The new tax proposals that Joe Biden announced took many by surprise. Having to pay such a high amount of one’s profits to the government defeats the idea of investing in crypto. Biden proposed a tax rate of around 39%, which amounts to 43% after some added options. They have also announced a proposal for an increase in the income tax rate. And due to this huge announcement, Bitcoin crashes again while fear and panic rule over investors. However, the good thing is that the market has recovered again, and we are back strong to continue the bull run. HODL tight!
Bitcoin crashes but recovers again!
Bitcoin had one of the worst weeks in a long time. And yes, after many weeks, it plunged back under the $50k price point. As the news of the tax proposal surfaced, Bitcoin crashed as if there was no future. But after making a low of $47,525, bulls took back control and were able to take it above the key level of $50k slowly. As of writing the article, Bitcoin is trading at $50,600, and it seems recovery is in action. Though many warned of the big losses that could be ahead for Bitcoin, it is likely that the danger has passed.
This was one of the worst weeks of Bitcoin since march, and there have been more than 20% losses. Bitcoin also moved below its 50-day moving average after the dip and presented us with one of the biggest buying opportunities in months. Even though some coins like ETH disrupted the bear trend, they too succumbed to the tax proposal news.
The cryptocurrency has now started to get back on its feet as the technicals slowly start to go bullish. Chart analysis shows that Bitcoin’s movement is not linear every time it makes a higher high and consolidates to a lower low, and that’s how the cycle works. In that case, unless we fall below the $44k price point, which is also critical as support, there is a good chance for a bullish rally ahead.
What’s next for Bitcoin?
As the losses continue to recover, we can expect that the price of Bitcoin will slowly move towards a new high again. Do note that $52,000 is a key support level for the coin; if it’s able to move past it and maintain its ground, then the bull rally will continue strongly. But if the proposal of the new taxes becomes a reality, there could be a very difficult time ahead for Bitcoin. Though, it is very unlikely that Joe Biden will get the support of the democrats and the republicans on this.
What are your thoughts on the recent tax proposal of Joe Biden? And what kind of impact do you think it will have on BTC in the long run? Let us know in the comments below. Also, if you found our content informative, do like it and share it with your friends.