21.09.202107:48 Forex Analysis & Reviews: Bitcoin extends weakness. What to expect in short term?

Long-term review

On Monday, the BTC price reached a low of $45,100. Bitcoin began to drop sharply after it failed to consolidate above the resistance level of $48,800 on Saturday.

Exchange Rates 21.09.2021 analysis

On September 20, BTC was trading near the $43,250 mark. Over the past day, it has sunk by 5%. At the same time, the market capitalization fell below $860 billion. Following the decrease of bitcoin, the leading altcoins also incurred significant losses. Ethereum declined by 7% to $3,100, and Cardano shed 9% to $2,170.

Exchange Rates 21.09.2021 analysis

Now, crypto traders are focusing their attention on the amendment to Tax Code Section 6050I of the United States. Reportedly, the new Infrastructure Bill aims to extend requirements on cryptocurrencies. If enacted, this bill will require any US person receiving over $10,000 in cryptocurrency to report the sender's personal information, including Social Security Number (SSN), to the authorities within 15 days. Violation of this law entails penalties and even imprisonment for five years.

Apart from that, the rules of section 6050I can apply to miners, wallet developers, and many other players of the crypto market. Such chnages in the US infrastructure plan will deliver a severe blow to BTC, analysts believe.

In addition, in the near future, the Commodity Futures Trading Commission (CFTC) plans to check one of the largest cryptocurrency exchanges, Binance, for market manipulation and insider trading. US regulators assume that Binance conducts insider transactions, including trading on customer orders before executing them

As for the long-term forecasts of experts amid recent events in the crypto world, they are think that bitcoin is unlikely to fall below $39,000 during the next rally. The main reason for such an optimistic scenario is a decline in the trading volumes on top-tier cryptocurrency exchanges.

However, if the forecasts do not come true and BTC falls to $39,000, bulls will simply not let it drop lower. In this case, the owners of stablecoins will begin to massively transfer them to BTC amid a possible drop in the asset.

Signs of a new rally in the crypto market appeared last week, when the stablecoin supply reached $120 billion. As a rule, it indicates an upcoming trend change.

Irina Maksimova,
Analytical expert of InstaForex
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