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Bitcoin May Reach $21K as Regulators Boost Trading

The bears are now better positioned for this week’s $510 million BTC options expiry, but their overconfidence may allow the bulls to turn the tables. For the past 35 days, Bitcoin has been attempting to break through the $20,500 resistance; the most recent failed attempt occurred on October 6. BTC tested levels below $18,500 throughout that time, and on four separate instances, the bears showed strength.

Bitcoin/USD 12h Index

Bitcoin/USD 12h Index

The support level deteriorates with each test, so investors are still skeptical if $18,200 was the true bottom. For the bulls to maintain their lead at this week’s $510 million options expiry, momentum must be maintained.

The expiration of options on October 21 is particularly important because Bitcoin bears stand to gain $80 million by pushing the price below $19,000. 

SA Regulator Declares Crypto Assets as Financial Products

Crypto assets are officially regarded as financial goods under South Africa’s Financial Advisory and Intermediary Services (FAIS) Act, according to a public notice issued in a government gazette. Since crypto asset service providers (CASP), including exchanges, are now considered financial goods, they must submit an application for a license.

The announcement also comes shortly after Kuben Naidoo, the deputy governor of the South African central bank, disclosed that his organization would treat cryptocurrency holdings as financial instruments. The South African Reserve Bank would be able to govern digital assets with such a policy.

The CEO of Valr commented on the implications of the announcement for the sector, saying: “Overall, this is a great step for the crypto industry and South Africa in general. This Declaration will pave the way for many of South Africa’s major conventional financial institutions (TradFi) to begin offering cryptocurrency-related goods and services.” 

Japanese Regulators Loosen Crypto Laws

The regulating body for crypto assets in Japan, the Japan Virtual and Crypto Assets Exchange Association, published intentions to further relax the country’s crypto rules.

By March 2024, the regulators could completely do away with the time-consuming pre-screening procedure, even for coins that have just entered the market. According to remarks made by Genki Oda, vice president of the association, this scenario may also apply to tokens issued through initial coin or exchange offers. 

IRS Releases Draft Tax Document

The IRS is extending the deadlines for filing cryptocurrency taxes. Digital assets will be “considered as a digital asset for federal income tax purposes,” according to a new draft of Form 1040.

The list of digital assets in this year’s publication expressly includes cryptocurrencies, stablecoins, and non-fungible tokens (NFTs). It also includes “any digital representations of value that are maintained on a distributed ledger or other technology that is cryptographically secured.”

On their tax returns, taxpayers must state whether they received digital currencies as a payment, a reward, through mining or staking, or as a result of a hard fork.

Additionally, taxpayers must state if they traded, sold, or otherwise disposed of their digital assets, as well as whether they gave them away for free.

If a taxpayer just held a digital asset, moved a digital asset between their own wallets, or bought a digital asset with real money like the US dollar, they can respond “no.” It notes that cryptocurrency purchases done using PayPal and Venmo are exempt from reporting requirements.

Economic Date Outlook

In other economic news, the struggle to manage the skyrocketing global inflation and fears of a global recession is haunting the cryptocurrency market. 

UK Battle Cost-Of-Living

According to figures released by the Office for National Statistics on Wednesday, the consumer price index increased by 10.1% in September, narrowly above the average estimate of analysts surveyed by Reuters.

The cost of living problem that is affecting the nation’s households and companies ahead of a harsh winter caused the rate to increase in the year ending in September 2022. 

Due to a drop in fuel prices, inflation unexpectedly fell to 9.9% in August from 10.1% in July.

According to the ONS, rising food, transportation, and energy prices were the main causes of inflation. Food prices increased by 14.6% year over year, transportation costs increased by 10.9%, and the cost of furnishings and other household items increased by 10.8%.

Following the news, the value of the pound fell versus the dollar, trading at $1.1289 as opposed to $1.1330. 

Australia Slow Jobs Market

The Reserve Bank of Australia’s meeting’s cautious approach was justified by the weaker-than-expected data. The central bank reduced the rate increase by 25 basis points, which was less than anticipated, citing concern over the potential economic harm from raising rates too quickly.

The Australian Bureau of Statistics released the following statistics;

  • The unemployment rate remained at 3.5%
  • The participation rate remained at 66.6%
  • Employment increased to 13,590,800
  • Employment to population ratio decreased to 64.2%
  • The underemployment rate remained at 6.0%
  • Monthly hours worked decreased to 1,853 million.

According to the released data, the jobs market appears to be suffering despite the fact that there are many openings nationwide due to the country’s deteriorating economic situation. For example, wage growth has largely fallen below inflation this year.

The Australian dollar reacted negatively to the data, falling 0.2% to $0.6259. Jitters over rising U.S. Treasury yields also weighed on the currency.

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Author

  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.