• Bitcoin and the cryptocurrency market dump massively amid rumors of increase in taxes on capital gains.
• Bitcoin slides under $50,000 as buyers struggle to secure formidable support level.
• The short-term technical picture appears extremely bearish as more declines linger.

Bitcoin price had displayed incredible recovery signs on Thursday, with investors eyeing liftoff to $60,000. However, the flagship cryptocurrency hit a snag at $56,000, allowing correction to come into play. The breakdown ignored a double-bottom pattern at $51,000, whereby the bearish leg extended beneath $50,000.

Note that JP Morgan Chase & Co. analysts had warned earlier this week that Bitcoin lacked the momentum to continue with the uptrend. The analysts cited reduced institutional demand for the bellwether cryptocurrency. Moreover, they said that failure to gain ground above $60,000 soon would culminate in appreciable losses.

At the time of writing, Bitcoin trades at $49,800 amid a rising overhead pressure. Investors are mainly in panic mode that could have emanated from a rumor that the United States is considering increasing taxes on capital gains.

The President, Joe Biden, has been reported to be interested in tighter regulations in the cryptocurrency industry. For that reason, a proposal is ready for tabling in Congress. According to people privy to the report, the proposed tax rate would double from the current to 43.4%. Biden’s idea is to heavily tax millionaire investors to raise funds for sustaining various social programs.

Meanwhile, Bitcoin bulls battle to secure higher support to regain ground above $50,000. The Moving Average Convergence Divergence (MACD) hints at the bearish outlook lasting longer. The Relative Strength Index (RSI) on the four-hour chart reinforces the narrative.

Support is envisioned at $48,000 to allow bulls to shift the focus upward. However, if lost, Bitcoin will be looking toward $44,000.

 Bitcoin intraday levels

Spot rate: $49,800

Trend: Bearish

Volatility: High

Support: $48,000 and $44,000

Resistance: $50,000 and $54,000