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Bitcoin hit its highest level in nearly three months after U.S. senators reached a last-minute compromise on a provision of the $ 550 billion infrastructure bill that deals with how to tax crypto assets.
Bitcoin surged to a nearly three-month high on Monday as policymakers resolved last-minute compromises on how to tax crypto assets.
The biggest digital coin rose 5.4% to $ 46,245 during New York trading hours. The rally builds on the recent momentum – the coin has risen by around 17% over the past week.
Peer coins also benefited, with Dash, Ether, and Litecoin, among others, each rising at least 5%. The Bloomberg Galaxy Crypto Index of Largest Digital Assets rose 8.1% at one point, also its highest since May.
“This move should tell us that the worst is behind us right now,” said Matt Maley, chief market strategist for Miller Tabak + Co. Unless he immediately reverses the move, he could quickly move towards $ 50,000, where he might find some resistance. . Still, “the action is very bullish on a technical basis,” he said.
The rally comes as a bipartisan group of senators, who debated a cryptocurrency reporting requirement in the $ 550 billion infrastructure bill, reached a compromise, Bloomberg News reported. However, it is not yet clear whether he will get a vote.
“Washington now realizes how strong and how many different people in the United States are very passionate about cryptocurrencies,” Kristin Smith of the Blockchain Association told Bloomberg’s “QuickTake Stock” streaming program, adding that the problem had helped unify the crypto community. “The more clarity, the more certainty the industry has, the better off we’ll be in the long run. “
Meanwhile, traders are watching Bitcoin’s charts for clues on the next step. The coin’s 14-day Relative Strength Index (RSI) shows it is overbought, although it broke its 200-day moving average line in the middle of the rally. The coin could still find resistance there – as it did in May – although a sustained position above this is seen as a bullish development. Many envision $ 50,000 as the next key threshold.
“Bitcoin has regained its momentum over the past week,” wrote Craig Erlam, senior market analyst at OANDA Europe. “Now back in bullish territory, the question is how far can it go this time around.”
After correcting more than 50% and forming a solid foundation of support in a potentially longer-term bull market, the odds are in favor of Bitcoin – and Ether – to resume its upward trajectory, wrote Mike McGlone of Bloomberg Intelligence. in a note. The years after the halving have historically seen great appreciation, he said, and the original cryptocurrency could reach $ 100,000.
“One question is whether supply and demand conditions have deteriorated since early 2021 and compared to Bitcoin’s past,” McGlone wrote. “Our view is that the fundamentals are bullish in a maturing environment.”
Read more: Watch Bitcoin this weekend to find out how Coinbase can trade on Monday
(Price updates, updates with Senate news)
–With help from Kenneth Sexton.
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