14.03.202217:41 Forex Analysis & Reviews: Bitcoin: a vote will be held in the EU to ban the turnover of cryptocurrencies with a Proof-of-work mechanism

The noise around cryptocurrencies is only gaining momentum. And although the weekend passed without serious hesitation, which is quite surprising, rumors that the EU may ban the circulation of cryptocurrency assets with a "proof-of-work" mechanism are no longer just rumors. According to the EU, PoW is harmful to the environment

The changes, which may mean the introduction of a ban on bitcoin, will be put to the vote by the parliamentarians of the European Union today, and the result has not yet been determined. The market is not responding to this news in any way yet, but it is possible that everything can change quite quickly. Good news will leave everything as it is, but bad news can become a catalyst for the fall of bitcoin. The Parliament's Committee on Economic and Monetary Affairs is to vote on the draft of the proposed structure of Markets in Crypto Assets (MiCA), an extensive EU legislative package on digital asset management. The project contains a belated addition that aims to limit the use of cryptocurrencies based on an energy-intensive computing process known as Proof-of-work.

According to reports spread on some leading Internet resources, the provision in question requires that all crypto assets comply with "the EU minimum environmental certification standards regarding their consensus mechanism used to verify transactions." For cryptocurrencies such as bitcoin and ether, whose turnover in the EU is quite high, the rule suggests a phase-out plan to transfer their consensus mechanism from Proof-of-work to other methods that consume less energy.

Let me remind you that ether already has plans to switch to the Proof-of-Stake consensus mechanism, however, this option is unlikely to be acceptable for bitcoin since it changes its whole essence. The proposal was met with a rapid negative reaction from the crypto community around the world.

The previous version of the project proposed to ban cryptocurrency with Proof-of-work in the EU, starting in January 2025. Later, this provision was excluded due to criticism from supporters of the crypto community.

If these changes are still accepted, it is not clear how the market will react to this. Most likely, the crisis and collapse of the cryptocurrency will not happen, since the mining of bitcoin and other altcoins, as well as the support for the functioning of the network that miners are engaged in, is not so common in the EU. However, the parliament may even go so far as to follow the path of China and impose a ban on the circulation of cryptocurrencies on the territory of the European Union - then this will become another test for decentralization and all the staples of the cryptocurrency world.

As for the technical picture of bitcoin

Bitcoin once again rushed to the $37,500 mark, but was rebuffed by buyers there. Active purchases in this range have been observed for quite a long time, there is the highest interest in the first cryptocurrency. Now everything is tied to the levels of the greed of investors and their intimidation of what is happening on the world stage. In the event of another decline in the trading instrument, only a breakdown of $37,500 will fail the trading instrument below, to a minimum of $34,300, and there it is at hand to $32,900. It will be possible to talk about stopping the bear market in the current conditions only after BTC returns above $ 41,850. Only after that, you can expect to recover to the areas of $45,360 and $48,500. The fact that bitcoin feels pretty great in the current conditions proves the interest in it, keeping its bullish potential in the long run.

As for the technical picture of the ether

The focus remains on the resistance of $2,756. Only consolidation above will return the prospect of an upward correction to the market. In the meantime, the probability of a large bearish trend will be valid. The breakdown of $2,756 will serve as a new impulse to reach the levels of $2,942 and $3,190. If the pressure on ETH persists, purchases in the area of large support of $ 2,500, as it was this weekend, are not excluded. A break in this range will be a reason to go to the lows: $2,312 and $2,149, where the major players will again begin to actively act.