-term support and resistance levels for price action on the BTCUSD pair.
Bitcoin is technically speaking, in a downtrend and the recent slump follows the trend continuation after the rally from March 2019 to October 2019. A break below the 23.6% Fibonacci price level continues the downtrend push and this could target the 5793 price level, which corresponds to a cluster of previous weekly lows that extended from August to October 2018. Along the way, expect some short-term pitstops at 6464 and 6150.
On the flip side, a recovery bounce targets the 38.2% Fibonacci price level of 9430. However, short-term resistance can be expected at 7077, 8289 and 8840.More content