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Was Bitcoin’s rally overextended? If yes, what next

After an action-packed week, Bitcoin is trading at $35468 after having endured a flash crash. However, the price action left traders asking why the flash crash in Bitcoin took place? Also, does this m

The post Was Bitcoin’s rally overextended? If yes, what next appeared first on AMBCrypto.

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After an action-packed week, Bitcoin is trading at $35468 after having endured a flash crash. However, the price action left traders asking why the flash crash in Bitcoin took place? Also, does this mean the rally is over and it was over-extended? As per the data, there may have been excessive speculation in Bitcoin’s price, to begin with. Bitcoin’s price dropped nearly 27% after hitting the new ATH and there were several reasons for the same. The most prominent ones include the increasing active supply on exchanges and bullish sentiment on derivatives exchanges despite massive liquidations. A few signs that Bitcoin’s rally was over-extended were noted as well. A rapid surge in open interest and interest in general on exchanges, in the short-term which was the highest in the past 3 years, since the historic bull run of 2017.

Alongside that, a surge in addresses with non-zero balance was noted, on Glassnode’s metrics. This rapid increase in addresses with balance 0.1 and above and 1000 and above, indicated that both whales and retail traders are buying. In the long-term this buying may increase the accumulated Bitcoin in wallets and lead to a drop in exchange reserves, starting the cycle all over again.

Was Bitcoin's rally over extended?

Bitcoin’s active addresses || Source: Glassnode Metrics

Another critical metric was the map of unspent Bitcoins, which signals towards the accumulation of Bitcoin at levels higher than $34000. The speculation that the price rally was over-extended may be partially true, and instead of a sharp drop in price, there is a wall of resistance in the $38000-$39600 level and the asset is struggling to cross this price level on most exchanges. It is over-extended since the momentum and volatility have dipped repeatedly at different times during the week, but institutional investors have continued buying and this has kept sentiment among retail traders positive, though the rally was coming to an end, at the current price level.

An over-extended rally may have led to investment flow from Bitcoin to altcoins, as this week several top altcoins based on market capitalization on coinmarketcap.com, have posted double-digit gains. These gains may be a product of the change in capital flow. In this case, if the rally abruptly ends, it may lead to a sell-off, however, support is maintained at key level of $34400, according to the technical analysis of BTC’s price action.

Source: https://ambcrypto.com/was-bitcoins-rally-over-extended-if-yes-what-next

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NEXT Chain: New Generation Blockchain With Eyes on the DeFi Industry

[Featured Content] The cryptocurrency industry is booming throughout the past year, and the increase in the total market capitalization is definitive proof. The market is, at the time of this writing, valued at about $1.5 trillion. The same can be said about the DeFi industry. The total value locked in various protocols exceeds $39 billion, […]

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[Featured Content] The cryptocurrency industry is booming throughout the past year, and the increase in the total market capitalization is definitive proof. The market is, at the time of this writing, valued at about $1.5 trillion. The same can be said about the DeFi industry. The total value locked in various protocols exceeds $39 billion, […] Checkout PrimeXBT
Source: https://cryptopotato.com/next-chain-new-generation-blockchain-with-eyes-on-the-defi-industry/

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‘Bitcoin Senator’ Lummis Optimistic About Crypto Tax Reform

Sen. Cynthia Lummis, the first in the Chamber to own Bitcoin, says bipartisan support will accelerate crypto tax reform.

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Sen. Cynthia Lummis (R-Wy) expressed hope on Wednesday that Congress will be able to reform the tax rules governing cryptocurrency, which have been a longtime bugbear for Bitcoin owners and the burgeoning crypto industry.

“We’re optimistic we can find bipartisan agreement on that issue,” said Lummis during a meeting with crypto executives and policy makers on the social media app Clubhouse.

The comment from Lummis, who has owned Bitcoin since 2013, came in response to a question about whether Congress will pass a proposed law calling for a “de minimis” tax exemption for small cryptocurrency transactions.

Currently, IRS guidance stipulates that any minor crypto transaction—such as sending $5 worth of Bitcoin to a friend or using it to buy a cup of coffee—can amount to a capital gains event. Critics say this rule creates needless tax headaches, and discourages innovation by limiting the use of crypto in day-to-day transactions.

And while the IRS has become preoccupied with collecting tax on crypto—a question about virtual currency is now at the top of filers’ income tax return—the agency has done little to simplify the process for reporting it.

Lummis’s interest could help accelerate the passage of crypto tax reform, which has been proposed in bills before the House of Representatives, but never in the Senate. Lummis, whose home state of Wyoming has branded itself as a crypto hub, also pointed to a new Financial Innovation Caucus she is leading with Sen. Kyrsten Sinema (D-Az) as evidence of bipartisan interest in the issue.

Bitcoiner Cynthia Lummis Wins US Senate Seat

Policy researchers on the Clubhouse call cautioned, however, that passage of crypto legislation is unlikely to occur in the near future. The Biden Administration and Congress is currently wrangling over weighty issues related to the pandemic and economic stimulus, so crypto taxation—a relatively boutique issue—is unlikely to be a high priority.

More broadly, members of the call noted that lawmakers are becoming more knowledgable about cryptocurrency, and not only at the federal level.

Nathan McCauley, the CEO of crypto storage service Anchorage, said that his company has been speaking with several state governments about adding crypto to their corporate treasuries—a move that would mirror what big private sector companies like Tesla and Square have done in recent months.

McCauley suggested the states’ interest in crypto is related to a search for alternate finance and investing options at a time when bond markets are in a prolonged slump.

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Source: https://decrypt.co/60059/bitcoin-senator-lummis-crypto-tax-reform

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Billionaire Hedge Fund Manager and a Former CFTC Chairman Reportedly Invested in Crypto Firm

The hedge fund manager who predicted BTC’s rise to $40k in 2018 and the former CFTC Chair, a.k.a ‘crypto dad’, have invested in BlockTower Capital.

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The hedge fund manager who predicted BTC’s rise to $40k in 2018 and the former CFTC Chair, a.k.a ‘crypto dad’, have invested in BlockTower Capital. Checkout PrimeXBT
Source: https://cryptopotato.com/former-cftc-chairman-and-a-billionaire-hedge-fund-manager-reportedly-invested-in-crypto-firm/

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Bitcoin Price Analysis: Back Above $50K, But Facing Huge Resistance Now

Bitcoin is up by a solid 6% today as the primary cryptocurrency surged by over $3000 over the past 24 hours. Quick recap: bitcoin is recovering after a heavy correction over the past week, in which the cryptocurrency dropped by around 25% as it broke beneath the February ascending price channel (as shown on the […]

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Bitcoin is up by a solid 6% today as the primary cryptocurrency surged by over $3000 over the past 24 hours. Quick recap: bitcoin is recovering after a heavy correction over the past week, in which the cryptocurrency dropped by around 25% as it broke beneath the February ascending price channel (as shown on the […] Checkout PrimeXBT
Source: https://cryptopotato.com/bitcoin-price-analysis-back-above-50k-but-facing-huge-resistance-now/

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