Crypto community criticized the "infrastructure" bill in the US!

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As we said in the previous article, bitcoin has grown to $44,000, but this growth still does not look like the beginning of a new bullish trend. On the contrary, it looks like the last flashes of buyer activity before a new prolonged fall. Now we will try to explain our point of view. First, recently there has been more and more talk in the US that the Federal Reserve may complete the quantitative stimulus program in 2022, which is only five months away. Recall that the Fed's measures to inject trillions of dollars into the economy as part of the stimulus and recovery program after the crisis played an important role in the latest bullish trend. Some of this money flowed to the cryptocurrency and stock markets, which set absolute value records in 2020-2021. Therefore, the latest growth of bitcoin, as well as the entire cryptocurrency market, was directly related to the fact that more and more money was simply and banal in the economy, which had to settle somewhere. However, there is a high probability that the QE program will be completed in 2022, which means that the Fed's printing press will finally turn off and the cash flow to the economy will stop. This means that bitcoin and other assets that were actively growing during the crisis and the pandemic will have much less opportunities to show growth.

Secondly, in the near future, the US may adopt new legislation as part of an "infrastructure" package, which involves increased taxation of the cryptocurrency sector. Simply put, according to the proposed bill, almost all cryptocurrency transactions that are made by any market participants will have to "pass" through the Tax Administration in the United States and be taxed. It doesn't matter who this market participant is. If he/she participates in the cryptocurrency movement chain and receives a certain reward, he/she will be obliged to pay tax. The cryptocurrency community has already criticized this bill, saying that it will adversely affect the development of the cryptocurrency industry in the United States. Experts believe that the proposed tightening of tax legislation is completely unfair, since many transactions and transfers on the network are not profitable or commercial. Moreover, some sections of the bill are practically impossible to implement in practice, and many market participants may leave the United States to avoid collisions with the Tax Administration. It is not yet known whether this bill will be adopted in the form in which it exists now, but it is obvious that if so, the demand for bitcoin in America may greatly sink. Thus, from our point of view, there are two global factors that can create a powerful pressure on digital gold in the coming months.

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Technically, on the 4-hour timeframe, bitcoin continues to rise and has exceeded the resistance level of $43,852. There is also an upward trend line that supports the upward movement. Thus, until the price settles below this line, we do not recommend selling bitcoin. Although, from our point of view, there are still high chances that the main cryptocurrency could drop to the level of $29,700.

The material has been provided by InstaForex Company - www.instaforex.com

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