Panic felt as Bitcoin collapses to $48,000

Bitcoin (BTC) crashed to nearly $48,000 after reaching its all-time high last April 16 at almost $65,000. This was the currency’s lowest level since March of this year.

The largest digital currency to date, Bitcoin, is most likely to be affected by reports last weekend claiming the U.S. Treasury Department was cracking down on money laundering activities that involve cryptocurrencies. There was some sort of panic, as BTC dropped more than 15% this weekend, although a bit of rebound was shown in the next few days.

The asset seems to be really affected by the plan of U.S. President Joe Biden to nearly double the capital gains tax on the wealthy class, resulting in a significant drop.

Panic slowly setting in

American crypto-asset investors are showing signs of panic at the start of U.S. tax season.

Those who have been in possession of cryptocurrencies on their balance sheets for more than a year face risks of high capital gains taxes if they cash out in selling their digital assets. The Internal Revenue Service has also increased tax on the sale of encrypted assets.

This presents quite a dilemma, especially for holders of BTC, which has risen as high as 700%.

Bitcoin price at a glance

From its daily movement, according to price analysts, Bitcoin has dropped below its 50-day moving average, and its bull run has been halted.

The bulls have been active in pushing the price above the 100-day Exponential Moving Average (120-EMA) of more than $49,200. But if they fail, the bears will have BTC’s price down to the 120-EMA of a little more than $46,800.

Furthermore, a significant increase in the sell orders will move BTC below the support level and this might trigger a more severe price correction. This could lead to Bitcoin plummeting to its lowest point of the year, projected at just above $43,000.

 

Image courtesy of Tima Miroshnichenko/Pexels

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