Bitcoin fell below $46,670 last week and is testing the Fibonacci 23.6 as bears took control of crypto markets. A glance at the Bitcoin daily chart reveals the bullish trend has not reversed yet. However, if bears maintain their hold on crypto markets this week too it may well usher the reversal of the recent uptrend! As it looks now Bitcoin is actually poised to breach below $41,450!
The global stock market’s advance reversed last week as Federal Reserve officials restated the priority to curb rising inflation, hinting at possible start of trimming of the central bank’s balance sheet in May. Bitcoin led crypto market liquidation losses. However, Monero crypto currency defied crypto market slump last week. And regulators continued the scrutiny of crypto markets’ operation in the wider framework of global financial system as the European Union banned providing high-value crypto service to Russia while Slovenia unveiled a plan for flat tax on crypto transactions.
Persistent hawkish statements by Federal Reserve policy makers last week resulted in rising of US Treasury yields, repricing of risks by markets as well as curbing of investors’ risk appetites. On Wednesday last week Bitcoin posted up to $92 million in liquidation losses, the most among all cryptocurrencies, followed by ether at $64 million. Liquidations occur when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. Wednesday’s losses were the third-highest of 2022. Losses continued on Thursday and Friday too.
The Monero (XMR) cryptocurrency, which uses a public distributed ledger with privacy-enhancing technologies to achieve transactions anonymity, gained nearly 9.5% in the past week compared with the crypto market’s decline of 8.5% in the same period. XMRUSD outperformed its top rivals including Bitcoin and Ether on a weekly timeframe.
European Union member states decided Friday to ban the provision of high-value crypto-asset services to Russia as part of a fifth package of sanctions imposed in response to the Ukraine war. The measures extend a prohibition on deposits to crypto wallets.
The Slovenian government submitted a flat-rate tax proposal on crypto transactions last Thursday and asked the Slovenian Parliament to move quickly to approve it. The proposed tax, would be due when virtual currencies are sold or exchanged, and would be set at an effective rate of just under 5%. Documents published by the government suggest that the tax will be charged at 5% of the value of the redemption, after subtracting an allowance of 10,000 euros.