Bitcoin had another nervy day as Friday approached, with price briefly notching the day’s low at USD 8,954 before quickly pulling its socks up in a frenzied afternoon trading session for Western Europe, to push a new daily high of USD 9,425 (CoinDesk).
Price is now somewhat steady at USD 9,227 as North America tries to make a new direction before the final working day looms for Asia in a few hours. Altcoins are down in general even as Bitcoin makes a tiny move upwards on the day, with Bitcoin SV being the biggest loser, sliding 5.5% amid other mixed fortunes with ETH, DASH and EOS all losing fractions of a percentile, and LTC, BTC and ETC gaining less than 1%.
One big item developing today is the most recent publication by the United States Internal Revenue Service (IRS), which gives taxpayers two new sets of guidelines to follow when paying tax on transactions involving crypto.
One is the Revenue Ruling 2019–24 and FAQs, which will guide readers on identification methods in virtual currency. The other is a new draft for form 1040 Schedule 1, that includes a broad declaration for crypto holdings or trading.
Importantly, the new guidelines differentiate between airdrops (a crypto term for distributing free crypto) and hard forks (that the IRS does not automatically assume to be an airdrop). For now, any person receiving new currencies through a hard fork will be considered to have received them via an airdrop. They are then required to report it to the IRS as gross income.
The other big update in the new guidelines is that the tax agency has finally given clarification on its preferred method of calculation for cryptocurrency. The IRS advises to use what it calls the “specific identification” method. Here, the exact unspent output transaction (UTXO) must be identified, if all the assets occupying wallets owned are sold. This means calculating tax liability based on the sale of the actual Bitcoin UTXO.
Crypto tax lawyer Or Lokay Cohen writes for CoinTelegraph:
“To get a complete and accurate report, taxpayers are encouraged to use the specific identification method. This method is used to track individual units of virtual currency. It is applicable only when individual units can be clearly identified to provide a complete report of crypto-asset movements, including addresses, wallets, exchanges, etc.”
The other news of the day of course is that the Bitcoin white paper marks 11 years since it first made rounds on a cypherpunk mailing list. With such simple terms dominating the milestone document, including “peer-to-peer”, “electronic cash”, “double-spending” and “proof-of-work”, Satoshi Nakamoto innocently unveiling what is still blockchain’s greatest modern solution: solving the Byzantine general’s problem of trust.
Crypto has changed in the decade that has gone, with idealist views and cypherpunk origins now all but forgotten in a slew of corporate drama brought on by the most visible proponents of crypto, such as John McAfee and Anthony Pompliano.
Not that we should begrudge them their success, but that we should always pay homage to Bitcoin’s original ideas and remember that Bitcoin (and some crypto) always intended to be a useful solution, and a timely intervention into a broken system of corruptible finance and banking.
But before we embark down the rabbit hole of sentimentalism, let us quickly take a look at some sentiment views from today’s dip below USD 9,000, which was viewed by some traders as a consolidatory period that was still trying to even out volatility of the week. Many do feel that a fall to USD 8,500 or below would trigger sell offs, and swing sentiment firmly back into bear territory.
However, trader Michaël van der Poppe argues that even if price drops to mid USD 8,000s, the bullish sentiment would still be intact according to an influential 200-day moving average (MA) price. He summarizes:
“Still hanging on the 200-Day MA. Even a retest of USD 8,600 or USD 8,800 wouldn’t be bearish after a USD 3,000 candle. Stuck in this trend, but overall ranging it is.”
Seeing that everyone is getting bearish, is an interesting view on this beautiful morning.
Still hanging on the 200-Day MA. Even a retest of $8,600 or $8,800 wouldn't be bearish after a $3,000 candle.
Stuck in this trend, but overall ranging it is. pic.twitter.com/d4Ym17CZdJ
— Crypto Michaël (@CryptoMichNL) October 31, 2019
If we need reminding, a year ago today, as Bitcoin white paper turned ten, price was below USD 6,600. Still in profit after a year?
Bitcoin Price Analysis: $9,000 Not Enough Support For A Rally But What About $8,800? from Coingape – #BitcoinBTC #BitcoinPriceAnalysis #Coingape #CryptocurrencyNews #PriceAnalysis – Read more at https://t.co/KD6vVBAklO pic.twitter.com/CmQN3Oj8kD
— Criptalk (@criptalk_com) October 31, 2019
Other technical analysts think that the weak USD 9,000 support may not even be the right level to support a rally, while USD 8,800 could very well be. It is argued here that as investors now realizes that false breakouts to USD 10,500 keep happening, Bitcoin needs to find a bottom first before it can go parabolic.
When looking at good old Relative Strength Index (RSI), which is now almost in oversold territory, it becomes obvious that USD 9,000 is not strong enough to push price above USD 10,000. On the other hand, a previous resistance level, USD 8,800, is reached during extremely oversold RSI conditions, could trigger a heavy recovery.
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