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After falling below $60,000 today, Bitcoin prices traded at close to $60,000 today. (Photo ..
Today’s Bitcoin prices experienced interesting fluctuations. They dropped to their lowest point since October, and then struggled to recover their losses.
According to coinDesk data, the world’s most popular digital currency dropped to $58,673.84 today.
Additional CoinDesk data reveal that the cryptocurrency was at its lowest point since October 28th.
The digital asset experienced a slight recovery after falling to the lowest point, and it climbed to $61,400 in a matter of hours.
Bitcoin prices dropped to $59,200 today, but they are still above this level.
The digital asset was close to $61,000 at the time this report was written.
[Ed Note: Investing crypto coins and tokens is highly risky as the market is not regulated. It is possible to lose all of your investment.
Analysts spoke of perfectly natural developments such as profit taking when explaining the latest price movements.
Charlie Silver, Chairman of Permission.io stated that “Today’s actions remind us that markets can be volatile and that there are always profit-taking as well as pullbacks.”
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He stated that short memories can be a liability for market participants.
“In July, BTC reached 30k and experienced a 100% increase in just 4 months. This type of appreciation will see a 50% retracement.”
Joe DiPasquale (CEO of cryptocurrency hedge fund manager bitBull Capital) also participated.
He noted that Bitcoin had risen past its previous high and set a new one. Retracements are often followed by new highs as profit taking begins.
DiPasquale also cited other developments such as the U.S. Securities and Exchange Commission rejecting a spot bitcoin exchange-traded funds (ETF), and “a generally under leveraged market” that created market conditions “conducive to a move down.”
Dylan LeClair leads market research at Bitcoin Magazine. He also discussed the impact of high leverage on bitcoin’s recent retracement.
He stated that the recent market pullback could be largely attributed to excessive leverage on both the long and short sides, with derivative traders betting on spot Bitcoin price rising.”
“This is evident in the Binance perpetual Swap, which is the largest derivative market in the world. It is also the most liquid and well-regulated. However, it is over-leveraged on the long side.
US Infrastructure Bill
Others highlighted the importance and recent signing into law by President Joe Biden of the U.S. Infrastructure Bill.
The legislation is causing a lot of attention in crypto circles because of the stricter regulations it will bring certain companies that do business in the space.
Some industry participants are more concerned about the bill’s language, which will give a wider definition of “brokers” than the current law and require that companies comply with these requirements and report any cryptocurrency transactions.
Andrew Rossow is an internet and technology lawyer who commented on the situation.
He noted that the spending bill was primarily intended to improve the U.S. government’s public works system. However, it also contains new rules for crypto-brokers, who will now be required to report transactions exceeding $10,000 to the tax authorities.
“Unfortunately, this will lead to tax increases on digital assets. Rossow stated that we may see continued price fluctuations because service providers might begin charging higher fees to offset the newly assessed tax levies.
He added that:
“Specifically, crypto brokers (which is currently vaguely written) would need to issue a 1099-like document disclosing their customers. This is because the definition of a broker is unclear. It can explain some of the volatility in the market for those participants who are afraid.
Rossow stated that the bill is “powerful” – more so than anyone realizes now. It’s about defining our industry’s definition of Crypto broker. However, the current legislation leaves the definition of a broker very vague which has caused fear, concern and reluctance to support such a bill.”
“Once we understand what the precedent is for what exactly a broker is, the industry can have a better idea of how bitcoin will continue being affected for good (or bad). Investors and market participants are worried about this bill right now. The courts (digital immigrants), will have to address digital currency.