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Bitcoin Immediately Rejected After Retaking $40,000 Level

While the long-term trend is likely bearish, the short-term trend remains bullish as long as Bitcoin is trading above $36,717.   Hidden Divergence Causes Bitcoin Pump BTC has been moving upwards since reaching a local low of $30,402 on Jan. 11. It created a long lower wick just above the 0.382 Fib retracement level of … Continued

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Bitcoin (BTC) reached a high of $40,112 on Jan. 14 but was rejected immediately after and has been decreasing since.

While the long-term trend is likely bearish, the short-term trend remains bullish as long as Bitcoin is trading above $36,717.

 

Hidden Divergence Causes Bitcoin Pump

BTC has been moving upwards since reaching a local low of $30,402 on Jan. 11. It created a long lower wick just above the 0.382 Fib retracement level of the most recent upward movement.

BTC increased to $40,112 on Jan. 14 before getting rejected.

Technical indicators in the daily time-frame are bearish. While the RSI has generated a significant hidden bullish divergence, a price increase has already occurred as a result.

The MACD is moving downward and the Stochastic oscillator has made a bearish cross. These are both strong signals that the trend is bearish.

BTC Daily
BTC Chart By TradingView

Future Movement

The six-hour chart shows that BTC has been rejected at the 0.786 Fib retracement level, which previously acted as support. Therefore, the $39,463 area is now confirmed as resistance.

Despite the rejection, technical indicators are still bullish and there is an ascending support line currently at $34,000. This means that it’s possible that the short-term trend is still bullish.

BTC REtracement
BTC Chart By TradingView

The two-hour chart shows that BTC is following another, shorter-term ascending support line. This line is currently just below the $37,143 support area, which is the 0.382 Fib retracement of the most recent upward movement.

As long as BTC is trading above this support area/line, the short-term trend is still considered bullish.

BTC Short-Term chart
BTC Chart By TradingView

BTC Wave Count

The wave count shows that BTC has possibly completed an A-B-C corrective structure.

Yesterday, BTC was rejected by the resistance line of a parallel ascending channel, which suggests that the movement is corrective.

BTC Channel
BTC Chart By TradingView

While the A-B-C correction looks completed, it’s still possible that wave 5 will extend.

Therefore, until BTC falls below the $36,717 sub-wave 4 low (shown with the red line), it’s possible that the upward move will continue. It could potentially reach a high of 42,603, which would give waves A:C a 1:1.61 ratio.

BTC Waves
BTC Chart By TradingView

While it’s possible that the BTC trend is in wave 4, it doesn’t fit with the longer-term count.

Furthermore, the invalidation level would be the same. So, for the time being, it doesn’t seem worth it to track this count.

BTC Alternate
BTC Chart By TradingView

Conclusion

While Bitcoin seems to be nearing the top of its corrective movement, the short-term trend is considered bullish as long as BTC is trading above $36,717.

For BeInCrypto’s previous Bitcoin (BTC) analysis, click here!

Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.

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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo.
In 2019, he decided to focus full-time on cryptocurrencies and trading.

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Source: https://beincrypto.com/bitcoin-immediately-rejected-after-retaking-40000/

Blockchain

Grayscale eyes alts such as Cardano, Aave, Chainlink for new investment products

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Over the last few months, Grayscale Investments has become one of the most important participants in the cryptocurrency market. Now, in light of the growing competition in the field and the success of its existing products, the asset manager is eyeing new ones to bring to its clients.

To keep up with the expanding market, Grayscale Investments has announced that it is looking into at least 23 different digital assets for “potential new product offerings.” According to the same, the firm is looking at altcoins such as AAVE, BAT, Cardano [BAT], Chainlink [LINK], EOS, Cosmos [ATOM], MakerDAO [MKR], Polkadot [DOT], Tezos [XTZ], Synthetix [SNX], and Yearn.Finance [YFI], among others.

Here, it’s worth noting that the present development came a month after it was reported that Grayscale had filed to register new trusts for a set of digital assets (Including Cardano, Aave, and Polkadot) in the state of Delaware, USA.

The timing of the said announcement is interesting, especially since Grayscale’s consideration of new altcoins corresponds to the market-wide price rally coming to a halt. Bitcoin’s value fell under the $50k-level recently, with BTC trading at around $47,000, at press time.

Similarly, the market’s correlated alts were also witnessing a similar drawdown in value. And yet, much of the altcoin market has been showing strength, despite some sell-offs, due to which Grayscale has taken the step to consider turning some of the aforementioned assets into one of its investment products.

According to CEO Michael Sonnenshein,

“…as a firm that has been on the vanguard of connecting the legacy financial system with the new, digital currency-driven financial system, we view it as our responsibility to introduce investors to more diversity in this space.”

Meanwhile, with the value of BTC dropping in the spot market, the Grayscale BTC fund is seeing sell-offs too since many investors have chosen the way out. According to data, Grayscale Bitcoin trust dropped by 21% this week, a figure much higher than BTC’s 16% drop in the market. For GBTC, the once-massive premium has also fallen, suggesting that investors are choosing to exit the market since it has come to a halt. At the time of writing, the firm held over 655,750 BTC equivalent to $31 billion.

Such a shift in strategy can help Grayscale expand its hold on the altcoin market.


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Source: https://ambcrypto.com/grayscale-eyes-alts-such-as-cardano-aave-chainlink-for-new-investment-products

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Blockchain

Crypto can be lucrative, but make sure you’re ready for the taxman

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Hindsight is 20/20, but when money is on the line, being prepared can give investors better foresight. Just over a year and a half ago, Investopedia reported on the panic among many crypto investors who’d found themselves on the wrong side of the taxman. The article read, “Online forums like Reddit are abuzz with posts citing possible scenarios by worried investors about pending tax liabilities for their past dealings in cryptocoins, which may now leave them poorer.”

As Bitcoin’s (BTC) price soars and investors flock to crypto to cash in, legislators and regulators around the world are taking notice. Most recently, the Organisation for Economic Co-operation and Development announced a plan to release a ubiquitous tax standard for its member states, partly intended to curb base erosion and profit shifting. Although announcements like these serve as positive signs of intergovernmental collaboration, economic unity and progress, to the average investor, they feel rather distant. Yet it is crucial for investors in the United States to understand the digital asset tax regulations because, in some cases, it may mean the difference between prosperity and five years in prison with fines up to $250,000.

Related: Parents, it’s time for ‘the talk’: Did your kid trade crypto in 2020?

A handful of libertarian, crypto torchbearers might be inclined to believe that the built-in anonymity privileges of blockchain may save them from government scrutiny, but after all, the Internal Revenue Service isn’t quick to let go of these matters.

The U.S. tax code and crypto

Digital currencies and tokenized assets tend to be a mixed bag under the U.S. tax code. Many investors think of Bitcoin as a digital currency, like fiat currencies used regularly by consumers to buy goods. However, under the U.S. tax code, Bitcoin is actually considered “property” and is taxed under capital gains tax when either sold or used to purchase items or transferred for other digital currencies, such as trading Bitcoin for Ether (ETH). For example, purchasing a house with Bitcoin in the U.S. would trigger a taxable event on capital gains, and the exchange of Bitcoin for any other type of asset is considered a sale in the same way you might sell security like a stock.

Related: Crypto taxes, reporting and tax audits in 2021

It’s difficult to pinpoint why Bitcoin is classified differently from fiat currencies, but precedent in how Bitcoin is utilized by investors may tell us the answer. The IRS likely recognizes Bitcoin as a property asset because the popular crypto asset serves most users as an investment utility and not as a functional currency in the same way the fiat U.S. dollar does. More importantly, because these types of assets are not issued by a central bank, the U.S. government will not recognize them as such until further notice. Understanding crypto taxation also means digging into the little details.

Unlike centralized financial systems, decentralized systems require investors to take a far more active role in diligently tracking their investments from the moment of purchase to sale or exchange for commodities.

At the most basic level, the onus falls more on the investor to track the purchase date, purchase price and what was received in exchange for the Bitcoin in the case of a sale. In contrast, investment history in traditional, non-digital assets, such as stocks or commodities, is fairly easy to track because of the diligent records that brokerages maintain for clients and how readily accessible they are.

Crypto investments and taxation

Basics aside, there is one area in particular in which many accredited investors miss the mark.

Crypto hedge funds are reputed for offering lucrative crypto opportunities. While some crypto hedge funds are considered risky due to questions about crypto-market liquidity, they can be the better route to invest instead of buying individual units of Bitcoin. And as of late, they have proven themselves increasingly popular over the last year. According to Big Four audit firm PricewaterhouseCoopers, assets under management with crypto hedge funds rose from $1 billion in value in 2018 to over $2 billion in value in 2019. Despite piquing the interest of investors, buyers beware.

Compared to traditional assets, when onboarding investors for crypto assets, it’s a whole different ball game. Unlike traditional assets, it’s imperative that digital asset hedge funds ask deeper questions about tax considerations. Some questions regarding crypto investments should include: What kind of property is cryptocurrency x? or Can staking assets on proof-of-stake networks, which offer rewards for staking, be classified as unique income? These are just the basics, but questions like these can easily slip the mind when in the moment and can trigger unintended tax events.

On the other hand, when joining a hedge fund, it’s standard procedure to sign a standard legal entity fund structure, which is often as lengthy as 500 pages. Included are taxation clauses in the contract that explain the implications of investing with the fund. But with hundreds of pages of details, investors may not pay close attention to the little details, inadvertently putting them at serious risk of conflict with the IRS at a later juncture. That’s where a tax advisor should come in, who is accustomed to a more passive role.

Because of crypto’s unique properties, the tax advisor’s role has to become more active rather than passive, as it usually is. Rather than take a backseat, tax advisors should be summoned to provide consultation on investments before they’re undertaken and play a proactive role in educating investors every step of the way. As a result, investors would find themselves better prepared to provide a comprehensive and abiding tax return, rather than find themselves on the short end of the stick, playing catch up with the IRS.

When the taxman comes knocking, it’s better to be safe than sorry and know the regulations; otherwise, the consequences could be much graver. More importantly, the tax advisor must be in the passenger seat, not the back seat, when investors sign on the dotted line.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Derek Boirun is an entrepreneur with institutional experience in commercial real estate development, EB-5 capital investments and blockchain-based investing. Derek is the founder, CEO and director of Realio. He previously founded, and currently acts as a managing member of, the American Economic Growth Fund, an EB-5 investment platform focused on sourcing overseas capital for U.S.-based real estate projects.

Source: https://cointelegraph.com/news/crypto-can-be-lucrative-but-make-sure-you-re-ready-for-the-taxman

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Bitcoin’s market may have seen its strongest bull signal since fall below $50k

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At the time of writing, Bitcoin’s price was yet to fully recover from the massive depreciation that followed its ATH of $58,640. However, while BTC was valued at just under $48,000 at the time, it is worth noting that there have been significant Coinbase outflows since 25 February and these outflows seemed to be signaling an upcoming trend reversal.

Significant Coinbase outflows were observed when Bitcoin’s price was trading around $48,000 on the exchange. What does this entail? Well, this is evidence that U.S investors are still buying Bitcoin. Interestingly, the last time Coinbase outflows increased significantly, they were a precursor to Bitcoin’s price hitting its previous ATH above $52,000.

US investors are still buying Bitcoin, what about you?

Source: CryptoQuant

In the current macro environment, there are several factors that have led to a drop in Bitcoin’s price. The hike in inflows of Bitcoin to spot exchanges led to increased selling pressure and the dip, one that was triggered by miners. When GBTC’s premium dropped to register a negative figure, institutional demand was low, relatively lower than what it has been all along in the current market cycle.

Finally, 10-year U.S Treasury yields surged past 1.6% and this was alarming for risky asset classes, with Bitcoin still considered by many as one of the riskiest asset classes.

US investors are still buying Bitcoin, what about you?

Source: Woobull Charts

On the 25th of February, 13,000 BTC flowed out from Coinbase, with the BTC hitting multiple custody wallets on Coinbase and private wallets. This supports the notion that U.S institutional investors are still buying Bitcoin at the $48,000-price level. This is also one of the strongest bull signals since the dip from the ATH of $58,640.

In the short-term, institutional buying is expected to take the price above $48,000 on top exchanges, with the price of the crypto-asset likely to eventually cross $50,000.

However, it must be pointed out that there may be slow price movement in the short-term. Further, an interesting social metric that seemed to support the aforementioned conclusion was new Twitter followers of crypto-exchanges. Based on data from IntoTheBlock, the number is at par with what it was in 2017.

US investors are still buying Bitcoin, what about you?

Source: Twitter

Social metrics have often predicted changes in volatility and the price trends of Bitcoin and altcoins during previous legs of the current market cycle and previous bull runs as well. In light of the fact that U.S investors are still buying and more specifically, institutional investors are still buying, buying from both retail and institutional investors and demand is expected to push Bitcoin’s price above $50,000 in the short-term.


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Source: https://ambcrypto.com/bitcoins-market-may-have-seen-its-strongest-bull-signal-since-fall-below-50k

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