The recent surge in the price of Bitcoin, an impressive 15% jump in just a few days, has captured the attention of cryptocurrency enthusiasts and investors alike. This sudden increase in value has sparked questions about the potential inception of a new bull market for Bitcoin. However, there is a notable challenge for the cryptocurrency, as it struggles to break above the $31,000 double-top pattern. Furthermore, even with Japan instituting new tax rules, Bitcoin’s price faced pressure on Monday amid mixed market sentiment.
The Japanese government’s move to exempt self-issued cryptocurrency from unrealized profit taxes offers a more favorable environment for crypto entrepreneurs. This recent development, combined with increased applications for spot Bitcoin ETFs, drove significant gains for the cryptocurrency. Despite market volatility, Bitcoin successfully surpassed the $30k hurdle, maintaining its position above this crucial level.
Japan’s National Tax Agency introduced regulations exempting token issuers from paying corporate taxes on unrealized crypto gains. This revision falls in line with their earlier move to eliminate taxes on paper gains for crypto firms issuing and holding tokens. The implementation of these tax rules could generate positive sentiment within the cryptocurrency community, contributing to higher demand and potentially positively impacting Bitcoin’s price. Moreover, the approval of the Volatility Shares 2X Bitcoin Strategy ETF by the US Securities and Exchange Commission could amplify this positive sentiment, although some have questioned why a leveraged futures offering was introduced before a straightforward spot ETF.
However, it is important to note that Bitcoin’s price still faces robust resistance at the $31,000 level, evidenced by a double-top pattern. This presence of exhaustion among buyers and a decrease in bullish sentiment could result in a minor corrective pullback in the cryptocurrency’s price. Bitcoin’s immediate support is currently found at around $29,600. Should this support level fail, further declines could drive the crypto’s value towards the key support level of $28,250, which aligns with the 50-day exponential moving average. A drop below $28,200 could trigger the next support level, potentially around $26,750.
Current indicators, such as the relative strength index (RSI) and moving average convergence divergence (MACD), place Bitcoin in a neutral zone, suggesting that it is neither overbought nor oversold. This further supports the idea that a corrective move could be imminent in the near future. Conversely, should Bitcoin manage to break above the $31,000 level, investors could expect a potential target of approximately $32,500 and, if momentum sustains, possibly around $34,000.
In conclusion, while Bitcoin’s price has experienced a notable surge recently, challenges still remain, such as the struggle to break above the $31,000 double-top pattern. Nonetheless, favorable regulatory measures in Japan, combined with the introduction of new ETFs, could generate positive sentiment and potentially boost demand for the cryptocurrency.
Source: Cryptonews
