Key Bitcoin takeaways:
- Bitcoin sells off above $46,000.
- The downside move appears against the approval of anti-crypto bill in the US Senate.
- Technical outlook included.
YEREVAN (CoinChapter.com) — A recent run-up from $29,000 to over $46,000 in the Bitcoin (BTC) market stalled Tuesday as investors assessed the US Senate’s approval of a $1tn infrastructure bill.
The BTC/USD exchange rate topped out at $46,718 after rallying 12.58% in August and fell to near $45,000 in the US session. The sell-off in the benchmark crypto market rippled across its rivals, prompting similar downside correction in Ether, the second-largest cryptocurrency by market cap, as well as XRP, Dogecoin, and others.
Meanwhile, Ethereum rivals Cardano, Internet Computer, and Binance surged more than 5%, 13%, and 3%, respectively, as traders watched them as a short-term hedge against Ether’s first modest correction after its 25.91% rally in August.
Technically, the downside correction across all the earlier profitable assets appeared like profit-taking among traders.
Anti-crypto bill approved
The US Senate passed a $1tn infrastructure bill on Tuesday with a pressing problem for the cryptocurrency industry. Originally, the bill’s authors wanted to tax the crypto industry over $28bn annually to fund its massive $500bn spending plan. But the vague language in the document alarmed digital activists about the bill’s potential to invade privacy and treat every crypto professional as a “broker.”
In detail, the bill treats broke as anyone “responsible for and regularly providing any service effectuating transfers of digital assets on behalf of another person” to report users’ names and addresses.
As a result, the proposed law leaves all kinds of professionals in the crypto space—be it miners or developers—exposed to unnecessary regulations, even though they do not collect personal information about users, many of whom are pseudonymous or anonymous entirely.
“The mandate to collect names, addresses, and transactions of customers means almost every company even tangentially related to cryptocurrency may suddenly be forced to surveil their users,”
wrote Rainey Reitman, digital right group Electronic Frontier Foundations’ chief program officer.
Other critics include Twitter CEO Jack Dorsey and Tesla CEO Elon Musk.
Now, the House will begin debating the infrastructure bill before it receives final approval and moves to the desk of President Joe Biden.
Bitcoin outlook ahead
Bitcoin’s latest correction further comes from its overbought status (RSI is above 70) and a resistance level appointed by the Fibonacci retracement graph between the swing high of $63,774 and swing low of $29,419.
As a result, the price now finds itself inside the 0.382-0.5 Fibonacci range, or the $46,957-42,543 area. Therefore, traders can apply an intra-range strategy to yield maximum opportunities, i.e., opening a long position towards $46,9587 on a bounce from $42,543 and a short entry towards $42,253 on a pullback from $46,957.
Meanwhile, a close below $42,253 could have bears extend their short position towards the next support target of a 20-day exponential moving average (the green wave at $40,425). More declines below the 20-day EMA could expose Bitcoin to a $37,527-price target.
Conversely, an extended breakout above $46,957 would have bulls test $50,000 as their next upside target.
