Bitcoin Dealt Another Round Of Blows, Is The Bear Market Back?

Best Owie

2 years ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

In another shocking twist that has dealt a severe blow to the price of bitcoin, crypto-friendly bank Silvergate announced that it would be winding down operations as the contagion from the FTX collapse spreads. Naturally, this led to a swift decline in the price of BTC, dragging it to the mid-$21,000s once more. This recent event, coupled with other developments in the market, could mean that bitcoin and others are moving back into the bear market.

U.S. President Biden Comes For Crypto Gains

According to a Wall Street Journal report, U.S. President Biden has once again turned his attention toward the cryptocurrency market in a way that would affect how investors trade assets in the space. A fiscal 2024 budget plan that is expected to be revealed on March 9 included a proposal to increase the capital gains from 20% to almost 40%.

One of the reasons given for this is to stop the phenomenon known as “tax loss harvesting” in crypto. What this means is that sometimes, investors would sell their cryptocurrencies at a loss to make it a claimable loss on their tax filings, but then repurchase the assets right after. This will however be limited to higher net-worth individuals making at least $1 million a year.

Despite this cutoff, the broader market has not received the proposal well. Participants in the space have expressed their displeasure at the proposal. One of these is crypto analyst Lark Davis who took to Twitter and posted the tweet below.

Biden proposing to double capital gains taxes from 20 to 40% and not allowing for tax loss harvesting on #bitcoin …. WTF… pic.twitter.com/SnJNglpoAA

— Lark Davis (@TheCryptoLark) March 9, 2023

Bitcoin Returns To Bear Market Levels

As the news of Silvergate’s collapse and the new tax proposal by President Biden spread, digital assets in the crypto space quickly responded. Bitcoin lost its footing above $22,000 and fell to $21,500 for the first time in over three weeks.

BTC declines to three-week low | Source: BTCUSD on TradingView.com

Other digital assets in the space followed this trend with the likes of Ethereum, Cardano, and Dogecoin all cascading down with over 2% losses. This has pushed the crypto market farther back into the bear territory, increasing the possibility of a prolonged bear market. The tumble in price also saw market liquidations cross $100 million in the last 24 hours.

However, bitcoin has held up better than expected so far. The digital asset found support above $21,500, suggesting that there was still a reasonable amount of buy pressure in the marketing holding the pioneer cryptocurrency up. As such, liquidations have slowed down significantly in the last 4 hours to only $6.7 million.

Whether bitcoin will continue to fall remains to be seen at this point. If BTC is able to reclaim the $22,000 level before the trading day is over, then this would have only been a temporary setback and the cryptocurrency could resume its upward trajectory.

Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet… Featured image from NameCoinNews, chart from TradingView.com

Best Owie

Best Owie is a seasoned managing editor with a wealth of experience currently serving as the Managing Editor at NewsBTC. Best is a highly skilled professional with a track record of producing engaging and informative content. With a keen eye for detail and a passion for accuracy, Best is committed to ensuring that each article published meets the highest standards of quality.

Best has over six years of experience in the crypto industry and has overseen the creation and publishing of thousands of articles over the years. Best is always abreast of everything that is going on in the crypto industry in order to create and curate the most relevant content for readers. This shines through in Best’s publications, which are always clear and concise, enabling easy reading and understanding for all.

Best is also an avid learner and advocate for new technology. This has seen Best dive into topics in areas such as decentralized finance (DeFi), non-fungible tokens (NFTs), Layer 2 blockchains, etc. In addition to this, Best is a vocal member of the crypto community across various social media platforms such as X and Reddit. Best’s work garners tens of thousands of readers monthly, who rely on the information in these publications to keep up-to-date with everything happening in the crypto community.

Best’s articles explore breaking news, intricate systems such as yield farming, liquidity pools, and other decentralized finance (DeFi) systems. This is because Best understands the importance of information to gaining financial freedom and believes that everyone should have access to this information.

Best also believes in leveraging the blockchain for philanthropy to create the most positive social impact. This involves work with charitable organizations focused on financial literacy and education. With each article, Best lends a voice to important issues such as a more financially inclusive future, transparent systems for growth and development, and technology that is not self-serving but one that serves all of humanity.

When not curating engaging content, Best can be found reading a book with a cup of hot chocolate, enjoying a Netflix series, or exploring the outdoors with Green - the world’s most quiet and well-behaved Husky. Best’s interests also span other industries such as art, finance, and security, attending seminars and conferences in not just the crypto industry but other industries as well.

As an animal lover, Best is also involved with charities for animals, local shelters, and rescues. Best is also involved in local events that promote inclusivity, such as being a prominent member of hiking clubs and a cycling club, as well as being a part of a very happy group of animal lovers.

Best is a true professional in every sense of the word, with an exceptional dedication to producing high-quality work. This shines through in Best's work on and off the clock. These include advocating for inclusive crypto education for all, the impact of financial illiteracy, and the benefits of adopting new technologies such as cryptocurrencies. Best’s prolific career in the media industry is a testament of how hard work and dedication pays.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.