The price of bitcoin had dropped dangerously close to the 2017 cycle peak on Wednesday. It was a brutal decline for investors who watched their BTC portfolios incur losses after losses. Speculations were rampant in the space on what a touch below $20,000 would have meant for the market. The implications were abundant in their impact but the recovery back above $21,000 has staved off the bears, if only for a little while.
Is The Bitcoin Bottom In?
After the market recovery on Wednesday, it has become apparent that there has been some intervention in the market crash. With bitcoin in the $20,000 level, many had resigned to the fate that there would be no respite until the 2017 high levels were broken. If this had happened, it would have marked a first-of-its-kind event in the history of bitcoin where the digital asset had always managed to never trade below previous cycle peaks.
Related Reading | Bitcoin Crash Sends Institutional Investors Running For The Hills
As such, significant support forming right above $20,000 has restored some hope in the market that this would be the bottom. So far, this theory has managed to hold as bitcoin has turned back into the green for the first time since the crash began.
More importantly, though is the fact that the recovery has not been significant by any measure. The digital asset still remains well below its 20-day moving average, a sign that bears can easily take hold once more.
BTC decline triggers fear of hitting previous cycle peak | Source: BTCUSD on TradingView.com
However, bitcoin is said to be at oversold levels. So, the market expects to see fatigue in the sell-offs that have been rocking the digital asset. A slowdown would definitely be good for bitcoin but it would need to see more recovery to ensure this.
Implications Of Falling Below $20,000
The $20,000 level is important for bitcoin to hold for a number of reasons. One of the most major of these are the MicroStrategy bitcoin-backed loans. The way these loans are structured leave open a margin call opportunity if BTC to fall below its previous peak cycle. And although CEO Michael Saylor has assured the market that the firm has more collateral to put towards its loan to avoid a margin call disaster, it remains a very real possibility.
Related Reading | Double-Digits Losses Are The Order Of The Day As Bitcoin Declines To $20,000
Another implication is the Celsius liquidity levels. Now, the first is said to have paid off some of its loans which had pushed its liquidation price back to $14,000 but a break below $20,000 shows no significant support and would quickly see the lending protocol liquidated.
Last but not least is the fact that bitcoin at $20,000 represents an important technical and psychological level. Given that the majority of BTC-denominated open interest are all at the $20,000 level, a break below this would see renewed sell-offs from investors.
The only major support after this level is at $16,000, after which, it falls to $14,000, the Celsius liquidation price. However, if bitcoin is able to recover above $25,000 by the end of the week, a test of the $29,000 resistance point would quickly follow.
Featured image from Listverse, chart from TradingView.com
Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…
Albania To Start Taxing Crypto-Related Income From 2023
Authorities in Albania are finalizing regulations that will allow the taxation of income and profits from cryptocurrency investments. The government intends to begin imposing the levy in 2023, after adopting the necessary legislation which has been proposed for public consultations.
Albania Set to Impose Crypto Tax as Early as Next Year
The Albanian state should begin collecting taxes on income from crypto assets as of 2023 in accordance with a new income tax bill, the local English-language portal Exit News reported on Friday. The government also hopes to pass a number of other laws and bylaws this year in order to comprehensively regulate the matter.
The special tax legislation is currently open for public consultations. It introduces the concept of taxing crypto holdings and income derived from virtual assets. The latter have been defined as “a digital representation of a value that can be deposited, traded or transferred in digital form, and that can be used for payment or investment purposes or as a medium of exchange, including but not limited to cryptocurrencies.”
However, the definition does not cover central bank digital currencies (CBDCs), the report notes. That’s despite a growing number of monetary authorities around the world developing a digital version of their national fiats. The list includes major powers such as the United States, the European Union, China, and the Russian Federation.
The Albanian law also defines cryptocurrency mining as an activity using computing power to confirm transactions and gain virtual assets in exchange. The extraction of cryptocurrencies has been a grey area although law enforcement has been going after illegal mining facilities in the country and pressed charges against some of their operators.
Under the new legislation, any income from crypto transactions or mining will be classified as corporate income when it’s received as a result of business activity. And when the beneficiaries are private individuals, they will have to pay capital gains tax of 15%.
Financial Watchdog Tasked to Expand Crypto Regulatory Framework
Earlier this month, the Albanian parliament ordered the Financial Supervisory Authority (AFSA) to prepare and adopt new regulations regarding cryptocurrencies by the end of 2022. Albanian law allows crypto trading platforms to legally work in the country but no licensed entities are currently operating in Albania, Exit News remarked.
Two years ago, Albania also adopted a law titled “Financial markets based on distributed ledger technology.” While many have welcomed the legislation, critics have questioned whether the small nation in South East Europe, still an EU hopeful, is capable of properly regulating its crypto sector to prevent it from being used for money laundering, something it’s struggling to achieve in the fiat space.
The legislature referenced a recent report by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval), which recommended additional steps regarding the risks associated with cryptocurrency. In November 2021, the AFSA approved its first two regulations implementing the crypto markets law, which introduced capital and licensing requirements for entities working with digital assets.
Tags in this story
Do you expect Albania to adopt comprehensive regulations for its crypto space by the end of the year? Tell us in the comments section below.
Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
NHL enters the NFT space partnering with Marketplace Sweet
NHL enters the NFT space partnering with Marketplace Sweet Abdulrasaq Ariwoola · 42 seconds ago · 1 min read
The NHL partnership with Sweet will offer a variety of digital collectible experiences to its fans, tradable in the marketplace
Cover art/illustration via CryptoSlate
The National Hockey League on Thursday announced its partnership with NFT Marketplace Sweet. This partnership will be the league’s first dive into digital collectibles.
The partnership, of which the NHL’s players and Alumni’s association are part, will go live in October to mark the start of the 2022-2033 NHL season.
The NHL Marketplace
The NFT marketplace is expected to offer a range of experiences to NHL fans. Including digital collectibles that showcase historical moments, past and present season game highlights, and NHL stars top plays.
The marketplace will also feature gamified collection experiences, specialty packs, and 3D interactive trophy rooms where users can display their collections. Among these offerings there are also dynamic NFTs designed to change based on current team data.
Additionally, fans would be able to buy, sell, collect and trade the collectibles on the marketplace.
However, the announcement did not state which blockchain would host the marketplace.
NFTs in the sporting space
The NHL joins a long list of sporting institutions that have embraced digital collectibles.
In 2020, the NBA launched Top Shot NFTs, its digital collectibles marketplace, in partnership with DapperLabs. Likewise, the NFL launched its play and own NFT game while the MLB is to launch its NFT game soon.
However, the extreme sell-off in the crypto market has seen crypto companies pull out of sports deals. This is so as crypto companies strive to stay afloat as the severe sell-off continues in the market.
FTX recently pulled out of a partnership deal with Los Angeles Angels. Similarly, sources suggest a patch deal between NBA Washington Wizards and a crypto company has crashed.
What Lido staking dominance may mean for Ethereum’s future
What Lido staking dominance may mean for Ethereum’s future Abdulrasaq Ariwoola · 2 hours ago · 2 min read
The Ethereum community has raised fears of lido staking dominance leading to centralization. What does that mean for ETH 2.0?
Cover art/illustration via CryptoSlate
Lido DAO token holders have commenced voting to determine whether the DeFi platform should reduce its staking pool. The vote is a follow-up to a governance proposal released on June 24.
The voting process results from a month-long deliberation over Lido’s staking dominance and whether it should limit itself to curb potential centralization risks.
Lido currently holds 31% of all staked Ether on the Ethereum proof-of-stake blockchain, the Beacon chain. The staking dominance has raised fears within the Ethereum community, and critics fear it will threaten Ethereum’s decentralization.
The vote is expected to end on July 1, and the result will determine whether Lido will self-limit or not. Should the majority of voters vote in favor, another vote will take place on how the self-limiting process should work.
Concerns over stETH dominance
In the governance proposal, Lido stated that its staking dominance would give it more voting power once the Beacon chain goes live. As a platform that started to counter centralized exchanges, it argued that such centralized voting power poses an existential threat to the blockchain.
The Ethereum community has raised similar fears about the centralization of voting powers. The DeFi platform currently has around one-third of all staked Ether, which could give voting leverage once the transition to the Beacon chain is complete.
Vitalik Buterin, the Ethereum co-founder, has argued that no single protocol should have a majority in staking ETH. He opined that such dominance, combined with Lido’s governance structure, is potentially a dangerous point of centralization.
Further, it stated the proposition is premised on the belief that other liquid staking protocols would also limit their exposure. This would effectively allow smaller protocols to meet the supply shortfall.
What Lido staking dominance means for ETH2.0
Ethereum’s transition to a PoS blockchain means it will rely on validators to validate transactions on the blockchain. Unlike a PoW blockchain that requires miners to expend excess energy to solve complex mathematical problems.
However, to operate a validator node, a user must deposit 32 ETH, which is a long shot for many users. Lido, on the other hand, as a staking service provider, allows users to bypass this requirement and earn staking rewards.
According to data from Etherscan, roughly 12.6 million ETH is staked in the ETH2.0, which amounts to 10.6% of the circulating supply of ETH. Of the 12.6 million ETH staked, approximately 4.2 million have been staked through Lido by 73,369 stakers, making Lido the most used staking pool on Ethereum.
This means, should Ethereum transition to its PoS blockchain with Lido still having the lion’s share of the staking dominance, it would give the DeFi platform excessive influence over transaction verification which many warn could pose a risk. Some concerns include validator slashing, governance attacks, and smart contract exploits.
On the other hand, Lido’s staking dominance could help prevent a takeover by a centralized exchange and ensure the blockchain remains decentralized.
stETH remains depegged
The staked Ether, which is supposed to be pegged to ETH, remains depegged after a wave of massive sell-offs. Speculations have profused about the security of the token and whether its depegging could spell more chaos for the crypto ecosystem.
On June 16, Alameda Capital, one of the largest holders of stETH, dumped its stETH holdings, a massive $57 million. This is coupled with the continued financial troubles of Celsius and Three Arrows Capital, both large holders of stETH.
As of the time of press, stETH has not gained parity with ETH and is trading at $1,173.
Bitcoin6 days ago
What to know about Bitcoin’s pricing model and whether BTC will be ‘part of it’
Binance6 days ago
Binance Suspends Direct Deposits And Withdrawals In Brazil
Altcoins6 days ago
The many reasons why DOGE believers aren’t done yet
2:1 ratio of sellers6 days ago
Cumberland Sees Massive OTC Moves During Crypto Market Rout — ‘Most Volume We’ve Seen This Year’
ada6 days ago
Cardano [ADA]: Plotting the path to a 125% rally after 1 August
3AC6 days ago
Class-Action Lawsuit Accuses Terraform Labs Of Misleading Investors
Altcoins5 days ago
Litecoin [LTC]: How traders can leverage these profitable outcomes
Bitclub Network6 days ago
Namibian Educator: Low Level Of Crypto And Blockchain Adoption In Africa Compelled Me To Write A Book