Bitcoin price is slowly declining and recently tested $7,100 against the US Dollar.The price is currently recovering, but likely to face hurdles near $7,280 and $7,320.There was a break above a major bearish trend line with resistance near $7,185 on the hourly chart of the BTC/USD pair (data feed from Kraken).The pair might slide further towards $7,000 unless there is a break above the $7,320 resistance.Bitcoin price is struggling to hold key supports against the US Dollar. BTC remains at a risk of more downsides towards $7,000 and $6,880 before a decent upward move.Bitcoin Price AnalysisIn the past few sessions, there was a steady decline in bitcoin price below the $7,320 support against the US Dollar. Moreover, BTC settled below $7,320 and the 100 hourly simple moving average.The recent decline was such that the price even traded below the $7,200 and $7,150 support levels. A new weekly low is formed near $7,109 and the price is currently correcting higher above $7,150.Besides, there was a break above a major bearish trend line with resistance near $7,185 on the hourly chart of the BTC/USD pair. Bitcoin price is now trading near the 23.6% Fib retracement level of the downward move from the $7,531 high to $7,109 low.It seems like there is a short term ascending channel forming with resistance near $7,250. The first key resistance is near the $7,275 level and the 100 hourly simple moving average.The next major resistance is near the $7,320 level. Additionally, the 50% Fib retracement level of the downward move from the $7,531 high to $7,109 low is near the $7,320 resistance area.A successful close above the $7,320 resistance might set the pace for a strong upward move. In the mentioned case, the price might continue to rise towards the $7,400 and $7,500 resistance levels.On the other hand, the price might fail to continue higher above $7,275 and $7,320. In this bearish case, the price might extend its decline below $7,150. An immediate support is near the $7,100 area, below which there is a risk of a breakdown below $7,000.Bitcoin PriceLooking at the chart, bitcoin price is showing bearish signs below the $7,320 level and the 100 hourly SMA. Therefore, there are chances of more losses this week unless the bulls push the price above $7,320.Technical indicators:Hourly MACD – The MACD is currently moving in the bullish zone.Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now just below the 50 level.Major Support Levels – $7,100 followed by $7,000.Major Resistance Levels – $7,275, $7,320 and $7,500.
Archives for December 2019
Ethereum is slowly moving lower towards the $125 support area against the US Dollar.The price is likely to extend losses as long as it is below the $132 resistance.There is a key declining channel forming with resistance near $131 on the hourly chart of ETH/USD (data feed via Kraken).ETH could decline in the near term before it starts a strong rally towards $150 and $175.Ethereum price is correcting lower versus the US Dollar, while bitcoin is consolidating. ETH price must stay above $120 this week to start a fresh increase.Ethereum Price AnalysisAfter forming a top near the $138 level, Ethereum price started a downside correction against the US Dollar. ETH price broke the $135 and $132 support levels to enter a short term bearish zone.Moreover, there was a close below $132 and the 100 hourly simple moving average. Recently, there was a break below the $130 support and the price traded close to the $128 support.A low is formed near $128 and the price is currently recovering. It is trading near the $130 level and the 100 hourly simple moving average. Besides, it is testing the 23.6% Fib retracement level of the downward move from the $138 high to $128 low.On the upside, there are two key hurdles forming near $131 and $132. Additionally, there is a key declining channel forming with resistance near $131 on the hourly chart of ETH/USD.The main hurdle for a trend change is near the $132 resistance. It is close to the 50% Fib retracement level of the downward move from the $138 high to $128 low.Therefore, clear break above the $132 resistance might start a decent upward move towards the $135 and $138 levels. If the bulls gain momentum, Ethereum might rise steady towards the $150 resistance area.On the other hand, there are chances of more downsides below the $128 support area. The next major support is near the $125 level, below which there is a risk of a sharp decline towards $120 or $115.Ethereum PriceLooking at the chart, Ethereum price is slowly moving lower towards the $125 support area. The main support is near the $120 level, below which the price is likely to remain in a sustained downtrend in the coming days. Conversely, a clear break above $132 and $135 could start a strong rally.ETH Technical IndicatorsHourly MACD – The MACD for ETH/USD is slowly moving into the bullish zone.Hourly RSI – The RSI for ETH/USD is currently just below the 50 level.Major Support Level – $125Major Resistance Level – $132
Bitcoin’s recent series of rejection within the mid-to-upper $7,000 region has resulted in BTC’s bears gaining an edge over bulls, as the cryptocurrency is now retreating down to its key $7,000 support level, which appears to be growing increasingly weak.Importantly, one analyst is now noting that Bitcoin could be on the verge of seeing significantly further near-term losses that could send it reeling back towards its multi-month lows, but this drop may be followed by a large upwards movement.Bitcoin’s Current Downtrend May Extend Further, But What Comes After Favors BullsAt the time of writing, Bitcoin is trading down 2% at its current price of $7,190, which marks a notable decline from its daily highs of $7,400 that were set during a fleeting rally earlier this morning.It is important to note that this morning’s rejection at $7,400 marked the latest in a series of rejections that BTC has faced over the past several months, signaling that the upper-$7,000 region is currently an insurmountable level that could continue suppressing its price.One analyst is now noting that a fractal signals that the ongoing downtrend may extend until Bitcoin reaches $6,600, which could be followed by a significant rally.Financial Survivalism, a popular trader, spoke about this in a recent tweet, explaining that a fractal and Wyckoff Accumulation pattern both point to the possibility that BTC will dip as low as $6,600 before it reaches a level that could help spark the next uptrend.“$BTC 12h fractal points to a $6,600 retest in the first week of January, which would match up very nicely with the Wyckoff Accumulation pattern that is starting to form,” he said while pointing to the chart seen below.$BTC 12h fractal points to a $6,600 retest in the first week of January, which would match up very nicely with the Wyckoff Accumulation pattern that is starting to form. pic.twitter.com/VdBLQmGBRN— Financial Survivalism (@Sawcruhteez) December 31, 2019How Bitcoin responds to its support at $7,000 in the near-term will likely offer significant insight into whether or not this fractal is valid, or if it will continue consolidating around its current price levels before climbing higher.Featured image from Shutterstock.
After reclaiming the $130 level earlier this past week, Ethereum (ETH) is currently struggling to hold above this level as bears attempt to take full control of the aggregated cryptocurrency markets.It is important to note that ETH’s current bearishness could cut deeper in the near-term, but analysts are noting that the cryptocurrency’s current price action looks strikingly similar to that seen by Bitcoin when it was trading within the lower-$3,000 region in late-2018 and early-2019.If this similarity is valid, Ethereum could be on the verge of incurring a significant amount of upwards momentum that potentially leads the crypto into a multi-month bull market throughout the early part of 2020.Ethereum’s Bulls Struggle to Hold ETH Above $130 as Selling Pressure Ramps Up At the time of writing, Ethereum is trading down marginally at its current price of $131, which marks a notable decline from its multi-day highs of over $137 that were set this past weekend.It is important to note that although the cryptocurrency was rejected in the upper-$130 region concurrently with Bitcoin’s rejection at $7,500, ETH is still trading up significantly from its weekly lows of $125.The $120 to $125 area is a key support region for the cryptocurrency, as $120 is where it bounced during its recent capitulatory sell off, and $125 is a level that bulls ardently defended for the past couple of weeks.HornHairs, a popular cryptocurrency analyst on Twitter, explained in a recent tweet that he believes today’s slight ETH sell-off may be fleeting, as it swept its range lows and was able to post a bounce at this level.“$ETH short update: May have gotten shaken out here, more setups to come. Closed for the same reason as the BTC short. The correlation with BTC and ETH led me to believe we’d push up after Monday’s low getting swept on BTC. +1.24R (before fees),” he explained while pointing to the chart below.$ETH short updateMay have gotten shaken out here, more setups to come. Closed for the same reason as the BTC short. The correlation with BTC and ETH led me to believe we’d push up after Monday’s low getting swept on BTC.+1.24R (before fees) pic.twitter.com/d6E3LplBSl— HornHairs 🌊 (@CryptoHornHairs) December 31, 2019Could ETH Be Bound for a Massive Multi-Month Rally?Gat, a popular crypto analyst on Twitter, explained in a recent tweet that he believes Ethereum’s price action over the past couple of months looks strikingly similar to that seen by Bitcoin in late-2018 and early-2019 when it was trading in the lower-$3,000 region.“As much as I hate $ETH, it is giving $BTC 3k kinda vibes,” he explained while pointing to the two charts seen below.As much as I hate $ETH, it is giving $BTC 3k kinda vibes. pic.twitter.com/K7O3nT1UnY— Gat ALIBABA WHALE (@TheGemClub) December 31, 2019If this correlation does prove to be valid, Ethereum could see some strong upwards momentum in the early part of 2020, potentially allowing it to post massive gains.Featured image from Shutterstock.
Ripple blockchain’s native token XRP registered one of its worst performances in 2019. And it is likely to extend its losses in 2020.The XRP-to-dollar exchange rate is down by circa 49 percent on a year-to-scale. At the same time, the token’s price against the benchmark cryptocurrency bitcoin has plunged by more than 72 percent within the same timeframe. The performance alone shows that investors are leaving the XRP market en masse.Ripple’s native asset spent 10 out of 12 months in red territory | Source: TradingView.comLatest Ripple-Related “FUD”XRP’s downside moves came amidst a series of scandalous so-called “Fear, Uncertainty, and Doubt” (FUD) that has plagued its issuer Ripple Labs.The San Fransisco-based cross border payment company uses XRP as a settlement token. It originally issued 100 billion XRP units and sold a portion of them to obtain funds for the development of its blockchain platform. However, Ripple Labs retained control over 61 percent of XRP tokens, which brought them on the driving seat of pricing the token.An exchange called Coinmotion called out Ripple Labs for holding a monopoly over the XRP supply in a report published in February 2019. The exchange said:“XRP isn’t mined like typical cryptocurrencies. All 100 billion ripple coins have already been created. Ripple plans to release about half of them on to the markets while keeping the other half. Currently there are about 39% of ripple in the open markets, while 61% are kept by Ripple Labs.”The latter half of 2019 saw what Coinmotion had envisioned. Ripple Labs released a financial report wherein it declared that it had sold about $1.2 billion worth of XRP tokens to fund its operations.The move created hysteria among the existing XRP holders. Many of them even launched a petition on Change.org, requesting the Ripple team to stop dumping the token.Dwindling Investor Confidence in XRPSenior executives of Ripple Labs have continuously posted clarifications. Lately, the company’s CTO David Schwartz confirmed that by selling XRP, they were not pocketing the forward. He added that Ripple had the backing of venture capitalists to support the development of their project.“We started selling XRP only after there was a market price and for negligible amounts compared to our other funding,” wrote Mr. Schwartz.You will not find any individual who bought XRP because they wanted Ripple to have money to do stuff to enrich them. We were financed by VC. There was no ICO.— David Schwartz (@JoelKatz) December 27, 2019The clarification did not land well with the community. Many respondents expressed their bewilderment, stating that Ripple had always claimed that they sold the tokens to “enhance the ecosystem.”There’s several arguments you could of made defending Ripple unloading XRP (ie needed money to invest back into community for long term benefit) but yours is just a fucking lie. This is a big red flag among many others.— NB | KillSwitch (@KillswitchNb) December 30, 2019With the year for Ripple ending on a more confusing note, it is likely to hurt investors’ confidence in the token in 2020.[Disclaimer: The author holds XRP in his portfolio.]Featured Image from Shutterstock
The aftermath of Bitcoin’s recent rally up to highs of $7,500 – and subsequent rejection – has been grave for bulls, as BTC has been caught within a strong downtrend that is leading the cryptocurrency down to its key support region that exists around $7,000.It is important to note that one key factor is currently showing signs that this current sell-off may be weaker than it appears, which may mean that it will be short lived and followed by a bounce that leads the crypto back up to its resistance within the mid-to-upper $7,000 region.Bitcoin’s Bears Roar as They Spark an Intraday Sell OffAt the time of writing, Bitcoin is trading down just under 1% at its current price of $7,270, which marks a notable decline from its daily highs of $7,400 that were set during an early morning rally attempt that resulted in it dropping to its current levels.This latest rejection comes closely on the heels of the one seen last week, when BTC surged to highs of over $7,500 before facing insurmountable resistance that sparked the ongoing downtrend.It is important to note that Bitcoin’s bulls have made many attempts to rally over the past several weeks, with each attempt resulting in strong and swift rejections that lead the cryptocurrency back to its support within the lower-$7,000 region.HornHairs, a popular crypto analyst on Twitter, explained in a tweet from earlier this morning that the buying pressure the crypto has found despite its recent break below its swing high signals that it may soon see further upwards momentum.“$BTC short: Flipped short upon a break back below the swing high, already bouncing hard and back above Monday’s low, might flip long again,” he explained while pointing to the chart seen below.$BTC shortFlipped short upon a break back below the swing high, already bouncing hard and back above Monday’s low, might flip long again pic.twitter.com/TfdhFXaPwN— HornHairs 🌊 (@CryptoHornHairs) December 31, 2019This Key Factor Signals That the Current Sell-Off May Be Short LivedCantering Clark, another popular crypto analyst on Twitter, explained that active and passive sellers are not currently working cohesively, which means that shorts will be caught off guard if BTC’s bulls ardently defend this level.“Cumulative Volume Delta showing heavier selling into this low, yet less follow through than previously around 7200. Wouldn’t be surprised to see shorts caught offside right here temporarily. Active and Passive not working together right now,” he explained while pointing to the chart seen below.Cumulative Volume Delta showing heavier selling into this low, yet less follow through than previously around 7200.Wouldn’t be surprised to see shorts caught offside right here temporarily.Active and Passive not working together right now.$BTC pic.twitter.com/WEuzAepdXA— Cantering Clark (@CanteringClark) December 31, 2019As BTC inches lower to its key support level at $7,000, how buyers respond to this level will be imperative for determining which direction the crypto will trend in the first days and weeks of the new year.Featured image from Shutterstock.
You probably already know that Nouriel “Dr Doom” Roubini is no fan of Bitcoin. The professor and economist has frequently sounded off against the crypto asset space in recent years.What you might not know is that Roubini also has something of a musical side. His most recent offering sees him take on and rework Taylor Swift’s hit “I Knew You Were Trouble”. Well, kind of…Dr Doom’s Most Memorable Anti-Bitcoin Rants Immortalised on Hilarious New TuneNew York University economics professor and all round Bitcoin hater Nouriel Roubini has become the star of an auto-tune cover of Taylor Swift’s 2012 hit single “I Knew You Were Trouble”. Titled simply “Bubble”, the track is the work of the blockchain startup Harmony.Watch famed Bitcoin sceptic @Nouriel take on Taylor Swift as he predicts more ‘trouble’ for the blockchain industry!But is there a surprise ending?#Crypto #YearInReview ➡️ https://t.co/l444djWvIJ pic.twitter.com/XDHwnEQvHU— Harmony (@harmonyprotocol) December 31, 2019NewsBTC has reported on Roubini’s Bitcoin hating numerous times over the last twelve months. The economist has used just about every common critique to bash the digital currency. These include its apparent lack of scalability and decentralisation, as well as its supposed use for criminal activity.Harmony’s tune, posted to YouTube earlier today, looks back at some of Roubini’s most infamous rants against Bitcoin. Those behind it have autotuned Dr Doom’s outbursts and set them, rather hilariously, to the Taylor Swift chart topper.Standout lyrics include a particularly foul mouthed appraisal of the digital currency industry, as well as the track’s pull-no-punches refrain:“Cos I like shouting ‘bubble’ when I’m on TV.
So shame on me now.
Tell me the facts, I will disagree.
Cos I’m old and out of touch.”Somewhat bizarrely, the lyrics also have Roubini declaring himself to be the creator of Bitcoin, Satoshi Nakamoto. However, after apparently working on the protocol more than a decade ago, he has since started cooperating with the US Securities and Exchange Commission to bring down the digital currency. Whilst this seems about as plausible as some other claims on the title of Bitcoin inventor, it would make for serious plot twist in the story of the most popular digital currency if it turned out to be true!The video concludes with Roubini coming to terms with the fact that he is probably missing out on the greatest transfer of wealth in human history since he isn’t invested in any digital asset. Presumably, he no longer has access to the coins he claims to have mined shortly after Bitcoin’s creation:“But the reality of it, I’m not gonna make a penny.
Because I don’t hold any coins.
Not Bitcoin, Ethereum, or XRP” Related Reading: Bitcoin Bulls Not Out of Woods, Wait For Break Above $7.5KFeatured Image from Shutterstock.
Tom Shaughnessy is a co-founder of Delphi Digital as well as the host of the Chain Reaction podcast. Jordan Clifford is managing director of Scalar Capital.
In this end of year interview for The Breakdown, Tom argues that the big story of 2019 was actually the fact that it was all about “quiet” building. When it comes to 2020, however, watch out for fireworks.
Tom predicts we’ll see a major increase in the Layer 1 smart contract platform wars, as well as growth in the perceived importance of token economic design. Meanwhile, Jordan argues that the crypto industry is likely to see a shift back to development at the application layer.
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
The year is coming to an end, and a lot of people have started thinking about minimizing their tax burden. If you’re a bitcoin investor, things get even more complex. The IRS recently sent out 10,000 letters to cryptocurrency investors, and this is an indication of how serious they are when it comes to cryptocurrency tax compliance. This means that bitcoin investors need to make doubly sure that they’re filing their returns as accurately as possible. At the same time, they also need to find legitimate ways of minimizing their bitcoin taxes.
Let’s look at some things you can do to save your precious gains in April.
Tax-Loss Harvesting: Turn Your Losses Into Tax Profits
This is one of the best loopholes in current crypto regulation that you can leverage to reduce your tax burden. Let’s say you’ve made significant profits from crypto trades through the year. However, the current value of the bitcoin you hold is extremely low. You can simply sell your current bitcoin holdings at this low price. This will trigger capital losses that you can then set off against your profits. In fact, you can even use these losses to offset future gains and ordinary income (up to $3,000).
But what if you want to keep holding onto your bitcoin in the hope of future appreciation? Well, if you are based in the U.S. then you can simply buy it back afterward.
Note that some countries use Wash-Sale rules that prevent re-buying sold assets right away. For example, in Canada, a special Superficial Loss Rule kicks in whenever you sell at a loss — essentially preventing you from reducing your crypto taxes if you buy the assets back within 30 days. There is a similar rule in the U.K. as well. However, since the U.S. treats crypto as property, the Wash-Sale rule that applies to tax-loss harvesting in securities doesn’t apply to crypto.
You may have noticed that, at the time of publication, bitcoin is trading at fairly low prices, and many believe this might be because big investors are leveraging tax-loss harvesting and selling their holdings. So, if you are sitting with unrealized losses, now could be a good time to sell.
Keep Accurate Records and Avoid Costly Mistakes
One of the biggest reasons why people tend to overpay crypto tax is that they don’t have accurate records of their trades. Given that crypto investors can do hundreds of trades in a year, record-keeping can be quite a chore. This becomes more complex because exchanges don’t necessarily keep records for everyone. For instance, Coinbase only issues a tax form statement to users who have realized gains in excess of $20,000 and undertaken more than 200 transactions.
Many exchanges do allow you to download your transaction files, though, and people generally rely on these to do their bitcoin taxes. However, if you are not careful you could easily end up overpaying. Here are two of the most common mistakes that people tend to make:
Mistake #1: Treating Transfers as Taxable Events
First, there may be some transactions that are simply a transfer of cryptocurrencies from one wallet to another; but if you miss out on this, they may appear to be two separate transactions — and you will end up paying double the tax.
Let’s say you buy 1 BTC for $7,000 on Binance and later move the funds to your private BTC wallet. A few days later, you transfer the BTC from your private wallet to your Coinbase account and sell it for $7,200. So this is just one transaction, with capital gains amounting to $200. However, if you have not kept records clearly, your accountant may get confused during tax season and look at the two transactions as distinct from each other. As a result, you could end up paying taxes first on the withdrawal from Binance and again when you sell the assets on Coinbase.
Mistake #2: Not Calculating Your Cost Basis Correctly
Sometimes it becomes difficult to identify the cost of the cryptocurrency that you are selling. Without an accurate cost basis, you won’t be able to deduct the cost of acquiring an asset from the sale price. As per the IRS’s latest guidelines, you are now able to use both Specific Identification as well as FIFO (First In First Out) to calculate cost basis.
If you have records of your purchases and know the cost basis for the holdings in your different wallets, then you can make tax-efficient sales by selling coins with a high cost basis first. However, if you have no idea how much you bought the coins for, then you will just have to apply the FIFO rule which gives you no control over the cost basis and could result in higher taxes.
The Bottom Line When It Comes to Bitcoin Taxes
There’s still time to get on track before the year ends. Get your records in order and sell your holdings to leverage tax-loss harvesting — you’ll find that your end-of-season tax bill is a lot less steep than you expected. If you’re feeling overwhelmed and need expert help, consulting with a CPA who understands cryptocurrencies and bitcoin taxes might also be a good idea.
This is an op ed by Robin Singh. Views expressed are his own and do not necessarily reflect those of Bitcoin Magazine or BTC Inc. This article is for information purposes only and should not be construed as tax advice. Consult with a tax professional to assess your own individual tax requirements.