09.08.202116:47 Forex Analysis & Reviews: Don't buy bitcoin headlong - history repeats itself

The fight on the infrastructure bill continues in the US Senate, and, in particular, senators cannot formulate a section of the bill that will introduce new tax rules for cryptocurrencies and companies that are associated with them. And although according to recent reports, a compromise is already close enough, the deal may be concluded too late to be added to the bill. Despite this, rumors about the promotion of changes in the right direction are pushing the cryptocurrency market to grow. Let me remind you that the agreement would resolve a multi-day dispute about how cryptocurrency organizations and companies will have to inform the tax authorities about users and their transactions.

Senator Wyden, along with Republican Senators Pat Toomey and Cynthia Lummis, proposed an approach that received support from the cryptocurrency community. However, the more debates there are, the more likely it is that the compromise reached the last minute may be useless (if the amendments are not put to a vote before the adoption of the bill itself, which is expected to be voted on this evening or tomorrow morning).

The US Senate again reached an impasse over the weekend due to the introduction of additional changes to the law, which also very seriously affects the field of cryptocurrencies. On Sunday evening, senators who are in favor of making additional changes to the amendment that exempts some participants in the cryptocurrency community from the need to provide user data achieved a delay of 30 hours. This time should be spent usefully since it ends on Tuesday morning when a vote on the main bill can also take place, although lawmakers can unanimously agree to end the debate earlier.

If a compromise is not reached or the amendment does not have time to reach the final part of the vote, this will be a blow to cryptocurrency investors, as well as a number of companies that are indirectly related to exchange operations or trading on the exchange. We are talking, in particular, about miners or software developers who will also have to report to the tax data, which they simply do not have access to. Senator Lamis said that the amendment under discussion clarifies the definition of crypto brokers who are subject to the new tax requirements. During the debate, which took place over the weekend, it is noted that this issue was quite an important subject of attention of both parties. Both conservative Republicans and progressive Democrats are interested in finding ways to increase control over new technology.

"The idea behind the amendment to the bipartisan deal is just to level the playing field," Sen. Elizabeth Warren, a Massachusetts Democrat, said Sunday. "This isn't a direct tax on cryptocurrency, it's just a reporting requirement that exists everywhere. It seems to me the right approach," added the senator.

Meanwhile, amid rumors about a possible agreement on the amendments, bitcoin is slowly but surely moving towards the level of $46,700, at which the bulls will again begin to feel uncomfortable. Although this will allow trying to consolidate above the 200-day moving average, which can bring back many big players into the market. But don't underestimate the cunning market. There were similar attempts to return in January-February 2018, after the largest sale of bitcoin, and all these bull markets were engaged only in sucking in new "onlookers" who were sorry to earn extra money quickly, after which the largest plums took place. History will likely repeat itself this time as well, as everything points to just that.

If buyers do not consolidate above the 200-day moving average soon, which is just around $44,800, then it is better to postpone the purchase of bitcoin at the highs. A breakout and consolidation above the $46,700 level will provide excellent ground for further strengthening of the trading instrument in the area of the $52,000 and $58,000 highs. If the bulls fail to take the above level, a second instant sale to the $41,100, $36,700, and $33,300 levels is not ruled out.