What may be worrying for BTC maximalists is no surprise for experienced margin traders. Bitcoin is down 21.46% in the last seven days of trading, dropping from above $63k below the critical support of $50k.
What’s going on? BTCUSD reached the historical high just before the Coinbase IPO on April 14. The crypto exchange’s stocks opened way above the reference price, it quickly spiked to $29 per share, but investors quickly realized it was an excellent opportunity to sell. Coinbase closed at $293 on Thursday.
U.S. President Joe Biden’s plan to raise capital gains taxes triggered the sell-off. The goal is to nearly double taxes on capital gains to 39.6% for people earning more than $1 million.
BTCUSD is down another 4.6% today. Ethereum, which was outperforming Bitcoin recently, setting a record at $2645 yesterday, has taken a steep dive of -6.5% today and is trading at $2256 at the moment.
The prices may go even lower in the following hours. It will be interesting to see if the panic triggers a further collapse. There’s always an opportunity to buy low for cryptocurrency bulls, but maybe opening additional short positions is the right thing to do. It’s all up to your strategy, analysis, and intuition.
Enjoy trading cryptocurrency contracts over the weekend. It’s going to be fun 🙂