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This week, Bitcoin has been keeping between $50k to $58k until today, when the prices crashed.BTC price has fallen to $47,500, and the market has turned a deep red. Right after making a new all-time high of $2,600 and a 3-year high against BTC, Ether started going down and fell to $2,060 today. Unlike the last time, altcoins were hit hard and are down as much as 30%.With Bitcoin slipping below the 50-day moving average support, more downside is possible; as we reported, traders are looking somewhere between a $40k-$45k drop. Despite such a deep correction, it is resetting the volatility and funding, putting the market in a much healthier position to continue higher.After more than a million traders were liquidated for a record $10.1 billion last Sunday, this latest sell-off has wiped out just under $3.93 billion in the past 24 hours. Trader Alex Kruger said,
“This is a spot-driven panic. Market is rangebound. In a rangebound market, price is bound to test the lows of the range. Market participants suffer from 2018 PTSD. Upcoming tax changes are bearish yet still TBD, far ahead, and should have been expected as we're part of Biden's plan.”US President Joe Biden unveiled a raft of proposed changes to the US tax code, including a plan to nearly double taxes on capital gains to nearly 40% for people earning more than $1 million. Tax concerns not only weighed on the crypto market but also American stocks.The upcoming tax proposal would definitely be bearish for risk assets, including crypto, but the latest FUD doing the rounds in the market of 80% tax on crypto trading that spread like wildfire is not true.The IRS has also stepped up enforcement of tax collection on crypto sales, asking crypto users to disclose transactions, whether they received, sold, sent, exchanged, or acquired any financial interest in any digital currency, on their 2019 individuals tax returns.
What’s Ahead?
Like always, just as the crypto-asset consolidated after making a new all-time high, Guggenheim Partners’ Scott Minerd went back to making his $20k calls. In an interview with CNBC this week, the firm’s global chief investment officer said Bitcoin had run too far, too fast, and this is the top. Minerd said,“Given the massive move we’ve had in bitcoin over the short run, things are very frothy, and I think we’re going to have to have a major correction in bitcoin."This is not a surprise coming from him, as during the January retracement as well, he had said exactly this. At the time, Guggenheim hadn't received the SEC approval to buy Bitcoin through GBTC.But as we know, BTC has soared about 135% from Jan. low to a new ATH of about $65k last week. The interesting thing is that instead of moving on the exchanges to sell, more and more BTC continues to move out of exchanges that don't support Minerd’s top call.His correction target remains the same, around the 2017 bull market top. Minerd said,
“I think we could pull back to $20,000 to $30,000 on bitcoin, which would be a 50% decline, but the interesting thing about bitcoin is we’ve seen these kinds of declines before.”However, it’s part of “the normal evolution in what is a longer-term bull market,” he said, with his ultimate moon target between $400,000 to $600,000 per unit. Unlike Minerd, according to some crypto market participants, BTC could very well hit $800k by the end of this year.Unlike Minerd, value investor Bill Miller who first bought BTC around 2014 or 2015 at an average price of $350 per coin, Bitcoin is going higher because the demand for the trillion-dollar crypto asset is much faster than its supply which is growing 2% a year and “that’s all you really need to know.”In the meantime, JPMorgan strategists are calling for lack of momentum the same as Tallbacken Capital Advisors’ Michael Purves, who said the recent highs weren’t confirmed by bitcoin’s relative strength index (RSI), and its upward momentum is fading.“From purely a technical perspective, the bullish case looks highly challenged here in the near term,” after its recent rally, wrote Purves, CEO at the firm.He also points to Bitcoin’s daily MACD signal, the moving average convergence divergence gauge, which has turned bearish in the intermediate-term. He wrote,
“While upside momentum is clearly looking challenged here, it is inconclusive how much downside risk remains."“It is entirely possible that Bitcoin could simply consolidate in a range for some time.”[deco-beg-single-coin-widget coin="BTC"]