In a market teeming with activity, Bitcoin’s latest surge to $40,000, marking a nearly 1% increase on Thursday, has investors and analysts revisiting their Bitcoin price predictions. This uptick comes amidst a flurry of significant developments: Chinese investors, spurred by stock market dynamics, are increasingly engaging with Bitcoin despite its prohibited status in the country.
In a parallel development, the IRS has revised the tax form questions concerning digital assets, signaling a shift towards greater regulatory clarity. Further adding to the ecosystem’s transparency, Arkham has revealed the onchain addresses associated with four major Bitcoin ETFs, a move that could potentially reshape investor sentiment and market dynamics.
Chinese Market Trends Drive Bitcoin Engagement
Amidst the nation’s economic recession, more and more Chinese investors are looking to cryptocurrencies, particularly Bitcoin, as a safe haven. Investors are accessing cryptocurrencies through unconventional means and operating in a regulatory gray area as a result of the stock and real estate markets’ downturn. People are trading on sites like OKX and Binance despite China’s prohibition on cryptocurrency trading and stringent money movement regulations.
Taking advantage of Hong Kong’s more welcoming climate for cryptocurrencies, the Hong Kong branches of significant Chinese financial institutions, such as Bank of China and China Asset Management, are investigating ventures linked to cryptocurrencies.
Analysis:Bruised by stock market, Chinese rush into banned bitcoin https://t.co/Qcfje82xga pic.twitter.com/zPzTJXHiIa
— CNA (@ChannelNewsAsia) January 25, 2024
Due to economic uncertainty, more Chinese investors are turning to digital assets like Bitcoin, seeing its potential in the face of obstacles in the traditional market. This trend could have a favorable effect on Bitcoin prices.
IRS Revises Digital Asset Stance in Tax Forms
All United States taxpayers must record income connected to digital assets on their federal tax return for 2023 as a result of updates and expansions made by the Internal Revenue Service (IRS) to the digital asset question on income tax forms. The updated question, which is now present in four more tax forms, focuses on transactions that incorporate digital assets like stablecoins, cryptocurrencies, and non-fungible tokens (NFTs).
The extension of the digital asset inquiry to many tax forms—such as corporations, partnerships, estates, and trusts—highlights the IRS’s increased emphasis on cryptocurrency tax compliance.
The IRS has issued a reminder that taxpayers must answer a digital asset question on 2023 tax returns, as well as report all digital asset related income when they file their 2023 federal income tax return. https://t.co/V5XJa4pWdp
— Forbes (@Forbes) January 24, 2024
Even while the news mostly affects taxpayers’ reporting requirements, greater oversight and regulatory actions in the cryptocurrency industry could have an impact on investor mood, market dynamics, and cryptocurrency prices.
Arkham Boosts Transparency with Bitcoin ETF Onchain Data
Four spot Bitcoin exchange-traded funds (ETFs) connected to financial firms Blackrock, Fidelity, Bitwise, and Franklin Templeton have been discovered by Arkham Intelligence. With a focus on blockchain intelligence, the company has now recognized half of the ETFs available in the US market.
The ETFs that have been identified are the Bitwise BITB fund, the Franklin Templeton EZBC ETF, the Blackrock IBIT ETF, and Fidelity’s Wise Origin spot Bitcoin ETF (FBTC). The disclosure improves market openness by offering lucid insights into fund holdings and activities.
Breaking: ETF addresses for Blackrock, Fidelity, Bitwise, and Franklin Templeton are now on Arkham.
Arkham has identified the on-chain location of four of the Bitcoin ETFs. We are the first to publicly identify these addresses.
Links and holdings breakdown below: pic.twitter.com/gFJAIklwtc
— Arkham (@ArkhamIntel) January 22, 2024
A more transparent bitcoin market is essential to fostering investor confidence and drawing knowledgeable participation. Even though the news mainly affects ETF transparency, it also benefits the integrity of the market as a whole and could have an impact on investor mood and Bitcoin prices.
Bitcoin Price Prediction
In the current market landscape, Bitcoin is nearing a critical juncture, edging close to its pivot level at $39,947 as shown on the 4-hour chart. The cryptocurrency is encountering initial resistance at $40,884, with further hurdles at $41,791 and an even more significant one at $43,394 that may restrain any price increases.
Conversely, Bitcoin’s support levels are positioned at $38,618, with additional safety nets at $37,638 and $36,745 if the price were to decline.
The Relative Strength Index (RSI), situated at 38, suggests a balanced field, with no immediate signs of overbought or oversold conditions, leaving room for potential shifts up or down. The 50-Day Exponential Moving Average (EMA), at $40,494, hovers just above the pivot point, indicating an ongoing struggle between buyers and sellers.
Bitcoin Price Chart – Source: Tradingview
Technical patterns, including a prominent double top formation with resistance near $39,950, could spell a downturn if Bitcoin doesn’t manage an upward breach. As it stands, the broader sentiment for Bitcoin’s trajectory is inclined to the downside, particularly if it cannot sustain above the pivotal $40,000 mark.
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